Financial Crimes Enforcement Network; Inflation Adjustment of Civil Monetary Penalties
FinCEN publishes this final rule to reflect inflation adjustments to its civil monetary penalties ("CMPs") as mandated by the Federal Civil Penalties Inflation Adjustment Act of...
FinCEN publishes this final rule to reflect inflation adjustments to its civil monetary penalties (“CMPs”) as mandated by the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended. This rule adjusts certain CMPs within the jurisdiction of FinCEN to the maximum amount required by that act.
DATES:
Effective January 28, 2021.
FOR FURTHER INFORMATION CONTACT:
The FinCEN Regulatory Support Section at 1-800-767-2825, or electronically at
frc@fincen.gov.
SUPPLEMENTARY INFORMATION:
I. Background
In order to improve the effectiveness of civil monetary penalties (“CMPs”) and to maintain their deterrent effect, the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended, 28 U.S.C. 2461 note (the “Act”), requires Federal agencies to adjust each CMP provided by law within the jurisdiction of the agency. The Act requires agencies to adjust the level of CMPs with an initial “catch-up” adjustment through an interim final rulemaking and to make subsequent annual adjustments for inflation, without needing to provide notice and the opportunity for public comment otherwise required by 5 U.S.C. 553. The Act provides that any increase in a CMP shall apply to CMPs that are assessed after the date the increase takes effect, regardless of whether the underlying violation predated such increase.[1]
II. Method of Calculation
The method of calculating CMP adjustments applied in this final rule is required by the Act. Under the Act and the Office of Management and Budget (“OMB”) guidance required by the Act, annual inflation adjustments subsequent to the initial catch-up adjustment are to be based on the percent change between the Consumer Price Index for all Urban Consumers (“CPI-U”) for the October preceding the date of the adjustment and the prior year's October CPI-U. As set forth in OMB Memorandum M-21-10 of December 23, 2020, the adjustment multiplier for 2021 is 1.01182. In order to complete the 2021 annual adjustment, each current CMP is multiplied by the 2021 adjustment multiplier. Under the Act, any increase in CMP must be rounded to the nearest multiple of $1.[2]
Procedural Matters
1. Administrative Procedure Act
Section 4(b) of the Act requires agencies, beginning in 2017, to make annual adjustments for inflation to CMPs without needing to provide notice and the opportunity for public comment required by 5 U.S.C. 553. Additionally, the methodology used for adjusting CMPs for inflation, effective 2017, is
( printed page 7349)
provided by statute, with no discretion provided to agencies regarding the substance of the adjustments for inflation to CMPs. FinCEN is charged only with performing ministerial computations to determine the dollar amount of adjustments for inflation to CMPs. Accordingly, prior public notice and an opportunity for public comment and a delayed effective date are not required for this rule.
2. Regulatory Flexibility Act
Because no notice of proposed rulemaking is required, the provisions of the Regulatory Flexibility Act (5 U.S.C. 601et seq.) do not apply.
This rule is not a significant regulatory action as defined in section 3(f) of Executive Order 12866, and, as a result, this rule is not considered a regulatory action under Executive Order 13771.
4. Paperwork Reduction Act
The provisions of the Paperwork Reduction Act of 1995, Public Law 104-13, 44 U.S.C. Chapter 35, and its implementing regulations, 5 CFR part 1320, do not apply to this rule because there are no new or revised recordkeeping or reporting requirements.
Maximum penalty
amounts or range
of minimum and
maximum penalty
amounts for
penalties
assessed on or
after [INSERT
DATE OF
PUBLICATION IN
THE
FEDERALREGISTER
]
Civil Penalty for Failure to Register as Money Transmitting Business
5,000
8,708
Kenneth A. Blanco,
Director, Financial Crimes Enforcement Network.
Footnotes
1.
The increased CMPs, however, apply only with respect to underlying violations occurring after November 2, 2015 the date of enactment of the most recent amendment to the Act.
2.
FinCEN has previously described that it applied a catch-up adjustment for each penalty subject to the Act, based on the year and corresponding amount(s) for which the maximum penalty or range of minimum and maximum penalties was established or last adjusted, whichever is later.
See
Civil Monetary Penalty Adjustment and Table, 81 FR 42503, 42504 (June 30, 2016). Because the year varies for different penalties, penalties that were originally of the same size when promulgated can have different values today pursuant to the application of the Act.