[Federal Register Volume 78, Number 206 (Thursday, October 24, 2013)]
[Notices]
[Pages 63465-63466]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-25036]
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FARM CREDIT SYSTEM INSURANCE CORPORATION
Adjusting Civil Money Penalties for Inflation
AGENCY: Farm Credit System Insurance Corporation.
ACTION: Notice.
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SUMMARY: This notice assesses the need for cost-of-living adjustments
to the civil money penalties (CMPs) that the Farm Credit System
Insurance Corporation (FCSIC) may impose under the Farm Credit Act of
1971, as amended. The Federal Civil Penalties Inflation Adjustment Act
of 1990, as amended by the Debt Collection Improvement Act of 1996,
requires all Federal agencies with statutory authority to impose CMPs
to regularly evaluate those CMPs and to adjust them periodically for
inflation, so they continue to maintain their deterrent value.
Consequently, FCSIC is
[[Page 63466]]
issuing this notice concerning any required adjustments to the CMPs.
FOR FURTHER INFORMATION CONTACT: Rick Pfitzinger, Director Risk
Management or Howard Rubin, General Counsel, Farm Credit System
Insurance Corporation, 1501 Farm Credit Drive, McLean, Virginia 22102,
(703) 883-4380, TTY (703) 883-4390.
SUPPLEMENTARY INFORMATION:
Background
A. Statutes Concerning Inflation Adjustment of Civil Money Penalties
The Federal Civil Penalties Inflation Adjustment Act of 1990 (FCPIA
Act),\1\ as amended by the Debt Collection Improvement Act of 1996
(DCIA),\2\ provides for the regular evaluation of CMPs and requires
FCSIC, and every other Federal agency with authority to impose CMPs,\3\
to ensure that CMPs continue to maintain their deterrent values. An
agency must enact regulations that adjust its CMPs pursuant to the
inflation adjustment formula of the FCPIA Act. The amended FCPIA Act
specifies that inflation-adjusted CMPs will apply only to violations
that occur after the effective date of the adjustment. The inflation
adjustment is based on the percentage increase in the Consumer Price
Index (CPI) for all consumers (CPI-U).\4\ Specifically, the term
``cost-of-living adjustment'' is defined as ``the percentage (if any)
for each civil monetary penalty by which (1) the Consumer Price Index
for the month of June of the calendar year preceding the adjustment,
exceeds (2) the Consumer Price Index for the month of June of the
calendar year in which the amount of such civil monetary penalty was
last set or adjusted pursuant to law.'' Furthermore, any increase to a
CMP that is adjusted for inflation must be rounded using a method
prescribed by the FCPIA Act. Agencies do not have discretion in
choosing whether to adjust a CMP, by how much to adjust a CMP, or the
methods used to determine the adjustment.
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\1\ Public Law 101-104, 104 Stat. 890 (October 5, 1990),
codified at 28 U.S.C. 2461 note.
\2\ Public Law 104-134, title III, section 31001(s), 110 Stat.
1321-373 (April 26, 1996), codified at 28 U.S.C. 2461 note.
\3\ Under the amended FCPIA Act, a CMP is defined 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. All three requirements must be met for a fine to be
defined as a CMP.
\4\ The CPI is published by the Department of Labor, Bureau of
Labor Statistics, and is available at its Web site: ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt.
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B. CMPs Imposed Pursuant to Section 5.65 of the Farm Credit Act
First, section 5.65(c) of the Farm Credit Act, as amended (Act)
provides that any insured Farm Credit System bank that willfully fails
or refuses to file any certified statement or pay any required premium
shall be subject to a penalty of not more than $100 for each day that
such violations continue, which penalty the FCSIC may recover for its
use.\5\ Second, section 5.65(d) of the Act provides that, except with
the prior written consent of the Farm Credit Administration, it shall
be unlawful for any person convicted of any criminal offense involving
dishonesty or a breach of trust to serve as a director, officer, or
employee of any System institution.\6\ For each willful violation of
section 5.65(d) of the Act, the institution involved shall be subject
to a penalty of not more than $100 for each day during which the
violation continues, which the FCSIC may recover for its use.
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\5\ 12 U.S.C. 2277a-14(c).
\6\ 12 U.S.C. 2277a-14(d).
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As adjusted for inflation pursuant to the requirements of the DCIA,
the current regulation at 12 CFR 1411.1, which was promulgated in 2001,
provides that FCSIC can impose a maximum penalty of $117 per day for a
violation under section 5.65(c) and (d) of the Act.
C. Mathematical Calculation
1. The adjustment calculation is based on the percentage by which
the CPI for June 2012 exceeds the CPI for June 2001. According to the
Bureau of Labor Statistics, the CPI for June 2001 was 178, and the CPI
for June 2012 was 229.478, resulting in a percentage change of 28.92
percent.
2. Penalty amounts remain the same in 12 CFR 1411.1.
3. The maximum CMP in 12 CFR 1411.1 for a violation of section
5.65(c) or (d) of the Act is currently $117.
Multiplying $117 by 28.92 percent results in $33.84. When that
number is rounded as required by the FCPIA Act,\7\ the inflation-
adjusted maximum remains the same.
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\7\ Any increase must be rounded to the nearest multiple of $100
in the case of penalties greater than $100 but less than or equal to
$1,000. Therefore, $33.84 is rounded to the nearest multiple of
$100, which is $0.
Dated: October 18, 2013.
Dale L. Aultman,
Secretary to the Board, Farm Credit System Insurance Corporation.
[FR Doc. 2013-25036 Filed 10-23-13; 8:45 am]
BILLING CODE 6710-01-P