82 FR 8360 - Rules of Practice for Hearings

FEDERAL RESERVE SYSTEM

Federal Register Volume 82, Issue 15 (January 25, 2017)

The Board of Governors of the Federal Reserve System (the ``Board'') is issuing a final rule amending its rules of practice and procedure to adjust the amount of each civil money 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 82, Number 15 (Wednesday, January 25, 2017)]
[Rules and Regulations]
[Pages 8360-8362]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-00595]


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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: Final rule.

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SUMMARY: The Board of Governors of the Federal Reserve System (the 
``Board'') is issuing a final rule amending its rules of practice and 
procedure to adjust the amount of each civil money 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 final rule is effective January 25, 2017.

FOR FURTHER INFORMATION CONTACT: Patrick M. Bryan, Assistant General 
Counsel (202-974-7093), or Thomas O. Kelly, Senior Attorney (202-974-
7059), 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'')\1\ amended the FCPIA Act to 
require federal agencies to make a ``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, and to make adjustments not later than January 15 of 
every year thereafter.\2\ On July 20, 2016, the Board issued an interim 
final rule setting the CMP levels pursuant to the required catch-up 
adjustment. The Board is now issuing a new final rule to set the CMP 
levels pursuant to the required annual adjustment for 2017. The Board 
will apply these adjusted maximum penalty levels to any penalties 
assessed on or after January 15, 2017, whose associated violations 
occurred on or after November 2, 2015. Penalties assessed for 
violations occurring prior to November 2, 2015 will be subject to the 
amounts set in the Board's 2012 adjustment pursuant to the FCPIA 
Act.\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 68680 (Nov. 16, 2012).
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    Under the 2015 Act, the annual adjustment to be made for 2017 is 
the percentage by which the Consumer Price Index for the month of 
October 2016 exceeds the Consumer Price Index for the month of October 
2015. On December 16, 2016, as directed by the 2015 Act, the Office of 
Management and Budget (OMB) issued guidance to affected agencies on 
implementing the required annual adjustment which included the relevant 
inflation multiplier.\4\ Using OMB's multiplier, the Board calculated 
the adjusted penalties for its CMPs, rounding the penalties to the 
nearest dollar.\5\
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    \4\ OMB Memorandum M-17-11, Implementation of the 2017 Annual 
Adjustment Pursuant to the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015 (Dec. 16, 2016).
    \5\ Under the 2015 Act and implementing OMB guidance, agencies 
are not required to make an adjustment to a CMP if, during the 12 
months preceding the required adjustment, such penalty increased due 
to a law other than the 2015 Act by an amount greater than the 
amount of the required adjustment. No other laws have adjusted the 
CMPs within the Board's jurisdiction during the preceding 12 months.
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Comment Received in Response to the July 20, 2016 Interim Final Rule

    The Board received one comment letter on behalf of International 
Bancshares Corporation (``IBC'') in response to the July 20, 2016 
interim final rule. IBC expressed disappointment that the Board 
published the new penalty levels through an interim final rule without 
engaging in prior notice and comment proceedings. As IBC itself 
acknowledged, however, the 2015 Act required the Board to adjust the 
penalties for the catch-up adjustment through an interim final 
rulemaking to take effect no later than August 1, 2016. IBC also 
expressed concern with many of the new maximum penalty amounts, urging 
the Board to exercise its discretion to ``withhold using its maximum 
penalty authority.'' Again, as IBC acknowledged, the Board calculated 
the new penalty amounts strictly in accordance with the 2015 Act and 
OMB's implementing guidance. Moreover, setting the new upper limits on 
penalties does not require the Board in any particular case to assess 
the maximum amounts.

Administrative Procedure Act

    The 2015 Act states that agencies shall make the annual adjustment

[[Page 8361]]

``notwithstanding section 553 of title 5, United States Code.'' 
Therefore, this rule is not subject to the provisions of the 
Administrative Procedure Act (the ``APA''), 5 U.S.C. 553, requiring 
notice, public participation, and deferred effective date.

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 states that agencies' annual adjustments are to be made 
notwithstanding section 553 of title 5 of United States Code--the APA 
section requiring notice of proposed rulemaking--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 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 amends 12 CFR 
part 263 to read as follows:

PART 263--RULES OF PRACTICE FOR HEARINGS

0
1. The authority citation for part 263 continues 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 money 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 money penalty provided by law 
within the Board's jurisdiction. The authorizing statutes contain the 
complete provisions under which the Board may seek a civil money 
penalty. The adjusted civil money penalties apply only to penalties 
assessed on or after January 15, 2017, whose associated violations 
occurred on or after November 2, 2015.
    (b) Maximum civil money penalties. The maximum (or, in the cases of 
12 U.S.C. 334 and 1832(c), fixed) civil money 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                           money penalty
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12 U.S.C. 324:
    Inadvertently late or misleading reports, inter               $3,849
     alia............................................
    Other late or misleading reports, inter alia.....             38,492
    Knowingly or reckless false or misleading                  1,924,589
     reports, inter alia.............................
12 U.S.C. 334........................................                279
12 U.S.C. 374a.......................................                279
12 U.S.C. 504:
    First Tier.......................................              9,623
    Second Tier......................................             48,114
    Third Tier.......................................          1,924,589
12 U.S.C. 505:
    First Tier.......................................              9,623
    Second Tier......................................             48,114
    Third Tier.......................................          1,924,589
12 U.S.C. 1464(v)(4).................................              3,849
12 U.S.C. 1464(v)(5).................................             38,492
12 U.S.C. 1464(v)(6).................................          1,924,589
12 U.S.C. 1467a(i)(2)................................             48,114
12 U.S.C. 1467a(i)(3)................................             48,114
12 U.S.C. 1467a(r):
    First Tier.......................................              3,849
    Second Tier......................................             38,492
    Third Tier.......................................          1,924,589
12 U.S.C. 1817(j)(16):
    First Tier.......................................              9,623
    Second Tier......................................             48,114
    Third Tier.......................................          1,924,589
12 U.S.C. 1818(i)(2):
    First Tier.......................................              9,623
    Second Tier......................................             48,114
    Third Tier.......................................          1,924,589
12 U.S.C. 1820(k)(6)(A)(ii)..........................            316,566
12 U.S.C. 1832(c)....................................              2,795
12 U.S.C. 1847(b)....................................             48,114
12 U.S.C. 1847(d):
    First Tier.......................................              3,849
    Second Tier......................................             38,492
    Third Tier.......................................          1,924,589
12 U.S.C. 1884.......................................                279
12 U.S.C. 1972(2)(F):
    First Tier.......................................              9,623
    Second Tier......................................             48,114

[[Page 8362]]

 
    Third Tier.......................................          1,924,589
12 U.S.C. 3110(a)....................................             43,983
12 U.S.C. 3110(c):
    First Tier.......................................              3,519
    Second Tier......................................             35,186
    Third Tier.......................................          1,759,309
12 U.S.C. 3909(d)....................................              2,394
15 U.S.C. 78u-2(b)(1):
    For a natural person.............................              9,054
    For any other person.............................             90,535
15 U.S.C. 78u-2(b)(2):
    For a natural person.............................             90,535
    For any other person.............................            452,677
15 U.S.C. 78u-2(b)(3):
    For a natural person.............................            181,071
    For any other person.............................            905,353
15 U.S.C. 1639e(k)(1)................................             11,053
15 U.S.C. 1639e(k)(2)................................             22,105
42 U.S.C. 4012a(f)(5)................................              2,090
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    By order of the Board of Governors of the Federal Reserve 
System, January 9, 2017.
Robert deV. Frierson,
Secretary of the Board.
[FR Doc. 2017-00595 Filed 1-19-17; 4:15 pm]
 BILLING CODE 6210-01-P