[Federal Register: November 10, 2004 (Volume 69, Number 217)]
[Rules and Regulations]
[Page 65067-65069]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10no04-3]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 19
[Docket No. 04-24]
RIN 1557-AC82
Rules of Practice and Procedure; 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 to adjust the maximum
amount of each civil money penalty (CMP) within its jurisdiction to
account for inflation. This action, including the amount of the
adjustment, is required under the Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended by the Debt Collection Improvement
Act of 1996. The OCC is also making a technical correction to resolve
an error in the numbering of sections in part 19.
DATES: Effective Date: December 10, 2004.
FOR FURTHER INFORMATION CONTACT: Jean Campbell, Senior Attorney,
Legislative and Regulatory Activities Division, (202) 874-5090, or
Carolyn Amundson, Counsel, Enforcement and Compliance Division, (202)
874-4800, Office of the Comptroller of the Currency, 250 E Street, SW.,
Washington, DC 20219.
SUPPLEMENTARY INFORMATION:
Background
The Inflation Adjustment Act (Act), 28 U.S.C. 2461 note, requires
the OCC, as well as other Federal agencies with CMP authority, to
publish regulations to adjust each CMP authorized by a law that the
agency has jurisdiction to administer. The purpose of these adjustments
is to maintain the deterrent effect of CMPs and to promote compliance
with the law. The Act requires adjustments to be made at least once
every four years following the initial adjustment. The OCC's prior
adjustment to each CMP was published in the Federal Register on
December 11, 2000, 65 FR 77250, and became effective that same day.
The Act requires that the adjustment reflect the percentage
increase in the Consumer Price Index between June of the calendar year
preceding the year in which the adjustment will be made and June of the
calendar year in which the amount was last set or adjusted. The Act
defines the Consumer Price Index as the Consumer Price Index for all
urban consumers (CPI-U) published by the Department of Labor.\1\ See 28
U.S.C. 2461 note. In addition, the Act provides rules for rounding off
increases,\2\ and requires that any increase in a CMP apply only to
violations that occur after the date of the adjustment. Finally,
section 2 of the Debt Collection Improvement Act, 28 U.S.C. 2461 note,
limited the initial adjustment of a CMP pursuant to the Act to 10
percent of the amount set by statute.
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\1\ The Department of Labor computes the CPI-U using two
different base time periods, 1967 and 1982-1984, and the Act does
not specify which of these base periods should be used to calculate
the inflation adjustment. The OCC, consistent with the other Federal
banking agencies, has used the CPI-U with 1982-84 as the base
period.
\2\ The Act's rounding rules require that an increase be rounded
to the nearest multiple of: $10 in the case of penalties less than
or equal to $100; $100 in the case of penalties greater than $100
but less than or equal to $1,000; $1,000 in the case of penalties
greater than $1,000 but less than or equal to $10,000; $5,000 in the
case of penalties greater than $10,000 but less than or equal to
$100,000; $10,000 in the case of penalties greater than $100,000 but
less than or equal to $200,000; and $25,000 in the case of penalties
greater than $200,000. See 28 U.S.C. 2461 note.
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Description of the Final Rule
Inflation Adjustment
This final rule adjusts the amount for each type of CMP that the
OCC has jurisdiction to impose in accordance with the statutory
requirements by revising the table contained in subpart O of 12 CFR
part 19. The table identifies the statutes that provide the OCC with
CMP authority, describes the different tiers of penalties provided in
each statute (as applicable), and sets out the inflation-adjusted
maximum penalty that the OCC may impose pursuant to each statutory
provision.
The Act requires that we compute the inflation adjustment by
comparing the CPI-U for June of the year in which the CMPs were last
set or adjusted with the CPI-U for June of the calendar year preceding
the adjustment. 28 U.S.C. 2461 note. For those CMPs that were adjusted
in 2000, we compared the CPI-U for June 2003 (183.7) with the CPI-U for
June 2000 (172.4). This resulted in an inflation adjustment of 6.6
percent. For those penalties that were last adjusted in 1997, we
compared the CPI-U for June 1997 (160.3) to the CPI-U for June 2003
(183.7). This resulted in an inflation increase of 14.6 percent. The
penalty for failure to require flood insurance or notify the borrower
of lack of coverage, 42 U.S.C. 4012a(f)(5), has never been adjusted for
inflation because of application of the rounding rules. For that
penalty, we compared the CPI-U for June of the year of enactment, 1994
\3\ (148.0), with the CPI-U for June 2003 (183.7). This resulted in an
inflation increase of 24.1 percent.
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\3\ See Riegle Community Development and Regulatory Improvement
Act of 1994 (RDCRIA), Pub. L. 103-325, Title V, section 525, 108
Stat. 2260.
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We multiplied the amount of each CMP by the appropriate percentage
inflation adjustment and added that amount to the current penalty. We
rounded the resulting dollar amount up or down according to the
rounding requirements of the Act. In some cases, rounding resulted in
no adjustment to the CMP. In the case of the flood insurance penalty,
the increase was capped at 10 percent because this is the initial
adjustment. The following table shows both the present CMPs and the
inflation adjusted CMPs. The table published in Sec. 19.240(a) is
shorter and shows only the adjusted CMPs, not the calculations.
New Sec. 19.240(b) states that the adjustments made in Sec.
19.240(a) apply only to violations that occur after the effective date
of this final rule.
The OCC will readjust these amounts in 2008 and every four years
thereafter, assuming there are no further changes to the mandate
imposed by the Act.
[[Page 65068]]
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Amount of Adjusted
Maximum Percentage Amount of increase-- maximum
U.S. Code citation Description penalty (in increase increase (in rounded (in penalty (in
dollars) dollars) dollars) dollars)
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12 U.S.C. 93(b), 504, 1817(j)(16), Tier 1...................... 5,500 14.6 803 1,000 6,500
1818(i)(2), and 1972(2)(F).
Tier 2...................... 27,500 14.6 4,015 5,000 32,500
Tier 3...................... 1,175,000 6.6 77,550 75,000 1,250,000
12 U.S.C. 164 and 3110(c)................. Tier 1...................... 2,200 6.6 145 0 2,200
Tier 2...................... 22,000 14.6 3,212 5,000 27,000
Tier 3...................... 1,175,000 6.6 77,550 75,000 1,250,000
12 U.S.C. 1832(c) and 3909(d)(1).......... ............................ 1,100 14.6 161 0 1,100
12 U.S.C. 1884............................ ............................ 110 14.6 16 0 110
12 U.S.C. 3110(a)......................... ............................ 27,500 14.6 4,015 5,000 32,500
15 U.S.C. 78u-2(b)........................ Tier 1 (natural person)..... 5,500 14.6 803 1,000 6,500
Tier 1 (other person)....... 60,000 6.6 3,900 5,000 65,000
Tier 2 (natural person)..... 60,000 6.6 3,900 5,000 65,000
Tier 2 (other person)....... 300,000 6.6 19,800 25,000 325,000
Tier 3 (natural person)..... 120,000 6.6 7,920 10,000 130,000
Tier 3 (other person)....... 575,000 6.6 37,950 50,000 625,000
42 U.S.C. 4012a(f)(5)..................... Per violation............... 350 24.1 84 35 385
Per year.................... 115,000 6.6 7,475 10,000 125,000
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Technical Correction
The OCC also is amending 12 CFR 19.240 to make a technical
correction. When we issued subpart P (pertaining to the removal,
suspension, and debarment of accountants from performing audit
services) (68 FR 48265, Aug. 13, 2003), we inadvertently assigned a
number--Sec. 19.241--that already appears in Subpart O. To correct
this numbering overlap, the final rule amends subpart O by combining
Sec. Sec. 19.240 (prescribing the inflation-adjusted CMP amounts) and
19.241 (specifying when the inflation-adjusted CMP amounts apply) into
Sec. 19.240 and removes Sec. 19.241 from subpart O. Revised Sec.
19.240 is divided into paragraphs (a) and (b). Former Sec. 19.240
becomes paragraph (a) and former Sec. 19.241 becomes paragraph (b).
Section 19.241 in subpart P is unchanged.
Procedural Issues
1. Notice and Comment Procedure
Under the Administrative Procedure Act (APA), an agency may
dispense with public notice and an opportunity for comment if the
agency finds, for good cause, that these procedural requirements are
impracticable, unnecessary, or contrary to the public interest. 5
U.S.C. 553(b)(B). The Act provides the OCC no discretion in calculating
the amount of the civil penalty adjustment. The OCC, accordingly,
cannot vary the amount of the adjustment to reflect any views or
suggestions provided by commenters. In addition, combining Sec. Sec.
19.240 and 19.241 is technical in nature. Therefore, notice and comment
are unnecessary and delay in the form of notice and comment procedure
is contrary to the public interest. Accordingly, good cause exists to
dispense with this procedure.
2. Delayed Effective Date
The 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. See
12 U.S.C. 4802(b)(1). The RCDRIA does not apply to this final rule
because the rule merely increases the amount of CMPs that already exist
and does not impose any additional reporting, disclosures, or other new
requirements.
Regulatory Flexibility Act
The Regulatory Flexibility Act applies only to rules for which an
agency publishes a general notice of proposed rulemaking pursuant to 5
U.S.C. 553(b). See 5 U.S.C. 601(2). Because the OCC has determined for
good cause that the APA does not require public notice and comment on
this final rule, we are not publishing a general notice of proposed
rulemaking. Thus, the Regulatory Flexibility Act does not apply to this
final rule.
Executive Order 12866
The OCC has determined that this final rule is not a significant
regulatory action under Executive Order 12866.
Unfunded Mandates Reform Act of 1995
The OCC has determined that this final rule will not result in
expenditures by State, local, and tribal governments, or by the private
sector, of $100 million or more in any one year. Accordingly, a
budgetary impact statement is not required under section 202 of the
Unfunded Mandates Reform Act of 1995.
List of Subjects in 12 CFR Part 19
Administrative practice and procedure, Crime, Equal access to
justice, Investigations, National banks, Penalties, Securities.
Authority and Issuance
0
For the reasons set out in the preamble, part 19 of chapter I of title
12 of the Code of Federal Regulations is 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,
505, 1817, 1818, 1820, 1831m, 1831o, 1972, 3102, 3108(a), 3909, and
4717; 15 U.S.C. 78(h) and (i), 78o-4(c), 78o-5, 78q-1, 78s, 78u,
78u-2, 78u-3, and 78w; 28 U.S.C. 2461 note; 31 U.S.C. 330 and 5321;
and 42 U.S.C. 4012a.
0
2. Section 19.241 of subpart O is removed.
0
3. Section 19.240 of subpart O is revised to read as follows:
Sec. 19.240 Inflation adjustments.
(a) The maximum amount of each civil money penalty within the OCC's
jurisdiction is adjusted in accordance with the Federal Civil Penalties
Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note) as follows:
[[Page 65069]]
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Maximum
U.S. Code citation Description penalty (in
Dollars)
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12 U.S.C. 93(b), 504, 1817(j)(16), Tier 1.............. 6,500
1818(i)(2), and 1972(2)(F).
Tier 2.............. 32,500
Tier 3.............. 1,250,000
12 U.S.C. 164 and 3110(c)......... Tier 1.............. 2,200
Tier 2.............. 27,000
Tier 3.............. 1.250,000
12 U.S.C. 1832(c) and 3909(d)(1).. .................... 1,100
12 U.S.C. 1884.................... .................... 110
12 U.S.C. 3110(a)................. .................... 32,500
15 U.S.C. 78u-2(b)................ Tier 1 (natural 6,500
person).
Tier 1 (other 65,000
person).
Tier 2 (natural 65,000
person).
Tier 2 (other 325,000
person).
Tier 3 (natural 130,000
person).
Tier 3 (other 625,000
person).
42 U.S.C. 4012a(f)(5)............. Per violation....... 385
Per year............ 125,000
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(b) The adjustments in Sec. 19.240(a) apply to violations that
occur after December 10, 2004.
Dated: November 3, 2004.
Julie L. Williams,
Acting Comptroller of the Currency.
[FR Doc. 04-24974 Filed 11-9-04; 8:45 am]
BILLING CODE 4810-33-P