81 FR 47006 - Rules of Practice for Hearings

FEDERAL RESERVE SYSTEM

Federal Register Volume 81, Issue 139 (July 20, 2016)

The Board of Governors of the Federal Reserve System (the ``Board'') is issuing an interim final rule amending its rules of practice and procedure to adjust the amount of each civil monetary penalty (``CMP'') provided by law within its jurisdiction to account for inflation as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.

[Federal Register Volume 81, Number 139 (Wednesday, July 20, 2016)]
[Rules and Regulations]
[Pages 47006-47009]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-16969]


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FEDERAL RESERVE SYSTEM

12 CFR Part 263

[Docket No. R-1543]
RIN 7100 AE-55


Rules of Practice for Hearings

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Interim final rule.

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SUMMARY: The Board of Governors of the Federal Reserve System (the 
``Board'') is issuing an interim final rule amending its rules of 
practice and procedure to adjust the amount of each civil monetary 
penalty (``CMP'') provided by law within its jurisdiction to account 
for inflation as required by the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015.

DATES: This interim final rule is effective on August 1, 2016. Comments 
on the interim final rule must be received on or before August 30, 
2016.

ADDRESSES: When submitting comments, please consider submitting your 
comments by email or fax because paper mail in the Washington, DC area 
and at the Board may be subject to delay. You may submit comments, 
identified by Docket No. R-1543 and RIN 7100 AE 55, by any of the 
following methods:
     Agency Web site: www.federalreserve.gov. Follow the 
instructions for submitting comments at www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Federal eRulemaking Portal: www.regulations.gov. Follow 
the instructions for submitting comments.
     Email: [email protected]. Include the 
docket number in the subject line of the message.
     Fax: (202) 452-3819 or (202) 452-3102.
     Mail: Address to Robert deV. Frierson, Secretary, Board of 
Governors of the Federal Reserve System, 20th Street and Constitution 
Avenue NW., Washington, DC 20551.
    All public comments will be made available on the Board's Web site 
at

[[Page 47007]]

www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, 
unless modified for technical reasons. Accordingly, comments will not 
be edited to remove any identifying or contact information. Public 
comments may also be viewed electronically or in paper form in Room 
3515, 1801 K Street NW. (between 18th and 19th Streets), Washington, DC 
20551) between 9:00 a.m. and 5:00 p.m. on weekdays.

FOR FURTHER INFORMATION CONTACT: Katherine H. Wheatley, Associate 
General Counsel (202/452-3779), or Mehrnoush Bigloo, Senior Attorney 
(202/475-6361), Legal Division, Board of Governors of the Federal 
Reserve System, 20th Street and Constitution Ave. NW., Washington, DC 
20551. For users of Telecommunication Device for the Deaf (TDD) only, 
contact 202/263-4869.

SUPPLEMENTARY INFORMATION:

Federal Civil Penalties Inflation Adjustment Act

    The Federal Civil Penalties Inflation Adjustment Act of 1990, 28 
U.S.C. 2461 note (``FCPIA Act''), requires Federal agencies to adjust, 
by regulation, the CMPs within their jurisdiction to account for 
inflation. The Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (the ``2015 Act'' or the ``Act'') \1\ amended 
the FCPIA to require the adjustment to be made annually rather than 
every four years, and to direct federal agencies to make the ``catch-
up'' adjustment--the first inflation adjustment after the date of 
enactment of the 2015 Act--through an interim final rulemaking, to take 
effect no later than August 1, 2016.\2\ The Board is issuing this 
interim final rule to set the new civil monetary penalty levels 
pursuant to the required catch-up adjustment. The Board will apply 
these adjusted maximum penalty levels to any penalties assessed on or 
after August 1, 2016. Penalties assessed prior to August 1, 2016, will 
be subject to the amounts set in the Board's last adjustment pursuant 
to the FCPIA.\3\
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    \1\ Pub. L. 114-74, 129 Stat. 599 (2015) (codified at 28 U.S.C. 
2461 note).
    \2\ 28 U.S.C. 2461 note, section 4(b)(1).
    \3\ 77 FR 68,680 (Nov. 16, 2012).
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    Under the 2015 Act, the initial catch-up adjustment is the 
percentage for each civil monetary penalty by which the Consumer Price 
Index for the month of October 2015 exceeds the Consumer Price Index 
for the month of October of the calendar year during which the amount 
of the penalty was established or adjusted other than pursuant to the 
FCPIA. On February 24, 2016, as directed by the 2015 Act, the Office of 
Management and Budget (OMB) issued guidance to agencies on implementing 
the required catch-up adjustment which included the relevant inflation 
multipliers per calendar year.\4\ Using OMB's multipliers, the Board 
calculated the adjusted penalties for its civil monetary penalties, 
rounding the penalties to the nearest dollar. Under the 2015 Act, the 
amount of any increase may not exceed 150 percent of the amount of the 
penalty on the date of the enactment of the 2015 Act, which is November 
2, 2015.\5\ Accordingly, in a few cases where the calculated penalties 
exceeded the statutory maximum, the Board adjusted the respective 
penalty amount to 250 percent of the prior penalty. The Board also 
determined that none of the increases resulting from application of the 
2015 Act's formula would have a negative economic impact and that any 
social costs of increasing those penalty limits would not outweigh the 
benefits of the increase. For this reason, the Board did not seek an 
exception from the application of the formula as permitted by section 
4(c) of the 2015 Act.
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    \4\ OMB Memorandum M-16-06, Implementation of the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015 (Feb. 
24, 2016).
    \5\ 28 U.S.C. 2461 note, section 4(b)(2)(C).
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Administrative Procedure Act

    Pursuant to the Administrative Procedure Act (the ``APA''), notice 
of proposed rulemaking and opportunity for public comment are not 
required prior to the issuance of a final rule if an agency, for good 
cause, finds that ``notice and public procedure thereon are 
impracticable, unnecessary, or contrary to the public interest.'' \6\ 
As discussed above, the Board calculated the initial catch-up 
adjustment strictly in accordance with the requirements of the 2015 Act 
and OMB's implementing guidance. Moreover, the 2015 Act expressly 
requires the Board to publish the new catch-up penalty levels through 
an interim final rule, meaning that the rule can become effective prior 
to the receipt of public comments.\7\ For these reasons, the Board 
finds good cause to determine that publishing a notice of proposed 
rulemaking and providing opportunity for public comment prior to 
adopting a final rule are unnecessary.\8\ Nevertheless, because the 
Board is required to publish the catch-up penalty levels through an 
interim final rulemaking, the Board is inviting comments on this 
interim final rule. In view of the fact that the Board has calculated 
the catch-up adjustments strictly in accordance with OMB's implementing 
guidance, the Board specifically encourages comments identifying any 
issues with the Board's calculations under that guidance. The Board 
also invites comments regarding its determination that the bases for an 
exception under section 4(c) of the 2015 Act were not met.
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    \6\ 5 U.S.C. 553(b)(3)(B).
    \7\ 28 U.S.C. 2461 note, section 4(b)(1).
    \8\ 5 U.S.C. 553(b).
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Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601 et seq., requires a 
regulatory flexibility analysis only for rules for which an agency is 
required to publish a general notice of proposed rulemaking. Because 
the 2015 Act requires agencies' catch-up adjustments to be made through 
an interim final rule, the Board is not publishing a notice of proposed 
rulemaking. Therefore, the Regulatory Flexibility Act does not apply.

Paperwork Reduction Act

    There is no collection of information required by this interim 
final rule that would be subject to the Paperwork Reduction Act of 
1995, 44 U.S.C. 3501 et seq.

List of Subjects in 12 CFR Part 263

    Administrative practice and procedure, Claims, Crime, Equal access 
to justice, Lawyers, Penalties.

Authority and Issuance

    For the reasons set forth in the preamble, the Board of Governors 
amends 12 CFR part 263 as follows:

PART 263--RULES OF PRACTICE FOR HEARINGS

0
1. The authority citation for part 263 is revised to read as follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 248, 324, 334, 347a, 
504, 505, 1464, 1467, 1467a, 1817(j), 1818, 1820(k), 1829, 1831o, 
1831p-1, 1832(c), 1847(b), 1847(d), 1884, 1972(2)(F), 3105, 3108, 
3110, 3349, 3907, 3909(d), 4717; 15 U.S.C. 21, 78l(i), 78o-4, 78o-5, 
78u-2; 1639e(k); 28 U.S.C. 2461 note; 31 U.S.C. 5321; and 42 U.S.C. 
4012a.


0
2. Section 263.65 is revised to read as follows:


Sec.  263.65  Civil monetary penalty inflation adjustments.

    (a) Inflation adjustments. In accordance with the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015, which 
further amended the Federal Civil Penalties Inflation Adjustment Act of 
1990, the Board has set forth in paragraph (b) of this section the 
adjusted maximum amounts for each civil monetary penalty provided by 
law

[[Page 47008]]

within the Board's jurisdiction. The authorizing statutes contain the 
complete provisions under which the Board may seek a civil monetary 
penalty. The adjusted civil monetary penalties apply only to penalties 
assessed on or after August 1, 2016.
    (b) Maximum civil monetary penalties. The maximum civil monetary 
penalties as set forth in the referenced statutory sections are set 
forth in the table in this paragraph (b).

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                                                          Adjusted civil
                         Statute                             monetary
                                                              penalty
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12 U.S.C. 324:
    Inadvertently late or misleading reports, inter alia          $3,787
    Other late or misleading reports, inter alia........          37,872
    Knowingly or reckless false or misleading reports,         1,893,610
     inter alia.........................................
12 U.S.C. 334...........................................             275
12 U.S.C. 374a..........................................             275
12 U.S.C. 504:
    First Tier..........................................           9,468
    Second Tier.........................................          47,340
    Third Tier..........................................       1,893,610
12 U.S.C. 505:
    First Tier..........................................           9,468
    Second Tier.........................................          47,340
    Third Tier..........................................       1,893,610
12 U.S.C. 1464(v)(4)....................................           3,787
12 U.S.C. 1464(v)(5)....................................          37,872
12 U.S.C. 1464(v)(6)....................................       1,893,610
12 U.S.C. 1467a(i)(2)...................................          47,340
12 U.S.C. 1467a(i)(3)...................................          47,340
12 U.S.C. 1467a(r):
    First Tier..........................................           3,787
    Second Tier.........................................          37,872
    Third Tier..........................................       1,893,610
12 U.S.C. 1817(j)(16):
    First Tier..........................................           9,468
    Second Tier.........................................          47,340
    Third Tier..........................................       1,893,610
12 U.S.C. 1818(i)(2):
    First Tier..........................................           9,468
    Second Tier.........................................          47,340
    Third Tier..........................................       1,893,610
12 U.S.C. 1820(k)(6)(A)(ii).............................         311,470
12 U.S.C. 1832(c).......................................           2,750
12 U.S.C. 1847(b).......................................          47,340
12 U.S.C. 1847(d):
    First Tier..........................................           3,787
    Second Tier.........................................          37,872
    Third Tier..........................................       1,893,610
12 U.S.C. 1884..........................................             275
12 U.S.C. 1972(2)(F):
    First Tier..........................................           9,468
    Second Tier.........................................          47,340
    Third Tier..........................................       1,893,610
12 U.S.C. 3909(d).......................................            2355
12 U.S.C. 3110(a).......................................          43,275
12 U.S.C. 3110(c):
    First Tier..........................................           3,462
    Second Tier.........................................          34,620
    Third Tier..........................................       1,730,990
15 U.S.C. 78u-2(b)(1):
    For a natural person................................           8,908
    For any other person................................          89,078
15 U.S.C. 78u-2(b)(2):
    For a natural person................................          89,078
    For any other person................................         445,390
15 U.S.C. 78u-2(b)(3):
    For a natural person................................         178,156
    For any other person................................         890,780
15 U.S.C. 1639e(k)(1)...................................          10,875
15 U.S.C. 1639e(k)(2)...................................          21,749
42 U.S.C. 4012a(f)(5)...................................            2056
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[[Page 47009]]

    By order of the Board of Governors of the Federal Reserve 
System, July 13, 2016.
Robert deV. Frierson,
Secretary of the Board.
    Billing Code: 6210-01-P
[FR Doc. 2016-16969 Filed 7-19-16; 8:45 am]
BILLING CODE 6210-01-P