[Federal Register Volume 89, Number 7 (Wednesday, January 10, 2024)]
[Rules and Regulations]
[Pages 1458-1460]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-00353]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 36 and 42

RIN 2900-AR89


Federal Civil Penalties Inflation Adjustment Act Amendments

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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

SUMMARY: The Department of Veterans Affairs (VA) is amending its 
regulations to adjust for inflation the amount of civil monetary 
penalties that are within VA's jurisdiction. These adjustments comply 
with the requirement in the Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended by the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015, to make annual 
adjustments to the penalties.

[[Page 1459]]


DATES: This rule is effective January 10, 2024.

FOR FURTHER INFORMATION CONTACT: Stephanie Li, Assistant Director, 
Regulations, Legislation, Engagement, and Training, Loan Guaranty 
Service (26), Veterans Benefits Administration, Department of Veterans 
Affairs, 810 Vermont Avenue NW, Washington, DC 20420, (202) 632-8862. 
(This is not a toll-free number.)

SUPPLEMENTARY INFORMATION: On November 2, 2015, the President signed 
into law the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015 (2015 Act) (Pub. L. 114-74, sec. 701, 129 
Stat. 584, 599-600), which amended the Federal Civil Penalties 
Inflation Adjustment Act of 1990 (Pub. L. 101-410, sec. 5, 104 Stat. 
890, 891-892), to improve the effectiveness of civil monetary penalties 
and to maintain their deterrent effect. The amended statute, codified 
in a note following 28 U.S.C. 2461, requires agencies to publish annual 
adjustments for inflation, based on the percentage change between the 
Consumer Price Index (defined in the statute as the Consumer Price 
Index for all-urban consumers (CPI-U) published by the Department of 
Labor) for the month of October preceding the date of the adjustment 
and the prior year's October CPI-U. 28 U.S.C. 2461 note, secs. 4(a) and 
(b) and 5(b)(1). This rule implements the 2024 calendar year inflation 
adjustment amounts.
    Under 38 U.S.C. 3710(g)(4)(B), VA is authorized to levy civil 
monetary penalties against private lenders that originate VA-guaranteed 
loans if a lender falsely certifies that they have complied with 
certain credit information and loan processing standards, as set forth 
by chapter 37, title 38 U.S.C. and part 36, title 38 CFR. Under section 
3710(g)(4)(B), any lender who knowingly and willfully makes such a 
false certification shall be liable to the United States Government for 
a civil penalty equal to two times the amount of the Secretary's loss 
on the loan involved or to another appropriate amount, not to exceed 
$10,000, whichever is greater. VA implemented the penalty amount in 38 
CFR 36.4340(k)(1)(i) and (k)(3). On December 19, 2023, the Office of 
Management and Budget (OMB) issued Circular M-24-07. This circular 
reflects that the October 2022 CPI-U was 298.012 and the October 2023 
CPI-U was 307.671, resulting in an inflation adjustment multiplier of 
1.03241. Accordingly, the calendar year 2024 inflation revision imposes 
an adjustment from $27,018 to $27,894.
    Under 31 U.S.C. 3802, VA can impose monetary penalties against any 
person who makes, presents, or submits a claim or written statement to 
VA that the person knows or has reason to know is false, fictitious, or 
fraudulent, or who engages in other covered conduct. The statute 
permits, in addition to any other remedy that may be prescribed by law, 
a civil penalty of not more than $5,000 for each claim. 31 U.S.C. 
3802(a)(1) and (2). VA implemented the penalty amount in 38 CFR 
42.3(a)(1)(iv) and (b)(1)(ii). As previously noted, OMB Circular M-24-
07 reflects an inflation adjustment multiplier of 1.03241. Therefore, 
the calendar year 2024 inflation revision imposes an adjustment from 
$13,508 to $13,946.
    Accordingly, VA is revising 38 CFR 36.4340(k)(1)(i) and (3) and 
42.3(a)(1)(iv) and (b)(1)(ii) to reflect the 2024 inflationary 
adjustments for civil monetary penalties assessed or enforced by VA.

Administrative Procedure Act

    The Secretary of Veterans Affairs finds that there is good cause 
under 5 U.S.C. 553(b)(B) and (d)(3) to dispense with the opportunity 
for prior notice and public comment and to publish this rule with an 
immediate effective date. The statute requires agencies to make annual 
adjustments for inflation to the allowed amounts of civil monetary 
penalties ``notwithstanding section 553 of title 5, United States 
Code.'' 28 U.S.C. 2461 note, sec. 4(a) and (b). The penalty 
adjustments, and the methodology used to determine the adjustments, are 
set by the terms of the statute. VA has no discretion to make changes 
in those areas. Therefore, an opportunity for prior notice and public 
comment and a delayed effective date are unnecessary.

Executive Orders 12866, 13563 and 14094

    Executive Order 12866 (Regulatory Planning and Review) directs 
agencies to assess the costs and benefits of available regulatory 
alternatives and, when regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health and safety effects, and other advantages; 
distributive impacts; and equity). Executive Order 13563 (Improving 
Regulation and Regulatory Review) emphasizes the importance of 
quantifying both costs and benefits, reducing costs, harmonizing rules, 
and promoting flexibility. Executive Order 14094 (Executive Order on 
Modernizing Regulatory Review) supplements and reaffirms the 
principles, structures, and definitions governing contemporary 
regulatory review established in Executive Order 12866 of September 30, 
1993 (Regulatory Planning and Review), and Executive Order 13563 of 
January 18, 2011 (Improving Regulation and Regulatory Review). The 
Office of Information and Regulatory Affairs has determined that this 
rulemaking is not a significant regulatory action under Executive Order 
12866, as amended by Executive Order 14094. The Regulatory Impact 
Analysis associated with this rulemaking can be found as a supporting 
document at www.regulations.gov.

Regulatory Flexibility Act

    The Regulatory Flexibility Act, 5 U.S.C. 601-612, is not applicable 
to this rulemaking because notice of proposed rulemaking is not 
required. 5 U.S.C. 601(2), 603(a), 604(a).

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in the expenditure by 
State, local, and tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any one year. This final rule will have no such effect on 
State, local, and tribal governments, or on the private sector.

Paperwork Reduction Act

    This final rule contains no provisions constituting a collection of 
information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-
3521).

 Congressional Review Act

    Pursuant to Subtitle E of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (known as the Congressional Review Act) (5 U.S.C. 
801 et seq.), the Office of Information and Regulatory Affairs 
designated this rule as not satisfying the criteria under 5 U.S.C. 
804(2).

List of Subjects

38 CFR Part 36

    Condominiums, Housing, Individuals with disabilities, Loan 
programs--housing and community development, Loan programs--veterans, 
Manufactured homes, Mortgage insurance, Reporting and recordkeeping 
requirements, Veterans.

38 CFR Part 42

    Administrative practice and procedure, Claims, Fraud, Penalties.

[[Page 1460]]

Signing Authority

    Denis McDonough, Secretary of Veterans Affairs, approved and signed 
this document on January 4, 2024, and authorized the undersigned to 
sign and submit the document to the Office of the Federal Register for 
publication electronically as an official document of the Department of 
Veterans Affairs.

Luvenia Potts
Regulation Development Coordinator, Office of Regulation Policy & 
Management, Office of General Counsel, Department of Veterans Affairs.

    For the reasons stated in the preamble, the Department of Veterans 
Affairs amends 38 CFR parts 36 and 42 as set forth below:

PART 36--LOAN GUARANTY

0
1. The authority citation for part 36 continues to read as follows:

    Authority:  38 U.S.C. 501 and 3720.


Sec.  36.4340   [Amended]

0
2. In Sec.  36.4340, amend paragraphs (k)(1)(i) introductory text and 
(k)(3) by removing ``$27,018'' and adding in its place ``$27,894''.

PART 42--STANDARDS IMPLEMENTING THE PROGRAM FRAUD CIVIL REMEDIES 
ACT

0
3. The authority citation for part 42 continues to read as follows:

    Authority:  Pub. L. 99-509, secs. 6101-6104, 100 Stat. 1874, 
codified at 31 U.S.C. 3801-3812.


Sec.  42.3   [Amended]

0
4. In Sec.  42.3, amend paragraphs (a)(1)(iv) and (b)(1)(ii) by 
removing ``$13,508'' and adding in its place ``$13,946''.

[FR Doc. 2024-00353 Filed 1-9-24; 8:45 am]
BILLING CODE 8320-01-P