83 FR 1517 - Rules of Practice and Procedure; Rules of Practice and Procedure in Adjudicatory Proceedings; Civil Money Penalty Inflation Adjustments

DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency

Federal Register Volume 83, Issue 9 (January 12, 2018)

The Office of the Comptroller of the Currency (OCC) is amending its rules of practice and procedure for national banks and its rules of practice and procedure in adjudicatory proceedings for Federal savings associations to remove the chart listing the maximum dollar amount of civil money penalties the OCC has authority to assess.

[Federal Register Volume 83, Number 9 (Friday, January 12, 2018)]
[Rules and Regulations]
[Pages 1517-1519]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-00536]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Parts 19 and 109

[Docket ID OCC-2018-0001]
RIN 1557-AE14


Rules of Practice and Procedure; Rules of Practice and Procedure 
in Adjudicatory Proceedings; Civil Money Penalty Inflation Adjustments

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Final rule.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) is 
amending its rules of practice and procedure for national banks and its 
rules of practice and procedure in adjudicatory proceedings for Federal 
savings associations to remove the chart listing the maximum dollar 
amount of civil money penalties the OCC has authority to assess.

DATES: This rule is effective on January 12, 2018.

FOR FURTHER INFORMATION CONTACT: Kevin Korzeniewski, Counsel, 
Legislative and Regulatory Activities Division, (202) 649-5490, or, for 
persons who are deaf or hearing impaired, TTY, (202) 649-5597.

SUPPLEMENTARY INFORMATION:

I. Background

    The Federal Civil Penalties Inflation Adjustment Act of 1990 (the 
1990 Adjustment Act),\1\ as amended by the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015 (the 2015 Adjustment 
Act),\2\ requires Federal agencies to adjust the amount of their civil 
money penalties (CMPs) \3\ for inflation by January 15 of each year, 
and requires the Office of Management and Budget (OMB) to issue 
guidance to Federal agencies not later than December 15 of each year, 
on implementing the required inflation adjustments.
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    \1\ Public Law 101-410, Oct. 5, 1990, 104 Stat. 890, codified at 
28 U.S.C. 2461 note.
    \2\ Public Law 114-74, Title VII, section 701(b), Nov. 2, 2015, 
129 Stat. 599, codified at 28 U.S.C. 2461 note.
    \3\ The 2015 Adjustment Act defined a ``civil monetary penalty'' 
to mean ``any penalty, fine, or other sanction that is for a 
specific monetary amount as provided by Federal law; or has a 
maximum amount provided for by Federal law; and is assessed or 
enforced by an agency pursuant to Federal law; and is assessed or 
enforced pursuant to an administrative proceeding or a civil action 
in the Federal courts.'' 28 U.S.C. 2461 note, section 3(2). Thus, a 
penalty based on another measure, such as a percentage of total 
assets, need not be adjusted.
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    On January 27, 2017, the OCC published a final rule amending its 
rules of practice and procedure for national banks and its rules of 
practice and procedure in adjudicatory proceedings for Federal savings 
associations to adjust the maximum amount of each CMP within its 
jurisdiction to administer for inflation.\4\ The final rule also 
changed the method for making subsequent inflation adjustments, 
consistent with the 2015 Adjustment Act and OMB guidance.\5\ 
Specifically, sections 19.240(a) and 109.103(c)(1) of the rule codified 
the formula for making inflation adjustments for national banks and 
Federal savings associations, respectively. Sections 19.240(b) and 
109.103(c)(2) of the rule provided a chart of penalties applicable 
during 2017. Sections 19.240(c) and 109.103(c)(3) also provided that 
notice of the maximum penalties which may be assessed for calendar 
years after 2017 will be published as a notice in the Federal Register 
on an annual basis on or before January 15 of each calendar year.\6\
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    \4\ 82 FR 8584 (January 27, 2017).
    \5\ See OMB Memorandum M-18-03, ``Implementation of the 2018 
annual adjustment pursuant to the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015,'' at 4, which permits 
agencies that have codified the formula to adjust CMPs for inflation 
to update the penalties through a notice rather than a regulation.
    \6\ To the extent an agency has codified a CMP amount in its 
regulations, the agency would need to update that amount by 
regulation. However, if an agency has codified the formula for 
making the CMP adjustments, then subsequent adjustments can be made 
solely by notice. See OMB Memorandum M-18-03, ``Implementation of 
the 2018 annual adjustment pursuant to the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015,'' at 4.

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[[Page 1518]]

II. Description of the Final Rule

    Because the OCC will annually publish the maximum amount of CMPs 
the agency has authority to assess through a notice in the Federal 
Register, the CMP amounts listed in the charts at 12 CFR 19.240(b) and 
109.103(c)(2) are out of date. Therefore, in order to avoid any 
confusion, the OCC is deleting the charts in sections 19.240(b) and 
109.103(c)(2). The OCC is also making technical and conforming 
amendments in sections 19.240 and 109.103(c) to delete references to 
those charts, while retaining a description of the formula used to make 
the inflation adjustments and information on how the OCC will publish 
notice of the adjustments going forward. A complete list of the maximum 
amount of CMPs that can be assessed by the OCC during the current 
calendar year for violations that occurred on or after November 2, 
2015, is also being published today in the Federal Register.\7\
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    \7\ Penalties assessed for violations occurring prior to 
November 2, 2015, will be subject to the maximum amounts set forth 
in the OCC's regulations in effect prior to the enactment of the 
2015 Adjustment Act.
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III. Regulatory Analysis

A. Administrative Procedure Act

    The Administrative Procedure Act (APA) generally requires that an 
agency publish a general notice of proposed rulemaking in the Federal 
Register, unless an exception applies. In this case, the OCC finds an 
exception for good cause that a general notice of proposed rulemaking 
would be unnecessary, as the only changes in this final rule are 
technical amendments to remove outdated information regarding the OCC's 
maximum CMP amounts and update related cross-references.

B. Delayed Effective Date

    Section 302 of the Riegle Community Development and Regulatory 
Improvement Act of 1994 \8\ (RCDRIA) requires that the effective date 
of new regulations and amendments to regulations that impose additional 
reporting, disclosures, or other new requirements on insured depository 
institutions shall be the first day of a calendar quarter that begins 
on or after the date the regulations are published in final form. 12 
U.S.C. 4802(b)(1). The RCDRIA does not apply to this final rule because 
the rule does not impose any additional reporting, disclosures, or 
other new requirements.
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    \8\ 12 U.S.C. 4802.
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C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) requires that the agency 
determine the rule's impact on small entities and consider options to 
reduce any significant economic impact on a substantial number of small 
entities. The RFA applies only to rules for which an agency publishes a 
general notice of proposed rulemaking pursuant to 5 U.S.C. 553(b).\9\ 
Because the 2015 Adjustment Act specifically exempted agencies' annual 
adjustments from the requirements of the APA,\10\ the OCC is not 
issuing a general notice of proposed rulemaking. Therefore, the RFA 
does not apply to this final rule.
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    \9\ 5 U.S.C. 601(2).
    \10\ 28 U.S.C. 2461 note, section 4(b)(2) (``the head of an 
agency shall adjust civil money penalties and shall make the 
adjustment notwithstanding section 553 of title 5, United States 
Code'').
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D. Unfunded Mandates Reform Act of 1995

    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that an agency prepare a budgetary impact statement before promulgating 
any rule likely to result in a Federal mandate that may result in the 
expenditure by State, local, and tribal governments, in the aggregate, 
or by the private sector of $100 million or more, as adjusted for 
inflation, in any one year.\11\ The Unfunded Mandates Reform Act only 
applies when an agency issues a general notice of proposed rulemaking. 
Because the OCC is not issuing a general notice of proposed rulemaking, 
this final rule is not subject to section 202 of the Unfunded Mandates 
Reform Act.
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    \11\ 2 U.S.C. 1532.
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E. Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (PRA),\12\ the OCC may 
not conduct or sponsor, and notwithstanding any other provision of law, 
a person is not required to respond to, an information collection 
unless the information collection displays a valid OMB control number. 
The final rule contains no information collection requirements under 
the PRA.
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    \12\ 44 U.S.C. 3501 et seq.
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List of Subjects

12 CFR Part 19

    Administrative practice and procedure, Crime, Equal access to 
justice, Investigations, National banks, Penalties, Securities.

12 CFR Part 109

    Administrative practice and procedure, Federal savings 
associations, Penalties.

Authority and Issuance

    For the reasons set out in the preamble, parts 19 and 109 of 
chapter I of title 12 of the Code of Federal Regulations are amended as 
follows:

PART 19--RULES OF PRACTICE AND PROCEDURE

0
1. The authority citation for part 19 is revised to read as follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 93a, 164, 
481, 504, 1817, 1818, 1820, 1831m, 1831o, 1832, 1884, 1972, 3102, 
3108(a), 3110, 3909, and 4717; 15 U.S.C. 78(h) and (i), 78o-4(c), 
78o-5, 78q-1, 78s, 78u, 78u-2, 78u-3, 78w, and 1639e; 28 U.S.C. 2461 
note; 31 U.S.C. 330 and 5321; and 42 U.S.C. 4012a.


0
2. Section 19.240 is revised to read as follows:


Sec.  19.240  Inflation adjustments.

    (a) Statutory formula to calculate inflation adjustments. The OCC 
is required by statute to annually adjust for inflation the maximum 
amount of each civil money penalty within its jurisdiction to 
administer. The inflation adjustment is calculated by multiplying the 
maximum dollar amount of the civil money penalty for the previous 
calendar year by the cost-of-living inflation adjustment multiplier 
provided annually by the Office of Management and Budget and rounding 
the total to the nearest dollar.
    (b) Notice of inflation adjustments. The OCC will publish notice in 
the Federal Register of the maximum penalties which may be assessed on 
an annual basis on or before January 15 of each calendar year based on 
the formula in paragraph (a) of this section, for penalties assessed 
on, or after, the date of publication of the most recent notice related 
to conduct occurring on, or after, November 2, 2015.

PART 109--RULES OF PRACTICE AND PROCEDURE IN ADJUDICATORY 
PROCEEDINGS

0
3. The authority citation for part 109 is revised to read as follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 1464, 1467, 1467a, 
1468, 1817, 1818, 1820(k), 1829(e), 1832, 1884, 1972, 3349, 4717, 
5412(b)(2)(B); 15 U.S.C. 78(l), 78o-5, 78u-2, 1639e; 28 U.S.C. 2461 
note; 31 U.S.C. 5321; and 42 U.S.C. 4012a.


0
4. Section 109.103 is amended by revising paragraph (c) to read as 
follows:

[[Page 1519]]

Sec.  109.103  Civil money penalties.

* * * * *
    (c) Maximum amount of civil money penalties--(1) Statutory formula. 
The OCC is required by statute to annually adjust for inflation the 
maximum amount of each civil money penalty within its jurisdiction to 
administer. The inflation adjustment is calculated by multiplying the 
maximum dollar amount of the civil money penalty for the previous 
calendar year by the cost-of-living inflation adjustment multiplier 
provided annually by the Office of Management and Budget and rounding 
the total to the nearest dollar.
    (2) Notice of inflation adjustments. The OCC will publish notice in 
the Federal Register of the maximum penalties which may be assessed on 
an annual basis on, or before, January 15 of each calendar year based 
on the formula in paragraph (a) of this section, for penalties assessed 
on, or after, the date of publication of the most recent notice related 
to conduct occurring on or after November 2, 2015.

    Dated: January 9, 2018.
Karen Solomon,
Acting Senior Deputy Comptroller and Chief Counsel, Office of the 
Comptroller of the Currency.
[FR Doc. 2018-00536 Filed 1-11-18; 8:45 am]
BILLING CODE 4810-33-P