[Federal Register Volume 77, Number 215 (Tuesday, November 6, 2012)]
[Rules and Regulations]
[Pages 66529-66534]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-27074]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
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The Code of Federal Regulations is sold by the Superintendent of Documents.
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Federal Register / Vol. 77, No. 215 / Tuesday, November 6, 2012 /
Rules and Regulations
[[Page 66529]]
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Parts 19 and 109
[Docket ID OCC-2012-0011]
RIN 1557-AD61
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 publish the maximum amount, adjusted for
inflation, of each civil money penalty (CMP) within its jurisdiction to
administer. These actions, including the adjustment methodology, are
required under the Federal Civil Penalties Inflation Adjustment Act of
1990 (Inflation Adjustment Act or Act), as amended by the Debt
Collection Improvement Act of 1996 (Debt Collection Improvement Act).
DATES: Effective: December 6, 2012.
FOR FURTHER INFORMATION CONTACT: Jean Campbell, Senior Attorney,
Legislative and Regulatory Activities Division, (202) 874-5090, or P.
Holley Roberts, Senior Attorney, 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,
periodically to evaluate and publish by regulation the inflation-
adjusted maximum assessment for 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 evaluations and inflation adjustments to
be made at least once every four years following the initial
adjustment.
The Act provides detailed instructions for calculating the
inflation adjustment. It specifies that the adjustment shall 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 increases \2\ and requires that any increase in a
CMP maximum apply only to violations that occur after the date of the
adjustment. Finally, section 2 of the Debt Collection Improvement Act
amended the Inflation Adjustment Act by limiting the initial adjustment
of a CMP maximum pursuant to the Inflation Adjustment Act to no more
than 10 percent of the amount established by statute. See 28 U.S.C.
2461 note.
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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 1982-1984 as the base
period. Data on the CPI-U is available at http://bls.gov.
\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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Pursuant to Title III of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, Public Law 111-203, 124 Stat. 1376 (2010),
Congress transferred the powers, authorities, rights, and duties of the
Office of Thrift Supervision (OTS) to the OCC on July 21, 2011, and the
OCC assumed all functions of the OTS and the Director of the OTS
relating to Federal savings associations. Therefore, the OCC now has
responsibility for the ongoing supervision, examination, and regulation
of Federal savings associations as of the transfer date. Accordingly,
the OCC also is amending its rules of practice and procedure in
adjudicatory proceedings for Federal savings associations, set forth at
12 CFR 109.103(c), to adjust the maximum amount of each CMP within its
jurisdiction to administer to account for inflation.\3\
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\3\ Although we are amending both 12 CFR part 19 and 12 CFR part
109 at this time, the OCC expects to consolidate these provisions in
the future as part of its integration of the OCC and OTS rules.
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The OCC's last adjustments to the maximum assessments of CMPs
applicable to national banks were published in the Federal Register on
November 10, 2008, 73 FR 66493, and became effective on December 10,
2008. The last adjustments to the maximum assessments of CMPs
applicable to Federal savings associations were published in the
Federal Register on October 27, 2008, 73 FR 63625, and became effective
on October 27, 2008.
Description of the Final Rule
This final rule sets forth the inflation-adjusted maximum
assessment for each CMP that the OCC has jurisdiction to impose in
accordance with the statutory requirements by revising the table
contained in 12 CFR 19.240(a) with respect to national banks and the
table contained in 12 CFR 109.103(c) with respect to Federal savings
associations. Each table identifies the statutes that authorize the OCC
to assess CMPs, 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 factor by comparing
the CPI-U for June of the calendar year preceding the adjustment with
the CPI-U for June of the year in which the CMPs were last
[[Page 66530]]
set or increased.\4\ See 28 U.S.C. 2461 note. The vast majority of CMPs
applicable to national banks and Federal savings associations were last
increased in 2008. For those CMPs, we compared the CPI-U for June 2011
(225.722) with the CPI-U for June 2008 (218.815), resulting in an
inflation factor of 3.2 percent. A few penalties were last increased in
2000. For those penalties, we compared the CPI-U for June 2011 (225.7)
with the CPI-U for June 2000 (172.4), resulting in an inflation factor
of 30.9 percent. Finally, a few penalties were last increased in 1997.
For those penalties, we compared the CPI-U for June 2011 (225.7) with
the CPI-U for June 1997 (160.3), resulting in an inflation factor of
40.8 percent.
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\4\ As a general matter, if a preliminary calculated increase
for a given CMP maximum fails to reach the level warranting an
actual increase under the rounding rules prescribed by statute, then
the maximum for that CMP does not change. In that case, the
calculation in subsequent years would use an inflation adjustment
factor reflecting changes in the Consumer Price Index since that CMP
was last established or increased, whichever is more recent.
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To obtain the inflation-adjusted CMP maximums, we multiplied the
current amount of each CMP maximum by the appropriate percentage
inflation factor (as calculated above) to determine the preliminary
increase amount, rounded the preliminary increase amount up or down
according to the rounding requirements of the Act, and then added the
rounded increase amount to the current penalty maximum. In some cases,
application of the rounding rules resulted in zero increase and no
change to a CMP maximum.\5\ In addition, we are providing in this
preamble two worksheets showing the calculations for each national bank
CMP and each Federal savings association CMP (see below). These
worksheets explain step-by-step how we calculated the inflation
adjustment for each penalty. Accordingly, this rule replaces the CMP
charts at Sec. Sec. 19.240(a) and 109.103(c) with revised charts
reflecting the maximum CMP amounts that will be in effect as of the
effective date of this final rule.
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\5\ For example, there is no inflation adjustment for the
maximum penalty prescribed by 12 U.S.C. 164 for tier 2. The current
amount of that penalty is $32,000. Because it was last adjusted in
2008, the appropriate percentage increase is 3.2 percent. The amount
of the current penalty ($32,000) multiplied by 3.2 percent equals a
preliminary increase of $1,024. The rounding rules specify that a
penalty greater than $10,000 but less than or equal to $100,000
should be rounded to the nearest $5,000. In order to round up to
$5,000, the preliminary increase would need to be at least $2,500,
which it is not. Therefore, the maximum penalty is not being
adjusted.
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Pursuant to Sec. 100208 of the Biggert-Waters Flood Insurance
Reform Act of 2012,\6\ we are amending the maximum CMP prescribed in 42
U.S.C. 4012a(f)(5).\7\ In that statute, Congress increased the maximum
CMP per violation from $385 to $2,000 and eliminated the $135,000 cap
on the total amount of penalties assessed against a single regulated
lender in any calendar year. As a result of that amendment, this CMP is
not subject to adjustment at this time. Accordingly, in the worksheets
below and the amended charts at Sec. Sec. 19.240(a) and 109.103(c),
the maximum assessment of the penalty for violating 42 U.S.C.
4012a(f)(5) is the new maximum of $2,000 per violation.
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\6\ Public Law 112-141, 126 Stat. 405 (July 6, 2012).
\7\ 42 U.S.C. 4012a(f) requires the OCC to assess civil money
penalties against a national bank or Federal savings association
that is found to have a pattern or practice of committing certain
violations of the Flood Disaster Protection Act.
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Finally, we are amending Sec. Sec. 19.240(a) and 109.103(c),
consistent with the statute, to state that the adjustments made in
Sec. Sec. 19.240(a) and 109.103(c) apply only to violations that occur
after the effective date of this final rule.
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Procedural Issues
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 methodology used to calculate the adjustment or the
amount of the adjustment to reflect any views or suggestions provided
by commenters. For this reason, the OCC has concluded that notice and
comment procedures are unnecessary and that good cause exists for
dispensing with them.
Delayed Effective Date
The Riegle Community Development and Regulatory Improvement Act of
1994 (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.
The APA generally requires an agency to publish a rule 30 days
prior to its effective date. See 4 U.S.C. 553(d). This rule satisfies
that requirement.
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.
Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C.
1532, 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. The Unfunded Mandates Reform
Act only applies when an agency issues a general notice of proposed
rulemaking. Because we are not publishing a notice of proposed
rulemaking, this final rule is not subject to section 2020 of the
Unfunded Mandates Reform Act.
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, Penalties.
[[Page 66533]]
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 continues 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 19.240 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:
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(b) The adjustments in paragraph (a) of this section apply to
violations that occur after December 6, 2012.
PART 109--RULES OF PRACTICE AND PROCEDURE IN ADJUDICATORY
PROCEEDINGS
0
3. The authority citation for part 109 continues to read as follows:
Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 1464, 1467, 1467a,
1468, 1817(j), 1818, 1820(k), 1829(e), 3349, 4717, 5412(b)(2)(B); 15
U.S.C. 78(l), 78o-5, 78u-2; 28 U.S.C. 2461 note; 31 U.S.C. 5321; and
42 U.S.C. 4012a.
0
4. Section 109.103(c) is amended by revising the last sentence of the
introductory text and the chart to read as follows:
Sec. 109.103 Civil money penalties.
* * * * *
(c) * * * The amounts in this chart apply to violations that occur
after December 6, 2012:
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Dated: October 26, 2012.
Thomas J. Curry,
Comptroller of the Currency.
[FR Doc. 2012-27074 Filed 11-5-12; 8:45 am]
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