[Federal Register Volume 69, Number 184 (Thursday, September 23, 2004)]
[Rules and Regulations]
[Pages 56929-56930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-21362]


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FEDERAL RESERVE SYSTEM

12 CFR Part 263

[Docket No. OP-1211]


Rules of Practice for Hearings

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

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SUMMARY: The Board of Governors of the Federal Reserve System (the 
Board) is amending its rules of practice and procedure to adjust the 
maximum amount, as set by statute, of each civil money penalty (CMP) 
within its jurisdiction to account for inflation. This action is 
required under the Federal Civil Penalties Inflation Adjustment Act of 
1990, as amended by the Debt Collection Improvement Act of 1996.

EFFECTIVE DATE: October 12, 2004.

FOR FURTHER INFORMATION CONTACT: Katherine H. Wheatley, Assistant 
General Counsel (202/452-3779), or Katrina P. Sukduang, Senior Attorney 
(202/452-3351), Legal Division, Board of Governors of the Federal 
Reserve System, 20th and C Streets, NW., Washington, DC 20551. For 
users of Telecommunication Device for the Deaf (TDD) only, contact 202/
263-4869.

SUPPLEMENTARY INFORMATION: The Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended by the Debt Collection Improvement 
Act of 1996, 28 U.S.C. 2461 note (FCPIA Act), requires each Federal 
agency to adjust each CMP within its jurisdiction by a prescribed cost-
of-living adjustment at least once every four years. This cost-of-
living adjustment is based on the formula described in section 5(b) of 
the FCPIA Act. The Board made its last adjustment in October 2000 (see 
65 FR 60583).
    The required cost-of-living adjustment formula is based on the 
difference between the Consumer Price Index (CPI) for June of the year 
preceding the adjustment (in this case, June 2003) and the CPI for June 
of the year when the CMP was last set or adjusted. To calculate the 
adjustment, the Board used the Department of Labor, Bureau of Labor 
Statistics--All Urban Consumers tables, in which the period 1982-84 was 
equal to 100, to get the CPI values.
    The calculations performed for the 2004 adjustment consisted of 
three categories, depending on the year in which the penalty was last 
set or adjusted. For penalties that changed in 2000, the relevant CPIs 
were June 2003 (183.7) and June 2000 (172.4), resulting in a CPI 
increase of 6.6 percent. For

[[Page 56930]]

penalties that were last changed in 1996, the relevant CPIs were June 
2003 (183.7) and June 1996 (156.7), resulting in a CPI increase of 17.2 
percent. Finally, for the one penalty that had not changed since its 
establishment in 1994, the relevant CPIs were June 2003 (183.7) and 
June 1994 (148.0), resulting in a CPI increase of 24.1 percent.
    Section 5 of the FCPIA Act provides that the adjustment amount must 
be rounded before adding it to the existing penalty amount. The 
rounding provision depends on the size of the penalty being adjusted. 
For example, if the penalty is greater than $100 but less than or equal 
to $1,000, the increase is rounded to the nearest $100; if it is 
greater than $1,000 but less than or equal to $10,000, the increase is 
rounded to the nearest $1,000. Because of this rounding rule, five 
penalty amounts are not changing at this time. For example, the penalty 
under 12 U.S.C. 3909(d) prior to the 2004 adjustment was $1,100. As 
this penalty was last changed in 1996, the 17.2 percent adjustment 
would be $189. Rounding that increase to the nearest $1,000 results in 
an increase of $0. The penalties that are not adjusted at this time 
because of this rounding formula will be adjusted at the next 
adjustment cycle to take account of the entire period between the time 
of their last adjustment (either 1996 or 2000) and the next adjustment 
date. These unadjusted penalties include the inadvertently late or 
misleading reports under 12 U.S.C. 324; 12 U.S.C. 1832(c); Tier I 
penalty of 12 U.S.C. 1847(d), 3110(c); 12 U.S.C. 334, 374a, 1884; and 
12 U.S.C. 3909(d).
    Because the statute also prohibits initial increases that exceed 10 
percent, the penalty for 42 U.S.C. 4012a(f)(5) will increase to only 
$385 in 2004. This penalty was initially set at $350 in 1994, and did 
not change in either the 1996 or 2000 adjustments. Accordingly, the 
24.1 percent CPI increase from 1994 results in $84, which is rounded to 
$100 pursuant to the rounding rules. As that increase would exceed 10 
percent, the penalty was adjusted to $385.
    In accordance with section 6 of the FCPIA Act, the increased 
penalties set forth in this amendment apply only to violations that 
occur after the date the increase takes effect.

Public Comment Not Required

    This rule is not subject to the provisions of 5 U.S.C. 553 
requiring notice, public participation, and deferred effective date. 
The FCPIA Act provides Federal agencies with no discretion in the 
adjustment of CMPs to the rate of inflation, and it also requires that 
adjustments be made at least every four years. Moreover, this 
regulation is ministerial and technical. For these reasons, the Board 
finds good cause to determine that public notice and comment for this 
new regulation is unnecessary, impractical, and contrary to the public 
interest, pursuant to the Administrative Procedure Act (APA), 5 U.S.C. 
553(b)(3)(B). These same reasons also provide the Board with good cause 
to adopt an effective date for this regulation that is less than 30 
days after the date of publication in the Federal Register, pursuant to 
the APA, 5 U.S.C. 553(d).

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 Board 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.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Ch. 35; 5 CFR part 1320 Appendix A.1), the Board reviewed the final 
rule under the authority delegated to the Board by the Office of 
Management and Budget. No collections of information pursuant to the 
Paperwork Reduction Act are contained in the final rule.

List of Subjects in 12 CFR Part 263

    Administrative practice and procedure, Claims, Crime, Equal Access 
to Justice, Lawyers, Penalties.

Authority and Issuance

0
For the reasons set forth in the preamble, the Board of Governors 
amends 12 CFR part 263 as follows:

PART 263--RULES OF PRACTICE FOR HEARINGS

0
1. The authority citation for part 263 continues to read as follows:

    Authority: 5 U.S.C. 504; 12 U.S.C. 248, 324, 504, 505, 1817(j), 
1818, 1828(c), 1831o, 1831p-1, 1847(b), 1847(d), 1884(b), 
1972(2)(F), 3105, 3107, 3108, 3907, 3909; 15 U.S.C. 21, 78o-4, 78o-
5, 78u-2; and 28 U.S.C. 2461 note.


0
2. Section 263.65 is revised to read as follows:


263.65  Civil penalty inflation adjustments

    (a) Inflation adjustments. In accordance with the Federal Civil 
Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note), the 
Board has set forth in paragraph (b) of this section adjusted maximum 
penalty amounts for each civil money penalty provided by law within its 
jurisdiction. The adjusted civil penalty amounts provided in paragraph 
(b) of this section replace only the amounts published in the statutes 
authorizing the assessment of penalties and the previously-adjusted 
amounts adopted as of October 12, 2000 and October 24, 1996. The 
authorizing statutes contain the complete provisions under which the 
Board may seek a civil money penalty. The increased penalty amounts 
apply only to violations occurring after the effective date of this 
rule.
    (b) Maximum civil money penalties. The maximum civil money 
penalties as set forth in the referenced statutory sections are as 
follows:

(1) 12 U.S.C. 324:
    (i) Inadvertently late or misleading reports, inter alia--$2,200.
    (ii) Other late or misleading reports, inter alia--$27,000.
    (iii) Knowingly or recklessly false or misleading reports, inter 
alia--$1,250,000.
(2) 12 U.S.C. 504, 505, 1817(j)(16), 1818(i)(2) and 1972(2)(F):
    (i) First tier--$6,500.
    (ii) Second tier--$32,500.
    (iii) Third tier--$1,250,000.
(3) 12 U.S.C. 1832(c)--$1,100.
(4) 12 U.S.C. 1847(b), 3110(a)--$32,500.
(5) 12 U.S.C. 1847(d), 3110(c):
    (i) First tier--$2,200.
    (ii) Second tier--$27,000.
    (iii) Third tier--$1,250,000.
(6) 12 U.S.C. 334, 374a, 1884--$110.
(7) 12 U.S.C. 3909(d)--$1,100.
(8) 15 U.S.C. 78u-2:
    (i) 15 U.S.C. 78u-2(b)(1)--$6,500 for a natural person and $65,000 
for any other person.
    (ii) 15 U.S.C. 78u-2(b)(2)--$65,000 for a natural person and 
$325,000 for any other person.
    (iii) 15 U.S.C. 78u-2(b)(3)--$130,000 for a natural person and 
$625,000 for any other person.
(9) 42 U.S.C. 4012a(f)(5):
    (i) For each violation--$385.
    (ii) For the total amount of penalties assessed under 42 U.S.C 
4012a(f)(5) against an institution or enterprise during any calendar 
year--$125,000.

    Dated: September 20, 2004.

    By order of the Board of Governors of the Federal Reserve 
System.
Jennifer J. Johnson,
Secretary of the Board.
[FR Doc. 04-21362 Filed 9-22-04; 8:45 am]
BILLING CODE 6210-01-P