[Federal Register Volume 81, Number 114 (Tuesday, June 14, 2016)]
[Rules and Regulations]
[Pages 38569-38572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-14031]
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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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Federal Register / Vol. 81, No. 114 / Tuesday, June 14, 2016 / Rules
and Regulations
[[Page 38569]]
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1083
[Docket No.: CFPB-2016-0028]
RIN 3170-AA62
Civil Penalty Inflation Adjustments
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Interim final rule with request for public comment.
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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is
publishing for public comment an interim final rule to adjust the civil
monetary penalties within the Bureau's jurisdiction for inflation, as
required by the Federal Civil Penalties Inflation Adjustment Act of
1990 (the Inflation Adjustment Act or the Act), as amended by the Debt
Collection Improvement Act of 1996 and further amended by the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (2015
Act).
DATES: This rule is effective on July 14, 2016. Comments must be
received on or before July 14, 2016.
ADDRESSES: You may submit comments, identified by Docket No. CFPB-2016-
0028 or RIN 3170-AA62, by any of the following methods:
Email: FederalRegisterComments @cfpb.gov. Include Docket
No. CFPB-2016-0028 or RIN 3170-AA62 in the subject line of the email.
Electronic: http://www.regulations.gov. Follow the
instructions for submitting comments.
Mail: Monica Jackson, Office of the Executive Secretary,
Consumer Financial Protection Bureau, 1700 G Street NW., Washington, DC
20552.
Hand Delivery/Courier: Monica Jackson, Office of the
Executive Secretary, Consumer Financial Protection Bureau, 1275 First
Street NE., Washington, DC 20002.
Instructions: All submissions should include the agency name and
docket number or Regulatory Information Number (RIN) for this
rulemaking. Because paper mail in the Washington, DC area and at the
Bureau is subject to delay, commenters are encouraged to submit
comments electronically. In general, all comments received will be
posted without change to http://www.regulations.gov. In addition,
comments will be available for public inspection and copying at 1275
First Street NE., Washington, DC 20002, on official business days
between the hours of 10 a.m. and 5 p.m. eastern time. You can make an
appointment to inspect the documents by telephoning (202) 435-7275.
All comments, including attachments and other supporting materials,
will become part of the public record and subject to public disclosure.
Sensitive personal information, such as account numbers or Social
Security numbers, should not be included. Comments generally will not
be edited to remove any identifying or contact information.
FOR FURTHER INFORMATION CONTACT: Kristin Bateman, Counsel, Legal
Division, Consumer Financial Protection Bureau, at (202) 435-7700.
SUPPLEMENTARY INFORMATION:
I. Background
The Inflation Adjustment Act, as amended by the 2015 Act, requires
Federal agencies to adjust the civil penalty amounts within their
jurisdiction for inflation by July 1, 2016, and then by January 15
every year thereafter.\1\ Agencies must make the initial 2016
adjustments through an interim final rulemaking published in the
Federal Register.\2\ Under the amended Act, any increase in a civil
penalty made under the Act will apply to penalties assessed after the
increase takes effect, including penalties whose associated violation
predated the increase.\3\ The inflation adjustments mandated by the Act
serve to maintain the deterrent effect of civil penalties and to
promote compliance with the law.
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\1\ See 28 U.S.C. 2461 note.
\2\ The statute also provides that, for the initial 2016
adjustment, an agency may adjust a civil penalty by less than the
otherwise required amount if (1) it determines, after publishing a
notice of proposed rulemaking and providing an opportunity for
comment, that increasing the civil penalty by the otherwise required
amount would have a negative economic impact or that the social
costs of increasing the civil penalty by the otherwise required
amount outweigh the benefits, and (2) the Director of the Office of
Management and Budget concurs with that determination. Inflation
Adjustment Act section 4(c), codified at 28 U.S.C. 2461 note. The
Bureau has chosen not to make use of this exception.
\3\ Inflation Adjustment Act section 6, codified at 28 U.S.C.
2461 note.
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II. Method of Calculation
The Inflation Adjustment Act prescribes a specific method for
calculating the inflation adjustments.\4\ As amended by the 2015 Act,
the Act provides that the maximum (and minimum, if applicable) amounts
for each civil penalty must be increased by the ``cost-of-living
adjustment,'' a term that the Act defines. For purposes of the initial
adjustments that agencies must make by July 1, 2016, the ``cost-of-
living adjustment'' is defined as the percentage increase in the
Consumer Price Index between (1) October of the calendar year during
which the civil penalty amount was established or adjusted under a
provision of law other than the Inflation Adjustment Act and (2)
October 2015. The Consumer Price Index to be used for purposes of this
calculation is the Consumer Price Index for all urban consumers (CPI-U)
published by the Department of Labor.\5\ The Office of Management and
Budget (OMB) has published guidance for implementing this
requirement.\6\ OMB's guidance memorandum provides multipliers that
agencies should use to adjust penalty amounts based on the year the
penalty was established or last adjusted under authority other than the
Inflation Adjustment Act.
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\4\ Inflation Adjustment Act section 5, codified at 28 U.S.C.
2461 note.
\5\ U.S. Dep't of Labor, Bureau of Labor Statistics, CPI Tables,
http://www.bls.gov/cpi/#tables.
\6\ Memorandum from Shaun Donovan, Director, Office of
Management and Budget, to the Heads of Executive Departments and
Agencies (Feb. 24, 2016), https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf.
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To determine the new penalty amount, the agency must apply the
multiplier reflecting the ``cost-of-living adjustment'' \7\ to the
penalty amount as it was most recently established or adjusted under a
provision of law other
[[Page 38570]]
than the Inflation Adjustment Act. The agency must then round that
amount to the nearest dollar.\8\ The increase made by this initial
adjustment may not exceed 150 percent of the penalty amount in effect
on the date the 2015 Act was enacted, November 2, 2015.
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\7\ The multipliers reflecting the ``cost-of-living adjustment''
that OMB provides are rounded to five decimal places. The Bureau has
used the OMB multipliers in calculating its civil penalty
adjustments.
\8\ In rounding to the nearest dollar, the Bureau has rounded
down where the digit immediately following the decimal point is less
than 5 and has rounded up where the digit immediately following the
decimal point is 5 or greater.
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III. Description of the Interim Final Rule
This interim final rule establishes the inflation-adjusted maximum
amounts for each civil penalty within the Bureau's jurisdiction. The
following table lists the civil penalties within the Bureau's
jurisdiction and summarizes the relevant information needed to
calculate the inflation adjustments pursuant to the statutory method.
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Penalty amount Year penalty
as established established or
or last adjusted last adjusted Penalty amount
under a under a in effect on
Law Penalty description provision other provision other November 2,
than the than the 2015
inflation inflation
adjustment act adjustment act
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Consumer Financial Protection Act, Tier 1 penalty....... $5,000 \9\2010 \10\$5,000
12 U.S.C. 5565(c)(2)(A).
Consumer Financial Protection Act, Tier 2 penalty....... 25,000 \11\2010 \12\25,000
12 U.S.C. 5565(c)(2)(B).
Consumer Financial Protection Act, Tier 3 penalty....... 1,000,000 \13\2010 \14\1,000,000
12 U.S.C. 5565(c)(2)(C).
Interstate Land Sales Full Per violation........ 1,000 \15\1989 \16\1,000
Disclosure Act, 15 U.S.C.
1717a(a)(2).
Interstate Land Sales Full Annual cap........... 1,000,000 \17\1989 \18\1,000,000
Disclosure Act, 15 U.S.C.
1717a(a)(2).
Real Estate Settlement Procedures Per failure.......... 50 \19\1990 \20\50
Act, 12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Annual cap........... 100,000 \21\1990 \22\100,000
Act, 12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Per failure, where 100 \23\1990 \24\100
Act, 12 U.S.C. 2609(d)(2)(A). intentional.
SAFE Act, 12 U.S.C. 5113(d)(2)..... Per violation........ 25,000 \25\2008 \26\25,000
Truth in Lending Act, 15 U.S.C. First violation...... 10,000 \27\2010 \28\10,000
1639e(k)(1).
Truth in Lending Act, 15 U.S.C. Subsequent violations 20,000 \29\2010 \30\20,000
1639e(k)(2).
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\9\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, section 1055(c)(2)(A), 124 Stat. 1376, 2030
(2010).
\10\ 12 U.S.C. 5565(c)(2)(A) (2015).
\11\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, section 1055(c)(2)(B), 124 Stat. 1376, 2030
(2010).
\12\ 12 U.S.C. 5565(c)(2)(B) (2015).
\13\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, section 1055(c)(2)(C), 124 Stat. 1376, 2030
(2010).
\14\ 12 U.S.C. 5565(c)(2)(C) (2015).
\15\ Department of Housing and Urban Development Reform Act,
Public Law 101-235, section 111, 103 Stat. 1987, 2014 (1989).
\16\ 15 U.S.C. 1717a(a)(2) (2015).
\17\ Department of Housing and Urban Development Reform Act,
Public Law 101-235, section 111, 103 Stat. 1987, 2014 (1989).
\18\ 15 U.S.C. 1717a(a)(2) (2015).
\19\ Cranston-Gonzalez National Affordable Housing Act, Public
Law 101-625, section 942(a)(2), 104 Stat. 4079, 4412 (1990).
\20\ 12 U.S.C. 2609(d)(1) (2015).
\21\ Cranston-Gonzalez National Affordable Housing Act, Public
Law 101-625, section 942(a)(2), 104 Stat. 4079, 4412 (1990).
\22\ 12 U.S.C. 2609(d)(1) (2015).
\23\ Cranston-Gonzalez National Affordable Housing Act, Public
Law 101-625, section 942(a)(2), 104 Stat. 4079, 4412 (1990).
\24\ 12 U.S.C. 2609(d)(2)(A) (2015).
\25\ Housing and Economic Recovery Act of 2008, Public Law 110-
289, section 1514(d)(2), 122 Stat. 2654, 2823 (2008).
\26\ 12 U.S.C. 5113(d)(2) (2015).
\27\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, section 1472(a), 124 Stat. 1376, 2189 (2010).
\28\ 15 U.S.C. 1639e(k)(1) (2015).
\29\ Dodd-Frank Wall Street Reform and Consumer Protection Act,
Public Law 111-203, section 1472(a), 124 Stat. 1376, 2190 (2010).
\30\ 15 U.S.C. 1639e(k)(2) (2015).
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The Bureau followed the procedure outlined above in part II to
calculate the adjusted civil penalty amounts. In accordance with the
statutory requirements and OMB guidance, the Bureau multiplied each
penalty amount as established or last adjusted under a provision other
than the Inflation Adjustment Act by the OMB multiplier corresponding
to the appropriate year, and then rounded that amount to the nearest
dollar, to calculate the new, inflation-adjusted civil penalty amount.
The Bureau then confirmed that the amount by which each civil penalty
increased did not exceed 150 percent of the corresponding civil penalty
level in effect on November 2, 2015. None of the increases exceeded
this 150-percent threshold. The following chart summarizes the results
of these calculations:
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Penalty amount Year penalty
as established established or
or last adjusted last adjusted OMB ``cost-of-
under a under a living New penalty
Law Penalty description provision other provision other adjustment'' amount
than the than the multiplier
inflation inflation
adjustment act adjustment act
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Consumer Financial Protection Act, 12 U.S.C. Tier 1 penalty.................. $5,000 2010 1.08745 $5,437
5565(c)(2)(A).
Consumer Financial Protection Act, 12 U.S.C. Tier 2 penalty.................. 25,000 2010 1.08745 27,186
5565(c)(2)(B).
[[Page 38571]]
Consumer Financial Protection Act, 12 U.S.C. Tier 3 penalty.................. 1,000,000 2010 1.08745 1,087,450
5565(c)(2)(C).
Interstate Land Sales Full Disclosure Act, 15 Per violation................... 1,000 1989 1.89361 1,894
U.S.C. 1717a(a)(2).
Interstate Land Sales Full Disclosure Act, 15 Annual cap...................... 1,000,000 1989 1.89361 1,893,610
U.S.C. 1717a(a)(2).
Real Estate Settlement Procedures Act, 12 Per failure..................... 50 1990 1.78156 89
U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act, 12 Annual cap...................... 100,000 1990 1.78156 178,156
U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act, 12 Per failure, where intentional.. 100 1990 1.78156 178
U.S.C. 2609(d)(2)(A).
SAFE Act, 12 U.S.C. 5113(d)(2)................ Per violation................... 25,000 2008 1.09819 27,455
Truth in Lending Act, 15 U.S.C. 1639e(k)(1)... First violation................. 10,000 2010 1.08745 10,875
Truth in Lending Act, 15 U.S.C. 1639e(k)(2)... Subsequent violations........... 20,000 2010 1.08745 21,749
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This rule codifies these civil penalty amounts by adding new part
1083 to title 12 of the CFR and new Sec. 1083.1 therein.
IV. Legal Authority and Effective Date
The Bureau issues this rule under the Federal Civil Penalties
Inflation Adjustment Act of 1990,\31\ as amended by the Debt Collection
Improvement Act of 1996,\32\ and further amended by the Federal Civil
Penalties Inflation Adjustment Act Improvements Act of 2015,\33\ which
requires the Bureau to adjust the civil penalties within its
jurisdiction for inflation according to a statutorily prescribed
formula.
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\31\ Public Law 101-410, 104 Stat. 890 (1990).
\32\ Public Law 104-134, section 31001(s)(1), 110 Stat. 1321,
1321-373 (1996).
\33\ Public Law 114-74, section 701, 129 Stat. 584, 599 (2015).
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The Administrative Procedure Act (APA) generally requires an agency
to publish a rule at least 30 days before its effective date.\34\ This
rule satisfies that requirement.
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\34\ See 5 U.S.C. 553(d).
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V. Request for Comment
Although notice and comment rulemaking procedures are not required,
the Bureau invites comments on this notice. Commenters are specifically
encouraged to identify any technical issues raised by the rule.
VI. Regulatory Requirements
Notice and Comment
Under the APA, notice and opportunity for public comment are not
required if the Bureau finds that notice and public comment are
impracticable, unnecessary, or contrary to the public interest.\35\
This interim final rule adjusts the civil penalty amounts within the
Bureau's jurisdiction for inflation, as required by the Federal Civil
Penalties Inflation Adjustment Act of 1990, as amended by the Debt
Collection Improvement Act of 1996 and further amended by the Federal
Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The
amendments in this interim final rule are technical, and they merely
apply the statutory method for adjusting civil penalty amounts. For
these reasons, the Bureau has determined that publishing a notice of
proposed rulemaking and providing opportunity for public comment are
unnecessary. Moreover, the statute expressly requires the Bureau to
make these initial adjustments through an interim final rulemaking to
be published by July 1, 2016,\36\ and OMB's guidance confirms that
agencies need not complete a notice-and-comment process before
promulgating the rule.\37\ Therefore, the amendments are adopted in
final form.
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\35\ 5 U.S.C. 553(b)(B).
\36\ Inflation Adjustment Act, section 4(b)(1)(A), codified at
28 U.S.C. 2461 note.
\37\ Memorandum from Shaun Donovan, Director, Office of
Management and Budget, to the Heads of Executive Departments and
Agencies 3 (Feb. 24, 2016), https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf.
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Regulatory Flexibility Act
Because no notice of proposed rulemaking is required, the
Regulatory Flexibility Act does not require an initial or final
regulatory flexibility analysis.\38\
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\38\ 5 U.S.C. 603(a), 604(a).
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Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995,\39\ the
Bureau reviewed this interim final rule. No collections of information
pursuant to the Paperwork Reduction Act are contained in the interim
final rule.
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\39\ 44 U.S.C. 3506; 5 CFR 1320.
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List of Subjects in 12 CFR Part 1083
Administrative practice and procedure, Consumer protection,
Penalties.
Authority and Issuance
For the reasons set forth in the preamble, the Bureau adds part
1083 to chapter X in title 12 of the Code of Federal Regulations to
read as set forth below:
PART 1083--CIVIL PENALTY ADJUSTMENTS
Sec.
1083.1 Adjustments of civil penalty amounts.
Authority: 12 U.S.C. 2609(d); 12 U.S.C. 5113(d)(2); 12 U.S.C.
5565(c); 15 U.S.C. 1639e(k); 15 U.S.C. 1717a(a); 28 U.S.C. 2461
note.
Sec. 1083.1 Adjustments of civil penalty amounts.
(a) The maximum amount of each civil penalty within the
jurisdiction of the Consumer Financial Protection Bureau to impose is
adjusted in accordance with the Federal Civil Penalties Inflation
Adjustment Act of 1990, as amended by the Debt Collection Improvement
Act of 1996 and further amended by the Federal
[[Page 38572]]
Civil Penalties Inflation Adjustment Act Improvements Act of 2015, (28
U.S.C. 2461 note) as follows:
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Adjusted maximum
U.S. code citation Civil penalty civil penalty
description amount
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12 U.S.C. 5565(c)(2)(A)....... Tier 1 penalty....... $5,437
12 U.S.C. 5565(c)(2)(B)....... Tier 2 penalty....... 27,186
12 U.S.C. 5565(c)(2)(C)....... Tier 3 penalty....... 1,087,450
15 U.S.C. 1717a(a)(2)......... Per violation........ 1,894
15 U.S.C. 1717a(a)(2)......... Annual cap........... 1,893,610
12 U.S.C. 2609(d)(1).......... Per failure.......... 89
12 U.S.C. 2609(d)(1).......... Annual cap........... 178,156
12 U.S.C. 2609(d)(2)(A)....... Per failure, where 178
intentional.
12 U.S.C. 5113(d)(2).......... Per violation........ 27,455
15 U.S.C. 1639e(k)(1)......... First violation...... 10,875
15 U.S.C. 1639e(k)(2)......... Subsequent violations 21,749
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(b) The adjustments in paragraph (a) of this section shall apply to
civil penalties assessed after July 14, 2016, regardless of when the
violation for which the penalty is assessed occurred.
Dated: June 7, 2016.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2016-14031 Filed 6-13-16; 8:45 am]
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