83 FR 1293 - Rules of Practice and Procedure; Adjusting Civil Money Penalties for Inflation

FARM CREDIT ADMINISTRATION

Federal Register Volume 83, Issue 8 (January 11, 2018)

Page Range		1293-1295
FR Document		2018-00336
This regulation implements inflation adjustments to civil money penalties (CMPs) that the Farm Credit Administration (FCA) may impose or enforce pursuant to the Farm Credit Act of 1971, as amended (Farm Credit Act), and pursuant to the Flood Disaster Protection Act of 1973, as amended by the National Flood Insurance Reform Act of 1994 (Reform Act), and further amended by the Biggert-Waters Flood Insurance Reform Act of 2012 (Biggert-Waters Act).
Federal Register, Volume 83 Issue 8 (Thursday, January 11, 2018)
[Federal Register Volume 83, Number 8 (Thursday, January 11, 2018)]
[Rules and Regulations]
[Pages 1293-1295]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-00336]


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FARM CREDIT ADMINISTRATION

12 CFR Part 622

RIN 3052-AD29


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

AGENCY: Farm Credit Administration.

ACTION: Final rule.

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SUMMARY: This regulation implements inflation adjustments to civil 
money penalties (CMPs) that the Farm Credit Administration (FCA) may 
impose or enforce pursuant to the Farm Credit Act of 1971, as amended 
(Farm Credit Act), and pursuant to the Flood Disaster Protection Act of 
1973, as amended by the National Flood Insurance Reform Act of 1994 
(Reform Act), and further amended by the Biggert-Waters Flood Insurance 
Reform Act of 2012 (Biggert-Waters Act).

DATES: Effective date: This regulation is effective on January 15, 
2018.

FOR FURTHER INFORMATION CONTACT: Michael T. Wilson, Policy Analyst, 
Office of Regulatory Policy, (703) 883-4124, TTY (703) 883-4056, 
[email protected], or Autumn R. Agans, Attorney-Advisor, Office of 
General Counsel, (703) 883-4082, TTY (703) 883-4056, [email protected].

SUPPLEMENTARY INFORMATION:

I. Objective

    The objective of this regulation is to adjust the maximum CMPs for 
inflation through a final rulemaking to retain the deterrent effect of 
such penalties.

II. Background

A. Introduction

    The Federal Civil Penalties Inflation Adjustment Act of 1990, as 
amended by the Debt Collection Improvement Act of 1996 (1996 Act) and 
the Federal Civil Penalties Inflation Adjustment Act Improvements Act 
of 2015 (2015 Act) (collectively, 1990 Act, as amended), requires all 
Federal agencies with the authority to enforce CMPs to evaluate and 
adjust, if necessary, those CMPs each year to ensure that they continue 
to maintain their deterrent value and promote compliance with the law. 
Section 3(2) of the 1990 Act, as amended, defines a civil monetary 
penalty \1\ 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.\2\
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    \1\ Note: While the 1990 Act, as amended by 1996 and 2015 Acts, 
uses the term ``civil monetary penalties'' for these penalties or 
other sanctions, the Farm Credit Act and the FCA Regulations use the 
term ``civil money penalties.'' Both terms have the same meaning. 
Accordingly, this rule uses the term civil money penalty, and both 
terms may be used interchangeably.
    \2\ See 28 U.S.C. 2461 note.
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    The FCA imposes and enforces CMPs through the Farm Credit Act \3\ 
and the Flood Disaster Protection Act of 1973, as amended. FCA's 
regulations governing CMPs are found in 12 CFR parts 622 and 623. Part 
622 establishes rules of practice and procedure applicable to formal 
and informal hearings held before the FCA, and to formal investigations 
conducted under the Farm Credit Act. Part 623 prescribes rules 
regarding persons who may practice before the FCA and the circumstances 
under which such persons may be suspended or debarred from practice 
before the FCA.
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    \3\ Public Law 92-181, as amended.
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B. CMPs Issued Under the Farm Credit Act

    The Farm Credit Act provides that any Farm Credit System (System) 
institution or any officer, director, employee, agent, or other person 
participating in the conduct of the affairs of a System institution who 
violates the terms of a cease-and-desist order that has become final 
pursuant to section 5.25 or 5.26 of the Farm Credit Act must pay up to 
a maximum daily amount of $1,000 \4\ during which such violation 
continues. This CMP maximum was set by the Farm Credit Amendments Act 
of 1985, which amended the Farm Credit Act. Orders

[[Page 1294]]

issued by the FCA under section 5.25 or 5.26 of the Farm Credit Act 
include temporary and permanent cease-and-desist orders. In addition, 
section 5.32(h) of the Farm Credit Act provides that any directive 
issued under sections 4.3(b)(2), 4.3A(e), or 4.14A(i) of the Farm 
Credit Act ``shall be treated'' as a final order issued under section 
5.25 of the Farm Credit Act for purposes of assessing a CMP.
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    \4\ The inflation-adjusted CMP in effect on January 15, 2017, 
for a violation of a final order is $2,224 per day, as set forth in 
Sec.  622.61(a)(1) of FCA regulations.
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    Section 5.32(a) of the Farm Credit Act also states that ``[a]ny 
such institution or person who violates any provision of the [Farm 
Credit] Act or any regulation issued under this Act shall forfeit and 
pay a civil penalty of not more than $500 \5\ per day for each day 
during which such violation continues.'' This CMP maximum was set by 
the Agricultural Credit Act of 1987, which was enacted in 1988, and 
amends the Farm Credit Act. Current, inflation-adjusted CMP maximums 
are set forth in existing Sec.  622.61 of FCA regulations.\6\
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    \5\ The inflation-adjusted CMP in effect on January 15, 2017, 
for a violation of the Farm Credit Act or a regulation issued under 
the Farm Credit Act is $1,005 per day, as set forth in Sec.  
622.61(a)(2) of FCA regulations.
    \6\ Prior adjustments were made under the 1990 Act.
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    The FCA also enforces the Flood Disaster Protection Act of 1973,\7\ 
as amended by the National Flood Insurance Reform Act of 1994,\8\ which 
requires FCA to assess CMPs for a pattern or practice of committing 
certain specific actions in violation of the National Flood Insurance 
Program. The existing maximum CMP for a violation under the Flood 
Disaster Protection Act of 1973 is $2,000.^{9 10}
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    \7\ 42 U.S.C. 4012a.
    \8\ Public Law 103-325, title V, 108 Stat. 2160, 2255-87 
(September 23, 1994).
    \9\ Public Law 112-141, 126 Stat. 405 (July 6, 2012).
    \10\ The inflation-adjusted CMP in effect on January 15, 2017, 
for a flood insurance violation is $2,090, as set forth in Sec.  
622.61(b) of FCA regulations.
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C. Federal Civil Penalties Inflation Adjustment Act Improvements Act of 
2015

1. In General
    The 2015 Act required all Federal agencies to adjust the CMPs 
yearly, starting January 15, 2017.
    Under Section 4(b) of the 1990 Act, as amended, annual adjustments 
are to be made yearly no later than January 15 of each year.\11\ 
Section 6 of the 1990 Act, as amended, states that any increase to a 
civil monetary penalty under this 1990 Act applies only to civil 
monetary penalties, including those whose associated violation predated 
such increase, which are assessed after the date the increase takes 
effect.
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    \11\ Public Law 114-74, sec. 701(b)(1).
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    Section 5(b) of the 1990 Act, as amended, defines the term ``cost-
of-living adjustment'' as the percentage (if any) for each civil 
monetary penalty by which (1) the Consumer Price Index (CPI) for the 
month of October of the calendar year preceding the adjustment, exceeds 
(2) the CPI for the month of October 1 year before the month of October 
referred to in (1) of the calendar year in which the amount of such 
civil monetary penalty was last set or adjusted pursuant to law.\12\
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    \12\ The CPI is published by the Department of Labor, Bureau of 
Statistics, and is available at its website: ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt.
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    The increase for each CMP adjusted for inflation must be rounded 
using a method prescribed by section 5(a) of the 1990 Act, as amended, 
by the 2015 Act.\13\
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    \13\ Pursuant to section 5(a)(3) of the 2015 Act, any increase 
determined under the subsection shall be rounded to the nearest $1.
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2. Other Adjustments
    If a civil monetary penalty is subject to a cost-of-living 
adjustment under the 1990 Act, as amended, but is adjusted to an amount 
greater than the amount of the adjustment required under the Act within 
the 12 months preceding a required cost-of-living adjustment, the 
agency is not required to make the cost-of-living adjustment to that 
CMP in that calendar year.\14\
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    \14\ Pursuant to section 4(d) of the 1990 Act, as amended.
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III. Yearly Adjustments

A. Mathematical Calculations of 2018 Adjustments

    The adjustment requirement affects two provisions of section 
5.32(a) of the Farm Credit Act. For the 2018 yearly adjustments to the 
CMPs set forth by the Farm Credit Act, the calculation required by the 
2017 White House Office of Management and Budget (OMB) guidance \15\ is 
based on the percentage by which the CPI for October 2017 exceeds the 
CPIs for October 2016. The OMB set forth guidance, as required by the 
2015 Act,\16\ with a multiplier for calculating the new CMP values.\17\ 
The OMB multiplier for the 2018 CMPs is 1.02041.
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    \15\ OMB Circular M-18-03, Implementation of Penalty Inflation 
Adjustments for 2018, Pursuant to the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015.
    \16\ 28 U.S.C. 2461 note, section 7(a).
    \17\ OMB Circular M-18-03, Implementation of Penalty Inflation 
Adjustments for 2018, Pursuant to the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015.
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    The adjustment also affects the CMPs set by the Flood Disaster 
Protection Act of 1973, as amended. The adjustment multiplier is the 
same for all FCA enforced CMPs, set at 1.02041. The maximum CMPs for 
violations were created in 2012 by the Biggert-Waters Act, which 
amended the Flood Disaster Protection Act of 1973.
1. New Penalty Amount in Sec.  622.61(a)(1)
    The inflation-adjusted CMP currently in effect for violations of a 
final order occurring on or after January 15, 2017, is a maximum daily 
amount of $2,224.\18\ Multiplying the $2,224 CMP by the 2017 OMB 
multiplier, 1.02041, yields a total of $2,269.39. When that number is 
rounded as required by section 5(a) of the 1990 Act, as amended, the 
inflation-adjusted maximum increases to $2,269. Thus, the new CMP 
maximum is $2,269.
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    \18\ 12 CFR 622.61(a)(1).
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2. New Penalty Amount in Sec.  622.61(a)(2)
    The inflation-adjusted CMP currently in effect for violations of 
the Farm Credit Act or regulations issued under the Farm Credit Act 
occurring on or after January 15, 2017, is a maximum daily amount of 
$1,005.\19\ Multiplying the $1,005 CMP maximum by the 2017 OMB 
multiplier, 1.02041, yields a total of $1,025.51. When that number is 
rounded as required by section 5(a) of the 1990 Act, as amended the 
inflation-adjusted maximum increases to $1,026. Thus, the new CMP 
maximum is $1,026.
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    \19\ 12 CFR 622.61(a)(2).
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3. New Penalty Amounts for Flood Insurance Violations Under Sec.  
622.61(b)
    The existing maximum CMP for a pattern or practice of flood 
insurance violations pursuant to 42 U.S.C. 4012a(f)(5) is $2,090. 
Multiplying $2,090 by the 2017 OMB multiplier, 1.02041, yields a total 
of $2,132.65. When that number is rounded as required by section 5(a) 
of the 1990 Act, as amended, the new maximum assessment of the CMP for 
violating 42 U.S.C. 4012a(f)(5) is $2,133. Thus, the new CMP maximum is 
$2,133.

IV. Notice and Comment Not Required by Administrative Procedure Act

    The 1990 Act, as amended, gives Federal agencies no discretion in 
the adjustment of CMPs for the rate of inflation. Further, these 
revisions are ministerial, technical, and noncontroversial. For these 
reasons, the FCA finds good cause to determine that public notice and 
an opportunity to comment are impracticable, unnecessary, and contrary 
to the public interest pursuant to the Administrative Procedure Act, 5 
U.S.C. 553(b)(B), and adopts this rule in final form.

[[Page 1295]]

V. Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act (5 
U.S.C. 601 et seq.), the FCA hereby certifies that this final rule will 
not have a significant economic impact on a substantial number of small 
entities. Each of the banks in the System, considered together with its 
affiliated associations, has assets and annual income in excess of the 
amounts that would qualify them as small entities. Therefore, System 
institutions are not ``small entities'' as defined in the Regulatory 
Flexibility Act.

List of Subjects in 12 CFR Part 622

    Administrative practice and procedure, Crime, Investigations, 
Penalties.

    For the reasons stated in the preamble, part 622 of chapter VI, 
title 12 of the Code of Federal Regulations is amended as follows:

PART 622--RULES OF PRACTICE AND PROCEDURE

0
1. The authority citation for part 622 continues to read as follows:

    Authority: Secs. 5.9, 5.10, 5.17, 5.25-5.37 of the Farm Credit 
Act (12 U.S.C. 2243, 2244, 2252, 2261-2273); 28 U.S.C. 2461 note; 
and 42 U.S.C. 4012a(f).


0
2. Revise Sec.  622.61 to read as follows:


Sec.  622.61  Adjustment of civil money penalties by the rate of 
inflation under the Federal Civil Penalties Inflation Adjustment Act of 
1990, as amended.

    (a) The maximum amount of each civil money penalty within FCA's 
jurisdiction is adjusted in accordance with the Federal Civil Penalties 
Inflation Adjustment Act of 1990, as amended (28 U.S.C. 2461 note), as 
follows:
    (1) Amount of civil money penalty imposed under section 5.32 of the 
Act for violation of a final order issued under section 5.25 or 5.26 of 
the Act: The maximum daily amount is $2,269 for violations that occur 
on or after January 15, 2018.
    (2) Amount of civil money penalty for violation of the Act or 
regulations: The maximum daily amount is $1,026 for each violation that 
occurs on or after January 15, 2018.
    (b) The maximum civil money penalty amount assessed under 42 U.S.C. 
4012a(f) is: $385 for each violation that occurs on or after January 
16, 2009, but before July 1, 2013, with total penalties under such 
statute not to exceed $120,000 for any single institution during any 
calendar year; $2,000 for each violation that occurs on or after July 
1, 2013, but before August 1, 2016, with no cap on the total amount of 
penalties that can be assessed against any single institution during 
any calendar year; and $2,133 for each violation that occurs on or 
after January 15, 2018, with no cap on the total amount of penalties 
that can be assessed against any single institution during any calendar 
year.

    Dated: January 8, 2018.
Dale L. Aultman,
Secretary, Farm Credit Administration Board.
[FR Doc. 2018-00336 Filed 1-10-18; 8:45 am]
BILLING CODE 6705-01-P
Federal Register / Vol. 83, No. 8 / Thursday, January 11, 2018 / Rules and Regulations 1293

and suppliers) that are indemnified by Authority: The Constitution of the United 1996 (1996 Act) and the Federal Civil
the Price-Anderson Act, 42 U.S.C. States, Article I, Section 9; 5 U.S.C. 7342; 22 Penalties Inflation Adjustment Act
2210(d). See 10 CFR 851.5(a). U.S.C. 2694; 42 U.S.C. 7254 and 7262; 28 Improvements Act of 2015 (2015 Act)
U.S.C. 2461 note. (collectively, 1990 Act, as amended),
* * * * *
■ 29. Section 1050.303 is amended by requires all Federal agencies with the
PART 1013—PROGRAM FRAUD CIVIL revising the last sentence in paragraph authority to enforce CMPs to evaluate
REMEDIES AND PROCEDURES (d) to read as follows: and adjust, if necessary, those CMPs
each year to ensure that they continue
■ 24. The authority citation for part § 1050.303 Enforcement. to maintain their deterrent value and
1013 continues to read as follows: * * * * * promote compliance with the law.
Authority: 31 U.S.C. 3801–3812; 28 U.S.C. (d) * * * The court in which such Section 3(2) of the 1990 Act, as
2461 note. action is brought may assess a civil amended, defines a civil monetary
penalty against such employee in any penalty 1 as any penalty, fine, or other
■ 25. Section 1013.3 is amended by
amount not to exceed the retail value of sanction that: (1) Either is for a specific
revising paragraphs (a)(1)(iv) and
the gift improperly solicited or received monetary amount as provided by
(b)(1)(ii) to read as follows:
plus $20,021. Federal law or has a maximum amount
§ 1013.3 Basis for civil penalties and [FR Doc. 2018–00206 Filed 1–10–18; 8:45 am] provided for by Federal law; (2) is
assessments. BILLING CODE 6450–01–P assessed or enforced by an agency
(a) * * * pursuant to Federal law; and (3) is
(1) * * * assessed or enforced pursuant to an
(iv) Is for payment for the provision FARM CREDIT ADMINISTRATION administrative proceeding or a civil
of property or services which the person action in the Federal courts.2
has not provided as claimed, shall be 12 CFR Part 622 The FCA imposes and enforces CMPs
subject, in addition to any other remedy through the Farm Credit Act 3 and the
that may be prescribed by law, to a civil RIN 3052–AD29
Flood Disaster Protection Act of 1973, as
penalty of not more than $11,181 for amended. FCA’s regulations governing
Rules of Practice and Procedure;
each such claim. CMPs are found in 12 CFR parts 622 and
Adjusting Civil Money Penalties for
* * * * * Inflation 623. Part 622 establishes rules of
(b) * * * practice and procedure applicable to
(1) * * * AGENCY: Farm Credit Administration. formal and informal hearings held
(ii) Contains or is accompanied by an ACTION: Final rule. before the FCA, and to formal
express certification or affirmation of investigations conducted under the
the truthfulness and accuracy of the SUMMARY: This regulation implements Farm Credit Act. Part 623 prescribes
contents of the statement, shall be inflation adjustments to civil money rules regarding persons who may
subject, in addition to any other remedy penalties (CMPs) that the Farm Credit practice before the FCA and the
that may be prescribed by law, to a civil Administration (FCA) may impose or circumstances under which such
penalty of not more than $11,181 for enforce pursuant to the Farm Credit Act persons may be suspended or debarred
each such statement. of 1971, as amended (Farm Credit Act), from practice before the FCA.
* * * * * and pursuant to the Flood Disaster
Protection Act of 1973, as amended by B. CMPs Issued Under the Farm Credit
PART 1017—IDENTIFICATION AND the National Flood Insurance Reform Act
PROTECTION OF UNCLASSIFIED Act of 1994 (Reform Act), and further The Farm Credit Act provides that
CONTROLLED NUCLEAR amended by the Biggert-Waters Flood any Farm Credit System (System)
INFORMATION Insurance Reform Act of 2012 (Biggert- institution or any officer, director,
Waters Act). employee, agent, or other person
■ 26. The authority citation for part DATES: Effective date: This regulation is participating in the conduct of the
1017 continues to read as follows: effective on January 15, 2018. affairs of a System institution who
Authority: 42 U.S.C. 7101 et seq.; 50 U.S.C. FOR FURTHER INFORMATION CONTACT: violates the terms of a cease-and-desist
2401 et seq.; 42 U.S.C. 2168; 28 U.S.C. 2461 Michael T. Wilson, Policy Analyst, order that has become final pursuant to
note. Office of Regulatory Policy, (703) 883– section 5.25 or 5.26 of the Farm Credit
■ 27. Section 1017.29 is amended by 4124, TTY (703) 883–4056, wilsonm@ Act must pay up to a maximum daily
revising paragraph (c) to read as follows: fca.gov, or Autumn R. Agans, Attorney- amount of $1,000 4 during which such
Advisor, Office of General Counsel, violation continues. This CMP
§ 1017.29 Civil penalty. maximum was set by the Farm Credit
(703) 883–4082, TTY (703) 883–4056,
* * * * * agansa@fca.gov. Amendments Act of 1985, which
(c) Amount of penalty. The Director amended the Farm Credit Act. Orders
SUPPLEMENTARY INFORMATION:
may propose imposition of a civil
penalty for violation of a requirement of I. Objective 1 Note: While the 1990 Act, as amended by 1996

a regulation under paragraph (a) of this and 2015 Acts, uses the term ‘‘civil monetary
The objective of this regulation is to penalties’’ for these penalties or other sanctions, the
section or a compliance order issued adjust the maximum CMPs for inflation Farm Credit Act and the FCA Regulations use the
under paragraph (b) of this section, not through a final rulemaking to retain the term ‘‘civil money penalties.’’ Both terms have the
to exceed $264,093 for each violation. deterrent effect of such penalties. same meaning. Accordingly, this rule uses the term
ethrower on DSK3G9T082PROD with RULES

civil money penalty, and both terms may be used
* * * * * interchangeably.
II. Background
2 See 28 U.S.C. 2461 note.
PART 1050—FOREIGN GIFTS AND A. Introduction 3 Public Law 92–181, as amended.
DECORATIONS 4 The inflation-adjusted CMP in effect on January
The Federal Civil Penalties Inflation 15, 2017, for a violation of a final order is $2,224
■ 28. The authority citation for part Adjustment Act of 1990, as amended by per day, as set forth in § 622.61(a)(1) of FCA
1050 continues to read as follows: the Debt Collection Improvement Act of regulations.

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Document Created: 2018-01-11 04:53:58
Document Modified: 2018-01-11 04:53:58
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		Effective date: This regulation is effective on January 15, 2018.
Contact		Michael T. Wilson, Policy Analyst, Office of Regulatory Policy, (703) 883-4124, TTY (703) 883-4056, [email protected], or Autumn R. Agans, Attorney-Advisor, Office of General Counsel, (703) 883-4082, TTY (703) 883-4056, [email protected]
FR Citation		83 FR 1293
RIN Number		3052-AD29
CFR Associated		Administrative Practice and Procedure; Crime; Investigations and Penalties