[Federal Register Volume 83, Number 150 (Friday, August 3, 2018)]
[Proposed Rules]
[Pages 38080-38085]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-16548]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 308 and 327

RIN 3064-AE75


Rules of Practice and Procedure

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Notice of proposed rulemaking and request for comments.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) proposes to 
amend its rules of practice and procedure to remove duplicative, 
descriptive regulatory language related to civil money penalty (CMP) 
amounts that restates existing statutory language regarding such CMPs, 
codify Congress's recent change to CMP inflation-adjustments in the 
FDIC's regulations, and direct readers to an annually published notice 
in the Federal Register--rather than the Code of Federal Regulations 
(CFR)--for information regarding the maximum CMP amounts that can be 
assessed after inflation adjustments. These revisions are intended to 
simplify the CFR by removing unnecessary and redundant text and to make 
it easier for readers to locate the current, inflation-adjusted maximum 
CMP amounts by presenting these amounts in an annually published chart. 
Additionally, the FDIC proposes to correct four errors and revise 
cross-references currently found in its rules of practice and 
procedure.

DATES: Comments must be received by October 2, 2018.

ADDRESSES: You may submit comments, identified by RIN 3064-AE75, by any 
of the following methods:
    <bullet> Agency website: http://www.fdic.gov/regulations/laws/Federal/. Follow the instructions for submitting comments on the Agency 
website.
    <bullet> Email: <a href="/cdn-cgi/l/email-protection#efac8082828a819b9caf898b868cc1888099"><span class="__cf_email__" data-cfemail="55163a3838303b21261533313c367b323a23">[email protected]</span></a>. Include the RIN 3064-AE75 in the 
subject line of the message.
    <bullet> Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments, Federal Deposit Insurance Corporation, 550 17th Street NW, 
Washington, DC 20429.
    <bullet> Hand Delivery: Comments may be hand-delivered to the guard 
station at the rear of the 550 17th Street Building (located on F 
Street) on business days between 7 a.m. and 5 p.m.
    Public Inspection: All comments received must include the agency 
name and RIN for this rulemaking. All comments received will be posted 
without change to http://www.fdic.gov/regulations/laws/Federal/--
including any personal information provided--for public inspection. 
Paper copies of public comments may be ordered from the FDIC Public 
Information Center, 3501 North Fairfax Drive, Room E-1002, Arlington, 
VA 22226 by telephone at (877) 275-3342 or (703) 562-2200.

FOR FURTHER INFORMATION CONTACT: Graham N. Rehrig, Senior Attorney, 
Legal Division, (202) 898-3829, <a href="/cdn-cgi/l/email-protection#7c1b0e19140e151b3c1a18151f521b130a"><span class="__cf_email__" data-cfemail="177065727f657e705771737e7439707861">[email protected]</span></a>, or Sydney Mayer, 
Attorney, Legal Division, (202) 898-3669.

SUPPLEMENTARY INFORMATION: 

[[Page 38081]]

I. Policy Objectives

    The policy objective of the Proposed Rule is to simplify the 
presentation of maximum CMP amounts within 12 CFR part 308 to support 
ease of reference and public understanding. The Proposed Rule will 
amend the presentation of maximum CMP limits to help ensure consistency 
with similar statutes of other Federal financial regulators.\1\ 
Additionally, the Proposed Rule will implement recent Office of 
Management and Budget (OMB) guidance on simplifying the publication of 
annual inflation adjustments.
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    \1\ See 12 CFR 19.240 and 83 FR 1657 (Jan. 12, 2018) (table 
containing the CMP adjustments published by the Office of the 
Comptroller of Currency); 12 CFR 263.65 (table containing the CMP 
adjustments published by the Board of Governors of the Federal 
Reserve System); 12 CFR 747.1001 (table containing the CMP 
adjustments published by the National Credit Union Association).
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II. Background

    The FDIC assesses CMPs under section 8(i) of the Federal Deposit 
Insurance Act (FDIA) (12 U.S.C. 1818) and a variety of other 
statutes.\2\ Congress has established maximum penalties that can be 
assessed under these statutes. In many cases, these statutes contain 
multiple penalty tiers, permitting the assessment of penalties at 
various levels depending on the severity of the misconduct at issue.\3\
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    \2\ See, e.g., 12 U.S.C. 1972(2)(F) (authorizing the FDIC to 
impose CMPs for violations of the Bank Holding Company Act of 1970 
related to prohibited tying arrangements); 15 U.S.C. 78u-2 
(authorizing the FDIC to impose CMPs for violations of certain 
provisions of the Securities Exchange Act of 1934); 42 U.S.C. 
4012a(f) (authorizing the FDIC to impose CMPs for pattern or 
practice violations of the Flood Disaster Protection Act).
    \3\ For example, 12 U.S.C. 1818(i)(2) provides for three tiers 
of CMPs, with the size of the CMP increasing with the gravity of the 
misconduct.
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    Since 1990, Congress has required Federal agencies with authority 
to impose CMPs to periodically adjust the maximum CMP amounts these 
agencies are authorized to impose.\4\ These periodic updates have 
helped to ``maintain the deterrent effect of civil monetary penalties 
and promote compliance with the law.'' \5\ In 2015, Congress revised 
the process by which Federal agencies adjust applicable CMPs for 
inflation.\6\ Under the 2015 Adjustment Act, the FDIC is required to 
make annual adjustments to its maximum CMP amounts to account for 
inflation.\7\ These adjustments apply to all CMPs covered by the 2015 
Adjustment Act.\8\ The 2015 Adjustment Act requires annual adjustments 
be made by January 15 of each year.\9\ The FDIC's 2018 adjustments were 
published on January 12, 2018.\10\
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    \4\ See The Federal Civil Penalties Inflation Adjustment Act of 
1990, Public Law 101-410.
    \5\ See section 2 of the Federal Civil Penalties Inflation 
Adjustment Act of 1990. Public Law 101-410, 104 Stat. 890 (amended 
2015) (codified as amended at 28 U.S.C. 2461 note).
    \6\ See The Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015, Public Law 114-74, sec. 701, 129 Stat. 584 
(2015 Adjustment Act). Although the 2015 Adjustment Act increased 
the maximum penalty that may be assessed under each applicable 
statute, the FDIC still possesses discretion to impose CMP amounts 
below the maximum level in accordance with the severity of the 
misconduct at issue. When making a determination as to the 
appropriate level of any given penalty, the FDIC is guided by 
statutory factors set forth in 12 U.S.C. 1818(i)(2)(G) and those 
factors identified in the Interagency Policy Statement Regarding the 
Assessment of CMPs by the Federal Financial Institutions Regulatory 
Agencies. See 63 FR 30227 (June 3, 1998). Such factors include, but 
are not limited to, the gravity and duration of the misconduct and 
the intent related to the misconduct.
    \7\ See 2015 Adjustment Act at sec. 701(b).
    \8\ See Public Law 101-410, sec. 3(2), 104 Stat. 890 (amended 
2015) (codified as amended at 28 U.S.C. 2461 note).
    \9\ Public Law 114-74, sec. 701(b), 129 Stat. 584.
    \10\ See 83 FR 1519, available at https://www.fdic.gov/news/board/2017/2017-12-19-notice-sum-b-fr.pdf.
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    The 2015 Adjustment Act directs Federal agencies to follow guidance 
issued by the OMB by December 15 of each year when calculating new 
maximum penalty amounts.\11\ The OMB issued guidance for the 2018 CMP 
adjustments on December 15, 2017.\12\ The OMB Guidance noted, ``Some 
agencies have chosen to remove their specific penalty amounts from the 
CFR and have instead codified the statutory formula for inflation 
adjustments. Agencies must still calculate and publish their penalty 
adjustments in the Federal Register.'' \13\
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    \11\ See Public Law 114-74, sec. 701(b), 129 Stat. 584.
    \12\ OMB, Implementation of Penalty Inflation Adjustments for 
2018, Pursuant to the Federal Civil Penalties Inflation Adjustment 
Act Improvements Act of 2015, M-18-03 (OMB Guidance), available at 
https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf.
    \13\ OMB Guidance at 4 (citing 81 FR 41438 (June 27, 2016) 
(Social Security Administration) (codified at 29 CFR 498.103(g))).
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III. Description and Expected Effects of the Proposed Rule

    The FDIC proposes amending its rules of practice and procedure to 
remove from the CFR descriptive regulatory language related to maximum 
CMP amounts that duplicates statutory language, codify the statutory 
formula for inflation adjustments to the maximum CMP amounts, and 
direct readers to a table published annually in the Federal Register, 
containing the inflation-adjusted maximum CMP amounts. These proposed 
changes would be consistent with the OMB Guidance and the practices of 
other Federal regulators.
    Currently, 12 CFR 308.116(b) and 308.132(d) contain the maximum CMP 
amounts that may be assessed for violations of various statutes, along 
with lengthy descriptions of these statutes. Rather than providing any 
interpretation of these statutes or providing guidance regarding the 
assessment of CMPs for violations of these statutes, the descriptive 
language contained in Sec. Sec.  308.116(b) and 308.132(d) merely 
restates the enabling statutory language. The FDIC's current format for 
identifying inflation-adjusted CMP figures differs significantly from 
the formats published by other prudential regulators \14\ and makes it 
more difficult for readers to locate applicable maximum CMP amounts. 
Accordingly, the FDIC proposes removing descriptive language found in 
Sec. Sec.  308.116(b) and 308.132(d). The FDIC believes that these 
changes will remove unnecessary and redundant language from the CFR and 
improve readability.
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    \14\ The OCC, the FRB, and the National Credit Union Association 
(NCUA) provide a simplified list in a tabular format, identifying 
each enabling statute and the associated maximum CMP amount, 
adjusted for inflation. See 12 CFR 19.240 and 83 FR 1657 (Jan. 12, 
2018) (table containing the OCC's CMP adjustments); 12 CFR 263.65 
(table containing the FRB's CMP adjustments); 12 CFR 747.1001 (table 
containing the NCUA's CMP adjustments).
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    A sample annual table containing the current maximum CMP amounts--
effective as of January 15, 2018--appears at the end of this section, 
for reference. Under the Proposed Rule, the FDIC would calculate and 
publish a similar chart with inflation-adjusted figures in the Federal 
Register on or before January 15 of each calendar year.
    The FDIC, however, proposes to retain language in Sec.  308.116(a), 
(c), and (d) concerning violations of the Change in Bank Control Act. 
These regulations, which the FDIC implemented in 1991, address requests 
for a hearing, mitigating factors, and the consequences of a 
respondent's failure to answer.\15\ The language in current Sec.  
308.116(b)(1) through (3), however, repeats the relevant statutory 
language of 12 U.S.C. 1817(j)(16)(A)-(D). Further, current Sec.  
308.116(b)(4) merely contains inflation adjustments. Therefore, the 
FDIC proposes removing current Sec.  308.116(b) and instead directing 
readers to Sec.  308.132(d) to determine current maximum CMP amounts.
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    \15\ See 56 FR 37968 (Aug. 9, 1991).
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    The FDIC also proposes to keep language concerning the late filing 
of Call Reports at current Sec.  308.132(d)(1) and (d)(3). 12 U.S.C. 
1817(a) provides the maximum CMP amounts for the late

[[Page 38082]]

filing of Call Reports. In 1991, however, the FDIC issued regulations 
that further subdivided these amounts based upon the size of the 
institution and the lateness of the filing.\16\ These regulations 
accordingly differ from other provisions found in Sec.  308.132(d) that 
simply restate relevant statutory language regarding maximum CMP 
amounts. The Proposed Rule would merge language from current Sec.  
308.132(d)(1) and (3) into a new Sec.  308.132(e), since, aside from 
the differing penalty amounts, these two current subsections contain 
similar language. The new Sec.  308.132(e) would direct readers to the 
Federal Register to determine the applicable inflation-adjusted penalty 
amounts.
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    \16\ See 56 FR 37968, 37992-93 (Aug. 9, 1991).
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    The FDIC proposes correcting four errors currently located at Sec.  
308.132(d)(1) and (3) concerning the maximum amount that generally will 
be assessed for violations of 12 U.S.C. 1464(v) and 1817(a) regarding 
the late filing of Call Reports by certain small institutions. The 
current text contains the inadvertent overstatement of four fractions 
of an institution's total assets that are paired with correctly stated 
basis-point figures. These corrections would align the listed fractions 
of an institution's total assets with the listed basis-point 
calculations, and these corrections would be reflected in the annual 
Federal Register CMP notice.\17\
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    \17\ For example, current section 308.132(d)(1)(i)(A) states, 
``the amount assessed shall be the greater of [an inflation-adjusted 
daily penalty] or \1/1\,000th of the institution's total assets (1/
10th of a basis point)'' when it should read, ``the amount assessed 
shall be the greater of [an inflation-adjusted daily penalty] or 1/
100,000th of the institution's total assets (1/10th of a basis 
point).'' (Emphasis added).
    \18\ The maximum penalty amount is per day, unless otherwise 
indicated.
    \19\ The maximum penalty amount for an institution is the lesser 
of this amount or 1 percent of total assets.
    \20\ 12 U.S.C. 1817(a) provides the maximum CMP amounts for the 
late filing of Call Reports. In 1991, however, the FDIC issued 
regulations that further subdivided these amounts based upon the 
size of the institution and the lateness of the filing. See 56 FR 
37968, 37992-93 (Aug. 9, 1991), to be re-codified at 12 CFR 
308.132(e)(1). These adjusted subdivided amounts are found at the 
end of this chart.
    \21\ The maximum penalty amount for an institution is the lesser 
of this amount or 1 percent of total assets.
    \22\ The maximum penalty amount for an institution is the lesser 
of this amount or 1 percent of total assets.
    \23\ The maximum penalty amount for an institution is the lesser 
of this amount or 1 percent of total assets.
    \24\ These amounts also apply to CMPs in statutes that cross-
reference 12 U.S.C. 1818, such as 12 U.S.C. 2601, 2804(b), 3108(b), 
3349(b), 4009(a), 4309(a), 4717(b); 15 U.S.C. 1607(a), 1681s(b), 
1691(b), 1691c(a), 1693o(a); 42 U.S.C. 3601.
    \25\ The maximum penalty amount for an institution is the lesser 
of this amount or 1 percent of total assets.
    \26\ The $122-per-day maximum CMP under 12 U.S.C. 1828(h), for 
failure or refusal to pay any assessment, applies only when the 
assessment is less than $10,000. When the amount of the assessment 
is $10,000 or more, the maximum CMP under section 1828(h) is 1 
percent of the amount of the assessment for each day that the 
failure or refusal continues.
    \27\ The maximum penalty amount for an institution is the lesser 
of this amount or 1 percent of total assets.
    \28\ The maximum penalty amount for an institution is the 
greater of this amount or 1/100,000th of the institution's total 
assets.
    \29\ The maximum penalty amount for an institution is the 
greater of this amount or 1/50,000th of the institution's total 
assets.
    \30\ The maximum penalty amount for an institution is the lesser 
of this amount or 1 percent of total assets.
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    Lastly, the FDIC proposes to revise cross-references found at 12 
CFR 308.502(a)(6), 12 CFR 308.502(b)(4), 12 CFR 308.530, and 12 CFR 
327.3(c) to reflect the proposed revisions to 12 CFR 308.132(d).
    Since the Proposed Rule would amend the presentation of maximum CMP 
levels in the Federal Register, the FDIC believes the rule will not 
pose any regulatory costs to IDIs or cost to the public in general.

                                        Sample Civil Money Penalty Table
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        U.S. Code citation                     Adjusted Maximum CMP \18\  (Beginning January 15, 2018)
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12 U.S.C. 1464(v):
    Tier One CMP..................  $3,928
    Tier Two CMP..................  $39,278
    Tier Three CMP \19\...........  $1,963,870
12 U.S.C. 1467(d).................  $9,819
12 U.S.C. 1817(a):
    Tier One CMP \20\.............  $3,928
    Tier Two CMP..................  $39,278
    Tier Three CMP \21\...........  $1,963,870
12 U.S.C. 1817(c):
    Tier One CMP..................  $3,591
    Tier Two CMP..................  $35,904
    Tier Three CMP \22\...........  $1,795,216
12 U.S.C. 1817(j)(16):
    Tier One CMP..................  $9,819
    Tier Two CMP..................  $49,096
    Tier Three CMP \23\...........  $1,963,870
12 U.S.C. 1818(i)(2) \24\
    Tier One CMP..................  $9,819
    Tier Two CMP..................  $49,096
    Tier Three CMP \25\...........  $1,963,870
12 U.S.C. 1820(e)(4)..............  $8,977
12 U.S.C. 1820(k)(6)..............  $323,027
12 U.S.C. 1828(a)(3)..............  $122
12 U.S.C. 1828(h) \26\
    For assessments < $10,000.....  $122
12 U.S.C. 1829b(j)................  $20,521
12 U.S.C. 1832(c).................  $2,852
12 U.S.C. 1884....................  $285
12 U.S.C. 1972(2)(F):
    Tier One CMP..................  $9,819
    Tier Two CMP..................  $49,096

[[Page 38083]]

 
    Tier Three CMP \27\...........  $1,963,870
12 U.S.C. 3909(d)                   $2,443
15 U.S.C. 78u-2
    Tier One CMP (individuals)....  $9,239
    Tier One CMP (others).........  $92,383
    Tier Two CMP (individuals)....  $92,383
    Tier Two CMP (others).........  $461,916
    Tier Three CMP (individuals)..  $184,767
    Tier Three penalty (others)...  $923,831
15 U.S.C. 1639e(k):
    First violation...............  $11,279
    Subsequent violations.........  $22,556
31 U.S.C. 3802                      $11,181
42 U.S.C. 4012a(f)                  $2,133
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CFR Citation                        Adjusted Presumptive CMP
                                    0(Beginning January 15, 2018)
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12 CFR 308.132(e)(1)(i):
    Institutions with $25 million
     or more in assets:
        1 to 15 days late.........  $538
        16 or more days late......  $1,078
    Institutions with less than
     $25 million in assets:
        1 to 15 days late \28\....  $180
        16 or more days late \29\.  $359
12 CFR 308.132(e)(1)(ii):
    Institutions with $25 million
     or more in assets
        1 to 15 days late.........  $897
16 or more days late..............  $1,795
    Institutions with less than
     $25 million in assets
    1 to 15 days late.............  1/50,000th of the institution's total assets.
    16 or more days late..........  1/25,000th of the institution's total assets.
12 CFR 308.132(e)(2)..............  $39,278
12 CFR 308.132(e)(3):
    Tier One CMP..................  $3,928
    Tier Two CMP..................  $39,278
    Tier Three CMP \30\...........  $1,963,870
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IV. Alternatives Considered

    During preliminary discussions regarding the Proposed Rule, the 
FDIC considered possible alternatives to issuing the Proposed Rule. The 
primary alternative the FDIC considered was to maintain the current 
statutory language in the CFR and Federal Register as well as the CMP 
presentation format. This alternative (1) keeps the redundant statutory 
language in the CFR and Federal Register, (2) does not improve the 
clarity and readability of the maximum CMPs, and (3) does not address 
the fact that the CMP presentation format is inconsistent with the 
other prudential regulators. Therefore, the FDIC believes the Proposed 
Rule will support ease of reference and public understanding more so 
than the alternative.

V. Request for Comment

    The FDIC believes that these changes to Part 308 are ministerial 
and technical and that, therefore, notice-and-comment rulemaking is 
unnecessary. Nonetheless, in the interest of transparency, the FDIC 
invites comments on all aspects of this Proposed Rule. Commenters are 
specifically encouraged to identify any technical issues raised by the 
Proposed Rule.

VI. Regulatory Analysis

Riegle Community Development and Regulatory Improvement Act

    Section 302 of the Riegle Community Development and Regulatory 
Improvement Act of 1994 \31\ requires that each Federal banking agency, 
in determining the effective date and administrative compliance 
requirements for new regulations that impose additional reporting, 
disclosure, or other requirements on insured depository institutions, 
consider, consistent with principles of safety and soundness and the 
public interest, any administrative burdens that such regulations would 
place on depository institutions, including small depository 
institutions, and customers of depository institutions, as well as the 
benefits of such regulations. In addition, in order to provide an 
adequate transition period, new regulations that impose additional 
reporting, disclosures, or other new requirements on IDIs generally 
must take effect on the first day of a calendar quarter that begins on 
or after the date on which the regulations are published in final form.
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    \31\ 12 U.S.C. 4802.
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    The Proposed Rule would not impose any new or additional reporting, 
disclosures, or other requirements on insured depository institutions. 
Therefore, the Proposed Rule is not subject to the requirements of this 
statute.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires that, in 
connection with a rulemaking, an agency prepare and make available for 
public comment an initial regulatory flexibility analysis describing 
the impact of the Proposed Rule on small entities.\32\ A regulatory 
flexibility analysis is not required,

[[Page 38084]]

however, if the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
The Small Business Administration has defined ``small entities'' to 
include banking organizations with total assets less than or equal to 
$550 million.\33\ The FDIC supervises 3,603 depository 
institutions,\34\ of which 2,885 are defined as small banking entities 
by the terms of the RFA. For the reasons described below and under 
section 605(b) of the RFA, the FDIC certifies that the Proposed Rule 
will not have a significant economic impact on a substantial number of 
small entities.
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    \32\ 5 U.S.C. 601 et seq.
    \33\ [thinsp]13 CFR 121.201 (as amended, effective December 2, 
2014).
    \34\ FDIC-supervised institutions are set forth in 12 U.S.C. 
1813(q)(2).
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    The FDIC believes the proposed amendments to 12 CFR part 308 will 
have a negligible impact on small entities. For a detailed description 
of the Proposed Rule and its expected effects, please review Section 
III above. The proposed revisions are intended to simplify the text of 
the CFR by removing unnecessary and redundant text in order to make it 
easier for readers to reference and understand the current maximum CMP 
amounts.

The Omnibus Consolidated and Emergency Supplemental Appropriations Act, 
1999: Assessment of Federal Regulations and Policies on Families

    The FDIC determined that the Proposed Rule will not affect family 
wellbeing within the meaning of section 654 of the Omnibus Consolidated 
and Emergency Supplemental Appropriations Act, 1999.\35\
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    \35\ Public Law 105-277, 112 Stat. 2681 (1998).
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Paperwork Reduction Act

    The Proposed Rule does not create any new, or revise any existing, 
collections of information under section 3504(h) of the Paperwork 
Reduction Act of 1980.\36\ Consequently, no information collection 
request will be submitted to the OMB for review.
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    \36\ 44 U.S.C. 3501 et seq.
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Plain Language Act

    Section 722 of the Gramm-Leach-Bliley Act requires the FDIC to use 
plain language in all proposed and final rules published after January 
1, 2000.\37\ Accordingly, the FDIC has attempted to write the Proposed 
Rule in clear and comprehensible language.
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    \37\ Public Law 106-102, 113 Stat. 1338 (Nov. 12, 1999).
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List of Subjects

12 CFR Part 308

    Administrative practice and procedure, Bank deposit insurance, 
Banks, Banking, Claims, Crime, Equal access to justice, Fraud, 
Investigations, Lawyers, Penalties.

12 CFR Part 327

    Bank deposit insurance, Banks, Savings Associations.

    For the reasons set forth in the preamble, the FDIC proposes to 
amend 12 CFR parts 308 and 327 as follows:

PART 308--RULES OF PRACTICE AND PROCEDURE

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


    Authority:  5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 
1464, 1467(d), 1467a, 1468, 1815(e), 1817, 1818, 1819, 1820, 1828, 
1829, 1829(b), 1831i, 1831m(g)(4), 1831o, 1831p-1, 1832(c), 1884(b), 
1972, 3102, 3108(a), 3349, 3909, 4717, 5412(b)(2)(C), 5414(b)(3); 15 
U.S.C. 78(h) and (i), 78o(c)(4), 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; Pub. L. 104-134, sec. 31001(s), 
110 Stat. 1321; Pub. L. 109-351, 120 Stat. 1966; Pub. L. 111-203, 
124 Stat. 1376; Pub. L. 114-74, sec. 701, 129 Stat. 584.

0
2. Amend Sec.  308.116 by revising paragraph (b) to read as follows:


Sec.  308.116  Assessment of penalties.

* * * * *
    (b) Maximum penalty amounts. Under 12 U.S.C. 1817(j)(16), a civil 
money penalty may be assessed for violations of change in control of 
insured depository institution provisions in the maximum amounts 
calculated and published in accordance with 12 CFR 308.132(d).
* * * * *
0
3. Amend Sec.  308.132 by revising paragraph (d) and adding paragraph 
(e) to read as follows:

Sec.  308.132  Assessment of penalties.

* * * * *
    (d) Maximum civil money penalty amounts. Under the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015, the Board 
of Directors or its designee may assess civil money penalties in the 
maximum amounts using the following framework:
    (1) Statutory formula to calculate inflation adjustments. The FDIC 
is required by statute to annually adjust for inflation the maximum 
amount of each civil money penalty within its jurisdiction to 
administer. The inflation adjustment is calculated by multiplying the 
maximum dollar amount of the civil money penalty for the previous 
calendar year by the cost-of-living inflation adjustment multiplier 
provided annually by the Office of Management and Budget and rounding 
the total to the nearest dollar.
    (2) Notice of inflation adjustments. By January 15 of each calendar 
year, the FDIC will announce in the Federal Register the maximum 
penalties that may be assessed after each January 15, based on the 
formula in paragraph (d)(1) of this section, for conduct occurring on 
or after November 2, 2015.
    (e) Civil money penalties for violations of 12 U.S.C. 1464(v) and 
12 U.S.C. 1817(a)--(1) Late Filing--Tier One penalties. Where an 
institution fails to make or publish its Report of Condition and Income 
(Call Report) within the appropriate time periods, but where the 
institution maintains procedures in place reasonably adapted to avoid 
inadvertent error and the late filing occurred unintentionally and as a 
result of such error, or where the institution inadvertently 
transmitted a Call Report that is minimally late, the Board of 
Directors or its designee may assess a Tier One civil money penalty. 
The amount of such a penalty shall not exceed the maximum amount 
calculated and published annually in the Federal Register under 
paragraph (d)(2) of this section. Such a penalty may be assessed for 
each day that the violation continues.
    (i) First offense. Generally, in such cases, the amount assessed 
shall be an amount calculated and published annually in the Federal 
Register under paragraph (d)(2) of this section. The Federal Register 
document will contain a presumptive penalty amount per day for each of 
the first 15 days for which the failure continues, and a presumptive 
amount per day for each subsequent days the failure continues, 
beginning on the 16th day. The annual Federal Register notice will also 
provide penalty amounts that generally may be assessed for institutions 
with less than $25,000,000 in assets.
    (ii) Subsequent offense. The FDIC will calculate and publish in the 
Federal Register a presumptive daily Tier One penalty to be imposed 
where an institution has been delinquent in making or publishing its 
Call Report within the preceding five quarters. The published penalty 
shall identify the amount that will generally be imposed per day for 
each of the first 15 days for which the failure continues, and the 
amount that will generally be imposed per day for each subsequent day 
the failure continues, beginning on the 16th day. The annual Federal 
Register

[[Page 38085]]

document will also provide penalty amounts that generally may be 
assessed for institutions with less than $25,000,000 in assets.
    (iii) Lengthy or repeated violations. The amounts set forth in this 
paragraph (e)(1) will be assessed on a case-by-case basis where the 
amount of time of the institution's delinquency is lengthy or the 
institution has been delinquent repeatedly in making or publishing its 
Call Reports.
    (iv) Waiver. Absent extraordinary circumstances outside the control 
of the institution, penalties assessed for late filing shall not be 
waived.
    (2) Late-filing--Tier Two penalties. Where an institution fails to 
make or publish its Call Report within the appropriate time period, the 
Board of Directors or its designee may assess a Tier Two civil money 
penalty for each day the failure continues. The amount of such a 
penalty will not exceed the maximum amount calculated and published 
annually in the Federal Register under paragraph (d)(2) of this 
section.
    (3) False or misleading reports or information--(i) Tier One 
penalties. In cases in which an institution submits or publishes any 
false or misleading Call Report or information, the Board of Directors 
or its designee may assess a Tier One civil money penalty for each day 
the information is not corrected, where the institution maintains 
procedures in place reasonably adapted to avoid inadvertent error and 
the violation occurred unintentionally and as a result of such error, 
or where the institution inadvertently transmits a Call Report or 
information that is false or misleading. The amount of such a penalty 
will not exceed the maximum amount calculated and published annually in 
the Federal Register under paragraph (d)(2) of this section.
    (ii) Tier Two penalties. Where an institution submits or publishes 
any false or misleading Call Report or other information, the Board of 
Directors or its designee may assess a Tier Two civil money penalty for 
each day the information is not corrected. The amount of such a penalty 
will not exceed the maximum amount calculated and published annually in 
the Federal Register under paragraph (d)(2) of this section.
    (iii) Tier Three penalties. Where an institution knowingly or with 
reckless disregard for the accuracy of any Call Report or information 
submits or publishes any false or misleading Call Report or other 
information, the Board of Directors or its designee may assess a Tier 
Three civil money penalty for each day the information is not 
corrected. The penalty shall not exceed the lesser of 1 percent of the 
institution's total assets per day or the amount calculated and 
published annually in the Federal Register under paragraph (d)(2) of 
this section.
    (4) Mitigating factors. The amounts set forth in paragraphs (e)(1) 
through (3) of this section may be reduced based upon the factors set 
forth in paragraph (b) of this section.
0
4. Amend Sec.  308.502 by revising paragraphs (a)(6) and (b)(4) to read 
as follows:


Sec.  308.502  Basis for civil penalties and assessments.

    (a) * * *
    (6) The amount of any penalty assessed under paragraph (a)(1) of 
this section will be adjusted for inflation in accordance with section 
308.132(d) of this part.
* * * * *
    (b) * * *
    (4) The amount of any penalty assessed under paragraph (a)(1) of 
this section will be adjusted for inflation in accordance with section 
308.132(d) of this part.
* * * * *
0
5. Amend Sec.  308.530 by revising paragraph (d) to read as follows:

Sec.  308.530  Determining the amount of penalties and assessments.

* * * * *
    (d) Civil money penalties that are assessed under this subpart are 
subject to annual adjustments to account for inflation as required by 
the Federal Civil Penalties Inflation Adjustment Act Improvements Act 
of 2015 (Pub. L. 114-74, sec. 701, 129 Stat. 584) (see also 12 CFR 
308.132(d)).

PART 327--ASSESSMENTS

0
6. The authority citation for part 327 continues to read as follows:


    Authority:  12 U.S.C. 1441, 1813, 1815, 1817-19, 1821.
* * * * *
0
7. Amend Sec.  327.3 by revising paragraph (c) to read as follows:

Sec.  327.3  Payment of assessments.

* * * * *
    (c) Necessary action, sufficient funding by institution. Each 
insured depository institution shall take all actions necessary to 
allow the Corporation to debit assessments from the insured depository 
institution's designated deposit account. Each insured depository 
institution shall, prior to each payment date indicated in paragraph 
(b)(2) of this section, ensure that funds in an amount at least equal 
to the amount on the quarterly certified statement invoice are 
available in the designated account for direct debit by the 
Corporation. Failure to take any such action or to provide such funding 
of the account shall be deemed to constitute nonpayment of the 
assessment. Penalties for failure to timely pay assessments will be 
calculated and published in accordance with 12 CFR 308.132(d).
* * * * *

    Dated at Washington, DC, on July 19, 2018.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Valerie Best,
Assistant Executive Secretary.
[FR Doc. 2018-16548 Filed 8-2-18; 8:45 am]
 BILLING CODE 6714-01-P


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