[Federal Register Volume 69, Number 200 (Monday, October 18, 2004)]
[Rules and Regulations]
[Pages 61301-61305]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-23242]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 69, No. 200 / Monday, October 18, 2004 / 
Rules and Regulations

[[Page 61301]]



FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 308

RIN 3064-AC76


Rules of Practice and Procedure

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Final rule; correction.

-----------------------------------------------------------------------

SUMMARY: The Federal Civil Monetary Penalties Inflation Adjustment Act 
of 1990, as amended, requires all Federal agencies with statutory 
authority to impose civil money penalties (CMPs) to evaluate and adjust 
those CMPs every four years. The Federal Deposit Insurance Corporation 
((FDIC) last adjusted the maximum amounts of CMPs under its 
jurisdiction in 2000. The FDIC is issuing this final rule to implement 
the required adjustments to its CMPs. The FDIC is also correcting a 
technical error as to one CMP that occurred when the FDIC last adjusted 
CMPs in 2000.

DATES: This rule is effective on December 31, 2004.

FOR FURTHER INFORMATION CONTACT: Philip P. Houle, Counsel, (202) 898-
3722, Enforcement Unit, Legal Division, 550 17th Street, NW., 
Washington, DC 20429.

SUPPLEMENTARY INFORMATION

I. Background

    The Debt Collection Improvement Act of 1996 (DCIA) amended section 
4 of the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Inflation Adjustment Act) (28 U.S.C. 2461 note), to require the head 
of each Federal agency to enact regulations within 180 days of the 
enactment of the DCIA and at least once every four years thereafter, to 
adjust each CMP provided by law within the jurisdiction of the agency 
(with the exception of certain specifically listed statutes) by the 
inflation adjustment formula set forth in section 5(b) of the Inflation 
Adjustment Act.
    To satisfy the requirements of the DCIA, the FDIC is amending 12 
CFR 308 of its regulations pertaining to its Rules of Practice and 
Procedure which address CMPs. The amount of each CMP which the FDIC has 
jurisdiction to impose has been increased according to the prescribed 
formula. The penalties were last adjusted in 2000 (65 FR 64887). Any 
increase in penalty amounts under the DCIA shall apply only to 
violations which occur after the effective date of the increase.
    The FDIC is also implementing a technical correction of the maximum 
amount of tier three CMPs that may be assessed for violation of 12 
U.S.C. 1817(c) involving the submission of certified statements to the 
FDIC for determining institutions' semiannual deposit insurance 
assessments. Although the FDIC had stated in the preamble to the 2000 
final rule that the CMP was to be adjusted from $1,100,000 to 
$1,175,000, the CMP was not actually adjusted due to a technical error 
in the publication of the final rule (65 FR 64887). Under their own 
rulemaking, other Federal banking agencies did successfully adjust this 
CMP from $1,100,000 to $1,175,000 in 2000.
    If the $1,100,000 CMP were now adjusted using the 17.2% CPI figure 
for the June 1996 to June 2003 period (as with those CMPs that were 
last adjusted to a higher amount in 1996), this CMP's maximum amount 
would be increased to $1,300,000 rather than to the lower $1,250,000 
amount that is actually adopted in this final rule and correction. In 
the interests of fairness to respondents and consistency with other 
Federal banking agencies, the FDIC is making a technical correction 
that increases the $1,100,000 CMP to $1,175,000 for the June 1996 to 
June 1999 period and also adjusts the corrected CMP from $1,175,000 to 
$1,250,000 for the June 2000 to June 2003 period.
    The correction and the adjustments are being made simultaneously 
and prospectively. This rulemaking shall become a final rule on 
publication in the Federal Register and shall be effective as of 
December 31, 2004.

Summary of Calculation

    The Inflation Adjustment Act requires that each CMP amount be 
increased by the ``cost of living'' adjustment, which is defined as the 
percentage by which the Consumer Price Index (CPI-U)\1\ for the month 
of June of the calendar year preceding the adjustment exceeds the CPI 
for the month of June of the calendar year in which the amount of the 
CMP was last set or adjusted pursuant to law. Any increase is to be 
rounded to the nearest multiple of: (A) $10 in the case of penalties 
less than or equal to $100; (B) $100 in the case of penalties greater 
than $100 but less than or equal to $1,000; (C) $1,000 in the case of 
penalties greater than $1,000 but less than or equal to $10,000; (D) 
$5,000 in the case of penalties greater than $10,000 but less than or 
equal to $100,000; (E) $10,000 in the case of penalties greater than 
$100,000 but less than or equal to $200,000; and (F) $25,000 in the 
case of penalties greater than $200,000.
---------------------------------------------------------------------------

    \1\ The CPI-U is compiled by the Bureau of Statistics of the 
Department of Labor. To calculate the adjustment, the FDIC used the 
Department of Labor, Bureau of Labor Statistics B All Urban 
Consumers tables to arrive at the CPI-U value.
---------------------------------------------------------------------------

    Under the DCIA, the first adjustment may not exceed ten percent of 
the current penalty amount.\2\
---------------------------------------------------------------------------

    \2\ For penalties that were increased in 1996 but were not 
increased at the last quadrennial adjustment in 2000, the relevant 
computation is the CPI-U for June 1996 (156.7) and the CPI-U for 
June 2003, which produces a 17.2% adjustment. If a penalty has never 
previously been adjusted (as is the case with the single-violation 
penalty under 42 U.S.C. 4012a(f)), the maximum increase for a first-
time adjustment is 10% under 28 U.S.C 2461 note, rather than the 
24.1% increase in the CPI-U for the intervening period.
---------------------------------------------------------------------------

Example

    The following example explains the inflation adjustment calculation 
for CMP amounts that were last adjusted in 2000. Under 12 U.S.C. 
1818(i), as adjusted at 12 CFR 308.132(c), the FDIC may impose a daily 
maximum Tier Three CMP not to exceed $1,175,000 for violating certain 
laws.
    First, the appropriate CPI-U is determined. The statute requires 
the FDIC to use the CPI-U for June of the calendar year preceding the 
year of adjustment. Since the FDIC is adjusting the CMP in 2004, the 
CPI-U for June 2003, which was 183.7, is used. The statute also 
requires the FDIC to use the CPI-U for June of the year that the CMP

[[Page 61302]]

was last set by law or adjusted for inflation. Because the FDIC last 
adjusted the CMP in 2000, the CPI-U for June 2000, which was 172.4, is 
used.
    Next, the cost of living adjustment or inflation factor is then 
calculated by dividing the CPI-U for June 2003 (183.7) by the CPI-U for 
June 2000 (172.4). The result is 1.066 (i.e., a 6.6 percent increase).
    Third, the raw inflation adjustment is calculated by multiplying 
the maximum CMP amount by the percentage increase. In this example, 
$1,175,000 is multiplied by 6.6 percent, which equals $77,550.
    Fourth, the raw inflation adjusted amount is rounded according to 
the rounding rules in section 5(a) of the Inflation Adjustment Act. 
Under the rounding rules, if the penalty is greater than $200,000, the 
increase is rounded to the nearest multiple of $25,000. Therefore, the 
maximum penalty increase in this example is $75,000 (i.e., $77,500 
rounded to the nearest multiple of $25,000).
    Fifth, the rounded increase is added to the current maximum CMP 
amount that is being adjusted. In this example, $1,175,000 plus $75,000 
yields a new maximum inflation adjusted CMP amount of $1,250,000.

Summary of Adjustments

    Under the Federal Civil Penalties Inflation Adjustment Act of 1990 
(28 U.S.C. 2461 note), the FDIC must adjust for inflation the civil 
monetary penalties in statutes under which it has authority to assess 
penalties. The following chart displays the adjusted civil money 
penalty amounts for the enumerated statutes. The amounts in this chart 
apply to violations that occur after December 31, 2004:

------------------------------------------------------------------------
                                 Current maximum
     U.S. Code Citation              amount          New maximum amount
------------------------------------------------------------------------
12 U.S.C. 1817(a)
    Tier One CMP............                 2,200                 2,200
    Tier Two CMP............                22,000                27,000
    Tier Three CMP..........             1,175,000             1,250,000
12 U.S.C. 1817(c)
    Tier One CMP............                 2,200                 2,200
    Tier Two CMP............                22,000                27,000
    Tier Three CMP..........         \3\ 1,175,000             1,250,000
12 U.S.C. 1817(j)
    Tier One CMP............                 5,500                 6,500
    Tier Two CMP............                27,500                32,500
    Tier Three CMP..........             1,175,000             1,250,000
12 U.S.C. 1818(i)(2)
    Tier One CMP............                 5,500                 6,500
    Tier Two CMP............                27,500                32,500
    Tier Three CMP..........             1,175,000             1,250,000
12 U.S.C. 1820(e)(4)........                 5,500                 6,500
12 U.S.C. 1828(a)(3)........                   110                   110
12 U.S.C. 1828(h)...........                   110                   110
12 U.S.C. 1829b(j)..........                11,000                11,000
12 U.S.C. Sec.   1832(c)....                 1,100                 1,100
12 U.S.C. 1884..............                   110                   110
12 U.S.C. 1972(2)(F)
    Tier One CMP............                 5,500                 6,500
    Tier Two CMP............                27,500                32,500
    Tier Three CMP..........             1,175,000             1,250,000
12 U.S.C. 3108(b)
    Tier One CMP............                 5,500                 6,500
    Tier Two CMP............                27,500                32,500
    Tier Three CMP..........             1,175,000             1,250,000
12 U.S.C. 3349(b)
    Tier One CMP............                 5,500                 6,500
    Tier Two CMP............                27,500                32,500
    Tier Three CMP..........             1,175,000             1,250,000
12 U.S.C. 3909(d)...........                 1,100                 1,100
12 U.S.C. 4717(b)
    Tier One CMP............                 5,500                 6,500
    Tier Two CMP............                27,500                32,500
    Tier Three CMP..........             1,175,000             1,250,000
15 U.S.C. 78u-2
    Tier One CMP                             5,500                 6,500
     (individuals)..........
    Tier One CMP (others)...                60,000                65,000
    Tier Two CMP                            60,000                65,000
     (individuals)..........
    Tier Two CMP (others)...               300,000               325,000
    Tier Three CMP                         120,000               130,000
     (individuals)..........
    Tier Three penalty                     575,000               625,000
     (others)...............
31 U.S.C. 3802..............                 5,500                 6,500
42 U.S.C. 4012a(f)
    Maximum CMP per                            350                   385
     violation..............
    Maximum CMPs per year...               115,000              125,000
------------------------------------------------------------------------
\3\ As noted, the FDIC is simultaneously and prospectively; (A)
  Correcting the technical error that occurred in 2000 when this CMP was
  not actually adjusted, by now increasing the CMP from a maximum of
  $1,100,000 to $1,175,000 for the June 1996 to June 1999 period and (B)
  adjusting the CMP the maximum from $1,175,000 to $1,250,000 for the
  June 2000 to June 2003 period.


[[Page 61303]]

II. Section-by-Section Analysis

Section 308.116(b)

    Section 308.116(b) pertains to the amount of any CMP that may be 
assessed for violations of the Change in Bank Control Act of 1978 (12 
U.S.C. 1817(j)). This section has been amended by increasing the: (A) 
Tier One CMP amount from $5,500 for each day the violation continues to 
$6,500 for each day that the violation continues; (B) Tier Two CMP 
amount from $27,500 for each day that the violation continues to 
$32,500 for each day that the violation continues; and (C) Tier Three 
CMP amount from $1,175,000 to $1,250,000 for each day that the 
violation continues or, in the case of a depository institution, 
increasing the CMP from an amount not to exceed the lesser of 
$1,250,000 or one percent of the total assets of the institution for 
each day that the violation continues. Section 308.116(b)(4) has also 
been amended by revising the date after which the adjusted CMPs will 
apply to violations covered by Sec.  308.116 by deleting ``November 12, 
1996'' and replacing it with ``December 31, 2004.''

Section 308.132

    Section 308.132 pertains to the manner in which the FDIC assesses 
CMPs. Paragraph (c)(2) of that section pertains to the CMPs imposed 
pursuant to section 7(a) of the Federal Deposit Insurance Act (FDIA) 
(12 U.S.C. 1817(a)) for the late filing of a bank's Reports of 
Condition and Income (Call Reports) or for the submission of false or 
misleading Call Reports or information. With respect to late filings, 
paragraph (c)(2)(ii) of Sec.  308.132 has been amended to reflect the 
increase in the Tier Two CMP amount from a maximum of $22,000 per day 
to $27,000 per day for each day the failure to file continues. No 
change has been made to the Tier One CMP. Paragraph (c)(2)(ii) of Sec.  
308.132 has also been amended by revising the date after which the 
adjusted CMPs will apply to violations covered by that paragraph by 
deleting ``November 12, 1996'' and replacing it with ``December 31, 
2004.''
    Paragraph (c)(2)(iii) of Sec.  308.132 pertains to CMPs for the 
submission of false or misleading Call Reports or information. 
Paragraph (c)(2)(iii)(B) of that section has been amended to reflect 
the increase in Tier Two CMP amounts from a maximum of $22,000 per day 
for each day that the information is not corrected to a maximum of 
$27,000 per day for each day that the information is not corrected. 
Paragraph (c)(2)(iii)(C) of that section reflects the increase in Tier 
Three CMPs from an amount not to exceed the lesser of $1,175,000 or one 
percent of the total assets of the institution for each day the 
information is not corrected to an amount not to exceed the lesser of 
$1,250,000 or one percent of the total assets of such institution for 
each day the information is not corrected. No change has been made to 
the Tier One CMP amount. Paragraphs (c)(2)(iii)(B) and (C) have also 
been amended by revising the date after which the adjusted CMPs will 
apply to violations covered by paragraph (c)(2)(iii) by deleting 
``November 12, 1996'' in both paragraphs and replacing it in both 
paragraphs with ``December 31, 2004.''
    Paragraph (c)(3)(i) of Sec.  308.132 sets forth the increases for 
CMPs assessed pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 
1818(i)(2)). A Tier One CMP will increase from a maximum of $5,500 per 
day to a maximum of $6,500 per day for each day that the violation 
continues. A Tier Two CMP will increase from a maximum of $27,500 per 
day to a maximum of $32,500 per day for each day that the violation, 
practice, or breach of fiduciary duty continues. A Tier Three CMP will 
increase from an amount not to exceed, in the case of any person other 
than an insured depository institution, $1,175,000 to a maximum of 
$1,250,000 or, in the case of any insured depository institution, the 
amount will increase from a maximum of $1,175,000 to $1,250,000 or an 
amount not to exceed the lesser of $1,250,000 or one percent of the 
total assets of such institution for each day during which the 
violation, practice, or breach continues.
    Paragraph (c)(3)(i)(A) of Sec.  308.132 lists a number of statutes 
which grant jurisdiction to the FDIC to assess CMPs under section 
8(i)(2) of the FDIA for violation thereof, including the Home Mortgage 
Disclosure Act (12 U.S.C. 2804 et seq. and 12 CFR 203.6), the Expedited 
Funds Availability Act (12 U.S.C. 4001 et seq.), the Truth in Savings 
Act (12 U.S.C. 4301 et seq.), the Real Estate Settlement Procedures Act 
(12 U.S.C. 2601 et seq. and 12 CFR 3500), the Truth in Lending Act (15 
U.S.C. 1601 et seq.), the Fair Credit Reporting Act (15 U.S.C. 1681 et 
seq.), the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.), the 
Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.), the 
Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.), and the Fair 
Housing Act (42 U.S.C. 3601 et seq.). Increases in the amount of any 
CMP which the FDIC may assess for violation of those statutes are the 
same as the increases for CMPs under section 8(i)(2) of the FDIA (12 
U.S.C. 1818(i)(2)) cited above. As in section 8(i)(2) of the FDIA, Tier 
One, Tier Two, and Tier Three CMP amounts will increase accordingly.
    Paragraph (c)(3)(ii) of Sec.  308.132 reflects the increases in CMP 
amounts that may be assessed pursuant to section 7(c) of the FDIA (12 
U.S.C. 1817(c)) for late filing or the submission of false or 
misleading certified statements. A Tier Two CMP pursuant to section 
7(c)(4)(B) of the FDIA (12 U.S.C. 1817(c)(4)(B)) will increase from an 
amount not to exceed $22,000 per day to an amount not to exceed $27,000 
for each day during which the failure to file continues or the false or 
misleading information is not corrected. As noted above, a Tier Three 
CMP which may be assessed pursuant to section 7(c)(4)(C) of the FDIA 
(12 U.S.C. 1817(c)(4)(B)) will be corrected for the June 1996 to June 
1999 period from an amount not to exceed the lesser of $1,100,000 or 
one percent of the total assets of the institution for each day during 
which the failure to file continues or the false or misleading 
information is not corrected to an amount not to exceed the lesser of 
$1,175,000 or one percent of the total assets of the institution for 
each day during which the failure to file continues or the false or 
misleading information is not corrected. Also, a Tier Three CMP which 
may be assessed pursuant to section 7(c)(4)(C) of the FDIA (12 U.S.C. 
1817(c)(4)(B)) will be adjusted for the June 2000 to June 2003 period 
by increasing it from an amount not to exceed the lesser of $1,175,000 
or one percent of the total assets of the institution for each day 
during which the failure to file continues or the false or misleading 
information is not corrected to an amount not to exceed the lesser of 
$1,250,000 or one percent of the total assets of the institution for 
each day during which the failure to file continues or the false or 
misleading information is not corrected. No change has been made to the 
Tier One CMP amount.
    Paragraph (c)(3)(iii) of Sec.  308.132 sets forth the increases in 
the CMP amounts that may be assessed pursuant to section 10(e)(4) of 
the FDIA (12 U.S.C. 1820(e)(4)) for refusal to allow an examination or 
to provide required information during an examination. The maximum CMP 
amount will increase from $5,500 to $6,500.
    Paragraph (c)(3)(ix) of Sec.  308.132 sets forth the increases in 
the CMP amounts that may be assessed pursuant to the Bank Holding 
Company Act of 1970 for prohibited tying arrangements. A Tier One CMP 
which may be assessed pursuant to 12 U.S.C. 1972(2)(F)(i) will increase 
from a maximum of $5,500 to a maximum of $6,500. A Tier Two CMP which 
may be assessed under 12 U.S.C.

[[Page 61304]]

1972(2)(F)(ii) will increase from a maximum of $27,500 to a maximum of 
$32,500. A Tier Three CMP which may be assessed pursuant to 12 U.S.C. 
1972(2)(F)(iii) will increase from an amount not to exceed, in the case 
of any person other than an insured depository institution $1,175,000 
for each day during which the violation, practice, or breach continues 
to an amount not to exceed $1,250,000 for each day during which the 
violation, practice, or breach continues. In the case of any insured 
depository institution, a Tier Three CMP will increase from an amount 
not to exceed the lesser of $1,175,000 or one percent of the total 
assets of such institution for each day during which the violation, 
practice, or breach continues to an amount not to exceed the lesser of 
$1,250,000 or one percent of the total assets of such institution for 
each day during which the violation, practice, or breach continues.
    Paragraph (c)(3)(x) of Sec.  308.132 pertains to the assessment of 
CMPs under the International Banking Act of 1978 (IBA) (12 U.S.C. 
3108(b)), for failure to comply with the requirements of the IBA, 
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)). The 
amount of these CMPs will increase in the amounts set forth in 
paragraph (c)(3)(i) of Sec.  308.132 which contains the increases for 
section 8(i)(2) of the FDIA.
    Paragraph (c)(3)(xi) of Sec.  308.132 sets forth the increase in 
CMP amounts that may be assessed pursuant to section 8(i)(2) of the 
FDIA (12 U.S.C. 1818(i)(2)), as made applicable by 12 U.S.C. 3349(b), 
where a financial institution seeks, obtains, or gives any other thing 
of value in exchange for the performance of an appraisal by a person 
that the institution knows is not a state certified or licensed 
appraiser in connection with a federally-related transaction. Such CMP 
amounts will increase in the amounts set forth in paragraph (c)(3)(i) 
of Sec.  308.132 which contains the increases for section 8(i)(2) of 
the FDIA.
    Paragraph (c)(3)(xiii) of Sec.  308.132 states that pursuant to the 
Community Development Banking and Financial Institution Act (CDBA) (12 
U.S.C. 4717(b)) a CMP may be assessed for violation of the CDBA 
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)). Such 
CMP amounts will increase in the amounts set forth in paragraph 
(c)(3)(i) of Sec.  308.132 which contains the increases for section 
8(i)(2) of the FDIA.
    Paragraph (c)(3)(xiv) of Sec.  308.132 states that pursuant to 
section 21B of the Securities Exchange Act of 1934 (Exchange Act) (15 
U.S.C. 78u-2), CMPs may be assessed for violations of certain 
provisions of the Exchange Act, where such penalties are in the public 
interest. The Tier One CMP amounts which may be assessed pursuant to 15 
U.S.C. 78u-2(b)(1) will increase from an amount not to exceed $5,500 
for a natural person or $60,000 for any other person for violations set 
forth in 15 U.S.C. 78u-2(a), to $6,500 for a natural person or $65,000 
for any other person. The Tier Two CMP which may be assessed pursuant 
to 15 U.S.C. 78u-2(b)(2) for each violation set forth in 15 U.S.C. 78u-
2(a) will increase from an amount not to exceed $60,000 for a natural 
person to $300,000 for any other person to an amount not to exceed 
$65,000 for a natural person or $325,000 for any other person if the 
act or omission involved fraud, deceit, manipulation, or deliberate or 
reckless disregard of a regulatory requirement. The Tier Three CMP 
which may be assessed pursuant to 15 U.S.C. 78u-2(b)(3) for each 
violation set forth in 15 U.S.C. 78u-2(a), in an amount not to exceed 
$120,000 for a natural person or $575,000 for any other person, if the 
act or omission involved fraud, deceit, manipulation, or deliberate or 
reckless disregard of a regulatory requirement, and such act or 
omission directly or indirectly resulted in substantial losses, or 
created a significant risk of substantial losses to other persons or 
resulted in substantial pecuniary gain to the person who committed the 
act or omission, will be increased to an amount not to exceed $130,000 
for a natural person or $625,000 for any other person.
    Paragraph (c)(3)(xv) of Sec.  308.132 states that a CMP may be 
assessed for violation of the Program Fraud Civil Remedies Act (31 
U.S.C. 3802) for violations involving false claims and statements. The 
maximum CMP amount will increase from $5,500 to $6,500. Paragraph 
(c)(3)(xvi) of Sec.  308.132 states that CMPs may be assessed pursuant 
to the Flood Disaster Protection Act (FDPA)(42 U.S.C. 4012a(f)) against 
any regulated lending institution that engages in a pattern or practice 
of violations of the FDPA. The amount of the maximum penalty for each 
violation will increase from an amount not to exceed $350 to an amount 
not to exceed $385. The maximum amount of CMPs which may be assessed 
annually against a regulated lending institution will increase from an 
amount not to exceed a total of $115,000 to an amount not to exceed a 
total of $125,000.
    Paragraph (c)(3) of Sec.  308.132 has also been amended by revising 
the date after which the adjusted CMPs will apply to violations covered 
by that paragraph by deleting ``November 12, 1996'' and replacing it 
with ``December 31, 2004.''

III. Exemption From Public Notice and Comment

    The law requires the FDIC to amend its rules, provides the specific 
adjustments to be made and leaves the FDIC no discretion in calculating 
the amount of those adjustments, the changes are ministerial, 
technical, and noncontroversial. The FDIC has thus determined for good 
cause that public notice and comment is unnecessary and impracticable 
under the Administrative Procedure Act (5 U.S.C. 553(b)(3)(B)), and 
that the rule should be published in the Federal Register as a final 
rule.

IV. Effective Date

    For the same reasons that the FDIC for good cause has determined 
that public notice and comment is unnecessary and impractical, the FDIC 
also finds that it has good cause to adopt an effective date that would 
be less than 30 days after the date of publication in the Federal 
Register pursuant to the APA (5 U.S.C. 553(d)). In the interest of 
fairness, however, the increase in the maximum amount of civil money 
penalties in this regulation applies only to violations that occur 
after December 31, 2004, rather than to violations that occurred after 
the date of publication of this rule in the Federal Register. Moreover, 
section 302 of the Riegle Community Development and Regulatory 
Improvement Act of 1994 (12 U.S.C. 4802) states that a final rule 
imposing new requirements must take effect on the first day of a 
calendar quarter following its publication. That section provides, 
however, that an agency may determine that the rule should take effect 
earlier upon a finding of good cause.
    The FDIC also finds that the increase in the maximum amounts of 
CMPs under the FDIC's jurisdiction should be effective as of December 
31, 2004 since the rule is ministerial, technical, and 
noncontroversial. Under the statute, agencies must make the required 
CMP inflation adjustments: (A) According to the formula in the statute 
and (B) within four years of the last inflation adjustment. Federal 
agencies have no discretion as to the amount or timing of the 
adjustment.

V. Regulatory Flexibility Act

    An initial regulatory flexibility analysis under the Regulatory 
Flexibility Act (RFA) (5 U.S.C. 603) is required only when an agency 
must publish a general notice of proposed rulemaking. As already noted, 
the FDIC has determined that publication of a notice of proposed 
rulemaking is not necessary for this final rule. Accordingly, the RFA 
does not require

[[Page 61305]]

an initial regulatory flexibility analysis. Nevertheless, the FDIC has 
considered the likely impact of the rule on small entities and believes 
that the rule will not have a significant impact on a substantial 
number of small entities.

VI. Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA) (Public Law 104-121, 110 Stat. 857) provides generally for 
agencies to report rules to Congress and for Congress to review such 
rules. The reporting requirement is triggered in instances where the 
FDIC issues a final rule as defined by the APA (5 U.S.C. 551 et seq.). 
Because the FDIC is issuing a final rule as defined by the APA, the 
FDIC will file the reports required by the SBREFA.
    The Office of Management and Budget has determined that this final 
revision to 12 CFR 308 does not constitute a ``major'' rule as defined 
by the statute.

VII. The Treasury and General Government Appropriations Act, 1999 
Assessment of Federal Regulations and Policies on Families

    The FDIC has determined that this final rule will not affect family 
well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, 1999 (Public Law No. 105-277, 
112 Stat. 2681 (1998)).

VIII. Paperwork Reduction Act

    No collection of information pursuant to section 3504(h) of the 
Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.) is contained 
in this rule. Consequently, no information has been submitted to the 
Office of Management and Budget for review.

IX. Authority for the Regulation

    This regulation is authorized by the FDIC's general rulemaking 
authority and pursuant to its fundamental responsibilities to ensure 
the safety and soundness of insured depository institutions. 
Specifically, 12 U.S.C. 1819(a)(Tenth) provides the FDIC with general 
authority to issue such rules and regulations as it deems necessary to 
carry out the statutory mandates of the FDIA and other laws that the 
FDIC is charged with administering or enforcing.

List of Subjects in 12 CFR Part 308

    Administrative practice and procedure, Banks, Banking, Claims, 
Crime, Equal access to justice, Ex parte communications, Hearing 
procedure, Lawyers, Penalties, State nonmember banks.


0
For the reasons set out in the preamble, the FDIC amends 12 CFR 308 as 
follows:

PART 308--RULES OF PRACTICE AND PROCEDURE

0
1. The authority for part 308 continues to read as follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 
1815(e), 1817, 1818, 1820, 1828, 1829, 1831i, 1831m(g)(4), 1831o, 
1831p-1, 1832(c), 1884(b), 1972, 3102, 3108(a), 3349, 3909, 4717; 15 
U.S.C. 78(h) and (i), 78o-4(c), 78o-5, 78q-1, 78s, 78u, 78u-2, 78u-
3, 78w, 6801(b), 6805(b)(1); 28 U.S.C. 2461 note; 31 U.S.C. 330, 
5321; 42 U.S.C. 4012a; Sec. 3100(s), Pub. L. 104-134, 110 Stat. 
1321-358.


Sec.  308.116  [Amended]

0
2. Section 308.116 is amended by:
0
a. Paragraph (b)(4) is amended by removing ``November 12, 1996'' and 
adding ``December 31, 2004'' in its place.
0
b. Paragraph (b)(4)(i) is amended by removing $5,500 and adding $6,500 
in its place.
0
c. Paragraph (b)(4)(ii) is amended by removing $27,500 and adding 
$32,500 in its place.
0
d. Paragraph (b)(4)(iii)(A) is amended by removing $1,175,000 and 
adding $1,250,000 in its place.
0
e. Paragraph (b)(4)(iii)(B) is amended by removing $1,175,000 and 
adding $1,250,000 in its place.


Sec.  308.132  [Amended]

0
3. Section 308.132 is amended by:
0
a. Paragraph (c)(2)(ii) is amended by removing ``November 12, 1996'' 
and adding ``December 31, 2004'' in its place.
0
b. Paragraph (c)(2)(ii) is amended by removing $22,000 and adding 
$27,500 in its place.
0
c. Paragraph (c)(2)(iii)(B) is amended by removing $22,000 and adding 
$27,500 in its place.
0
d. Paragraph (c)(2)(iii)(B) is amended by removing ``November 12, 
1996'' and adding ``December 31, 2004'' in its place.
0
e. Paragraph (c)(2)(iii)(C) is amended by removing $1,175,000 and 
adding $1,250,000 in its place.
0
f. Paragraph (c)(2)(iii)(C) is amended by removing ``November 12, 
1996'' and adding ``December 31, 2004'' in its place.
0
g. Paragraph (c)(3) is amended by removing ``November 12, 1996'' and 
adding ``December 31, 2004'' in its place.
0
h. Paragraph (c)(3)(i) is amended by removing $5,500 and adding $6,500 
in its place, by removing $27,500 and adding $32,500 in its place, and 
by removing $1,175,000 and adding $1,250,000 in its place.
0
i. Paragraph (c)(3)(ii) is amended by removing $22,000 and adding 
$27,000 in its place and by removing $1,100,000 and adding $1,250,000 
in its place.\4\
---------------------------------------------------------------------------

    \4\ This provision simultaneously and prospectively implements 
both the: (A) Technical correction for the June 1996 to June 1999 
period by increasing the tier three CMP for violation of 12 U.S.C. 
1817(c) from $1,100,000 to $1,175,000 and (B) adjusts the corrected 
$1,175,000 CMP by increasing the CMP to $1,250.000 for the June 2000 
to June 2003 period.
---------------------------------------------------------------------------

0
j. Paragraph (c)(3)(iii) is amended by removing $5,500 and adding 
$6,500 in its place.
0
k. Paragraph (c)(3)(ix) is amended by removing $5,500 and adding $6,500 
in its place, by removing $27,500 and adding $32,500 in its place, and 
by removing $1,175,000 and adding $1,250,000 in its place.
0
l. In paragraph (c)(3)(xiv) by removing $5,500 and adding $6,500 in its 
place, by removing $60,000 and adding $65,000 in its place, by removing 
$300,000 and adding $325,000 in its place, by removing $120,000 and 
adding $130,000 in its place, and by removing $575,000 and adding 
$625,000 in its place.
0
m. Paragraph (c)(3)(xv) is amended by removing $5,500 and adding $6,500 
in its place.
0
n. Paragraph (c)(3)(xvi) is amended by removing $350 and adding $385 in 
its place and by removing $115,000 and adding $125,000 in its place.

    Dated this 12th day of October, 2004.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 04-23242 Filed 10-15-04; 8:45 am]
BILLING CODE 6714-01-P