81 FR 30483 - Rules of Practice and Procedure; Adjusting Civil Money Penalties for Inflation

FARM CREDIT SYSTEM INSURANCE CORPORATION

Federal Register Volume 81, Issue 95 (May 17, 2016)

This rule implements inflation adjustments to civil money penalties (CMPs) that the Farm Credit System Insurance Corporation (FCSIC) may impose under the Farm Credit Act of 1971, as amended. These adjustments are required by 2015 amendments to the Federal Civil Penalties Inflation Adjustment Act of 1990.

[Federal Register Volume 81, Number 95 (Tuesday, May 17, 2016)]
[Rules and Regulations]
[Pages 30483-30484]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-11675]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
week.

========================================================================


Federal Register / Vol. 81, No. 95 / Tuesday, May 17, 2016 / Rules 
and Regulations

[[Page 30483]]



FARM CREDIT SYSTEM INSURANCE CORPORATION

12 CFR Part 1411

RIN 3055-AA11


Rules of Practice and Procedure; Adjusting Civil Money Penalties 
for Inflation

AGENCY: Farm Credit System Insurance Corporation.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This rule implements inflation adjustments to civil money 
penalties (CMPs) that the Farm Credit System Insurance Corporation 
(FCSIC) may impose under the Farm Credit Act of 1971, as amended. These 
adjustments are required by 2015 amendments to the Federal Civil 
Penalties Inflation Adjustment Act of 1990.

DATES: This rule is effective on August 1, 2016.

FOR FURTHER INFORMATION CONTACT: Howard Rubin, General Counsel, Farm 
Credit System Insurance Corporation, 1501 Farm Credit Drive, McLean, 
Virginia 22102, (703) 883-4380, TTY (703) 883-4390.

SUPPLEMENTARY INFORMATION:

A. Background

    The Federal Civil Penalties Inflation Adjustment Act Improvements 
Act of 2015 (the 2015 Act) amended the Federal Civil Penalties 
Inflation Adjustment Act of 1990 (the Inflation Adjustment Act) \1\ to 
improve the effectiveness of civil monetary penalties and to maintain 
their deterrent effect. The Inflation Adjustment Act provides for the 
regular evaluation of CMPs and requires FCSIC, and every other Federal 
agency with authority to impose CMPs, to ensure that CMPs continue to 
maintain their deterrent values.\2\
---------------------------------------------------------------------------

    \1\ Public Law 101-410, Oct. 5, 1990, 104 Stat. 890, as amended 
by Public Law 104-134, title III, sec. 31001(s)(1), Apr. 26, 1996, 
110 Stat. 1321-373; Public Law 105-362, title XIII, sec. 1301(a), 
Nov. 10, 1998, 112 Stat. 3293; Public Law 114-74, title VII, sec. 
701(b), Nov. 2, 2015, 129 Stat. 599.
    \2\ Under the amended Inflation Adjustment Act, a CMP is defined 
as any penalty, fine, or other sanction that: (1) Either is for a 
specific monetary amount as provided by Federal law or has a maximum 
amount provided for by Federal law; (2) is assessed or enforced by 
an agency pursuant to Federal law; and (3) is assessed or enforced 
pursuant to an administrative proceeding or a civil action in the 
Federal courts. All three requirements must be met for a fine to be 
considered a CMP.
---------------------------------------------------------------------------

    FCSIC must enact regulations that adjust its CMPs pursuant to the 
inflation adjustment formula of the amended Inflation Adjustment Act 
and rounded using a method prescribed by the Inflation Adjustment Act. 
The new amounts will apply to penalties assessed on or after the 
effective date of this rule. Agencies do not have discretion in 
choosing whether to adjust a CMP, by how much to adjust a CMP, or the 
methods used to determine the adjustment.

B. CMPs Imposed Pursuant to Section 5.65 of the Farm Credit Act

    First, section 5.65(c) of the Farm Credit Act, as amended (Act), 
provides that any insured Farm Credit System bank that willfully fails 
or refuses to file any certified statement or pay any required premium 
shall be subject to a penalty of not more than $100 for each day that 
such violations continue, which penalty FCSIC may recover for its 
use.\3\ Second, section 5.65(d) of the Act provides that, except with 
the prior written consent of the Farm Credit Administration, it shall 
be unlawful for any person convicted of any criminal offense involving 
dishonesty or a breach of trust to serve as a director, officer, or 
employee of any System institution.\4\ For each willful violation of 
section 5.65(d), the institution involved shall be subject to a penalty 
of not more than $100 for each day during which the violation 
continues, which FCSIC may recover for its use.
---------------------------------------------------------------------------

    \3\ 12 U.S.C. 2277a-14(c).
    \4\ 12 U.S.C. 2277a-14(d).
---------------------------------------------------------------------------

    FCSIC's current Sec.  1411.1, promulgated in 2001 pursuant to the 
Inflation Adjustment Act as then in effect, provides that FCSIC can 
impose a maximum penalty of $117 per day for a violation under section 
5.65(c) and (d) of the Act. FCSIC has not been required to make 
adjustments under the Inflation Adjustment Act since 2001.\5\
---------------------------------------------------------------------------

    \5\ FCSIC's most recent notice assessing the need for cost-of-
living adjustments to CMPs was published on October 24, 2013 (78 FR 
63465).
---------------------------------------------------------------------------

C. Required Adjustments

    The 2015 Act requires agencies to (1) adjust the level of civil 
monetary penalties with an initial ``catch-up'' adjustment through an 
interim final rulemaking (IFR) and (2) make subsequent annual 
adjustments for inflation. Catch-up adjustments are based on the 
percent change between the Consumer Price Index for all Urban Consumers 
(CPI-U) for the month of October of the year in which the CMP was 
established or adjusted (other than through Inflation Adjustment Act 
adjustments), and the October 2015 CPI-U. Annual inflation adjustments 
will be based on the percent change between the October CPI-U preceding 
the date of the adjustment and the prior year's October CPI-U. CMPs 
provided for in section 5.65 of the Act were enacted in 1988 and not 
subsequently changed (other than through Inflation Adjustment Act 
adjustments). In accordance with guidance issued by the Office of 
Management and Budget (pursuant to a directive in the 2015 Act), FCSIC 
must multiply the maximum amount of civil money penalty provided for in 
section 5.65(c) and (d) of the Farm Credit Act ($100) by 1.97869.\6\ 
This results in a revised penalty amount of $198, after rounding to the 
nearest dollar as required by the 2015 Act.
---------------------------------------------------------------------------

    \6\ OMB Memorandum M-16-06 (Feb. 24, 2015).
---------------------------------------------------------------------------

D. Notice and Comment Not Required by Administrative Procedure Act

    The 2015 Act specifically directs Federal agencies to ``adjust 
civil money penalties through an interim final rulemaking'' and the 
Inflation Adjustment Act gives agencies no discretion in the 
calculation of the adjustment. Therefore, FCSIC concludes that public 
notice and an opportunity to comment are not necessary or appropriate 
under the Administrative Procedure Act and adopts this rule in final 
form.

E. Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act,\7\ 
FCSIC hereby certifies that this final rule will

[[Page 30484]]

not have a significant economic impact on a substantial number of small 
entities. Each of the banks of the Farm Credit System, together with 
their affiliated associations, has assets and annual income in excess 
of amounts that would qualify them as ``small entities'' under the 
Regulatory Flexibility Act.
---------------------------------------------------------------------------

    \7\ 5 U.S.C. 601, et seq.
---------------------------------------------------------------------------

List of Subjects in 12 CFR Part 1411

    Banks, Banking, Civil money penalties, Penalties.

    For the reasons stated in the preamble, part 1411 of chapter XIV, 
title 12 of the Code of Federal Regulations is amended as follows:

PART 1411--RULES OF PRACTICE AND PROCEDURE

0
1. The authority citation for part 1411 continues to read as follows:

    Authority:  Secs. 5.58(10), 5.65(c) and (d) of the Farm Credit 
Act (12 U.S.C. 2277a-7(10), 2277a-14(c) and (d)); 28 U.S.C. 2461 
note.


0
2. Revise Sec.  1411.1 to read as follows:


Sec.  1411.1  Inflation adjustment of civil money penalties for failure 
to file a certified statement, pay any premium required or obtain 
approval before employment of persons convicted of criminal offenses.

    In accordance with the Federal Civil Penalties Inflation Adjustment 
Act of 1990, as amended, a civil money penalty imposed pursuant to 
section 5.65(c) or (d) of the Farm Credit Act of 1971, as amended, for 
a violation occurring on or after August 1, 2016 shall not exceed $198 
per day for each day the violation continues.

    Dated: May 12, 2016.
Dale L. Aultman,
Secretary to the Board, Farm Credit System Insurance Corporation.
[FR Doc. 2016-11675 Filed 5-16-16; 8:45 am]
 BILLING CODE 6710-01-P