[Federal Register Volume 89, Number 7 (Wednesday, January 10, 2024)]
[Rules and Regulations]
[Page 1445]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-00339]



[[Page 1445]]

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FARM CREDIT SYSTEM INSURANCE CORPORATION

12 CFR Part 1411

RIN 3055-AAZZ


Rules of Practice and Procedure; Adjusting Civil Money Penalties 
for Inflation

AGENCY: Farm Credit System Insurance Corporation.

ACTION: Final rule.

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SUMMARY: This rule implements inflation adjustments to civil money 
penalties (CMPs) that the Farm Credit System Insurance Corporation 
(FCSIC) may impose under the Farm Credit Act of 1971, as amended. These 
adjustments are required by 2015 amendments to the Federal Civil 
Penalties Inflation Adjustment Act of 1990.

DATES:  Effective date: This regulation is effective on January 10, 
2024.
    Applicability date: The adjusted amounts of civil money penalties 
in this rule are applicable to penalties assessed on or after January 
15, 2024, for conduct occurring on or after November 2, 2015.

FOR FURTHER INFORMATION CONTACT: Lynn M. Powalski, General Counsel, 
Farm Credit System Insurance Corporation, 1501 Farm Credit Drive, 
McLean, Virginia 22102, (703) 883-4380, TTY (703) 883-4390.

SUPPLEMENTARY INFORMATION:

I. Background

    The Federal Civil Penalties Inflation Adjustment Act Improvements 
Act of 2015 (the 2015 Act) amended the Federal Civil Penalties 
Inflation Adjustment Act of 1990 (the Inflation Adjustment Act) \1\ to 
improve the effectiveness of civil monetary penalties and to maintain 
their deterrent effect. The Inflation Adjustment Act provides for the 
regular evaluation of CMPs and requires FCSIC, and every other Federal 
agency with authority to impose CMPs, to ensure that CMPs continue to 
maintain their deterrent values.\2\
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    \1\ Public Law 101-410, 104 Stat. 890 (Oct. 5, 1990), as amended 
by Public Law 104-134, title III, sec. 31001(s)(1), 110 Stat. 1321-
373 (Apr. 26, 1996); Public Law 105-362, title XIII, sec. 1301(a), 
112 Stat. 3293 (Nov. 10, 1998); Public Law 114-74, title VII, sec. 
701(b), 129 Stat. 599 (Nov. 2, 2015), codified at 28 U.S.C. 2461 
note.
    \2\ Under the amended Inflation Adjustment Act, a CMP is defined 
as any penalty, fine, or other sanction that: (1) Either is for a 
specific monetary amount as provided by Federal law or has a maximum 
amount provided for by Federal law; (2) is assessed or enforced by 
an agency pursuant to Federal law; and (3) is assessed or enforced 
pursuant to an administrative proceeding or a civil action in the 
Federal courts. All three requirements must be met for a fine to be 
considered a CMP.
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    FCSIC must enact regulations that annually adjust its CMPs pursuant 
to the inflation adjustment formula of the amended Inflation Adjustment 
Act and rounded using a method prescribed by the Inflation Adjustment 
Act. The new amounts are applicable to penalties assessed on or after 
January 15, 2024, for conduct occurring on or after November 2, 2015. 
Agencies do not have discretion in choosing whether to adjust a CMP, by 
how much to adjust a CMP, or the methods used to determine the 
adjustment.

II. CMPs Imposed Pursuant to Section 5.65 of the Farm Credit Act

    First, section 5.65(c) of the Farm Credit Act, as amended (Act), 
provides that any insured Farm Credit System bank that willfully fails 
or refuses to file any certified statement or pay any required premium 
shall be subject to a penalty of not more than $100 for each day that 
such violations continue, which penalty FCSIC may recover for its 
use.\3\ Second, section 5.65(d) of the Act provides that, except with 
the prior written consent of the Farm Credit Administration, it shall 
be unlawful for any person convicted of any criminal offense involving 
dishonesty or a breach of trust to serve as a director, officer, or 
employee of any System institution.\4\ For each willful violation of 
section 5.65(d), the institution involved shall be subject to a penalty 
of not more than $100 for each day during which the violation 
continues, which FCSIC may recover for its use.
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    \3\ 12 U.S.C. 2277a-14(c).
    \4\ 12 U.S.C. 2277a-14(d).
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    FCSIC's current Sec.  1411.1 provides that FCSIC can impose a 
maximum penalty of $249 per day for a violation under section 5.65(c) 
and (d) of the Act.

III. Required Adjustments

    The 2015 Act requires agencies to make annual adjustments for 
inflation. Annual inflation adjustments are based on the percent change 
between the October Consumer Price Index for all Urban Consumers (CPI-
U) preceding the date of the adjustment, and the prior year's October 
CPI-U. Consumer Price Index (CPI-U) for the month of October 2023, not 
seasonally adjusted, the cost-of-living adjustment multiplier for 2024 
is 1.03241.\5\ Multiplying 1.03241 times the current penalty amount of 
$249, after rounding to the nearest dollar as required by the 2015 Act, 
results in a new penalty amount of $257.
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    \5\ See Office of Mgmt. & Budget, Exec. Office of the President, 
OMB Memorandum No. M-24-07, Implementation of Penalty Inflation 
Adjustments for 2024, Pursuant to the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015 (December 19, 
2023).
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IV. Notice and Comment Not Required by Administrative Procedure Act

    In accordance with the 2015 Act, Federal agencies shall adjust 
civil monetary penalties ``notwithstanding'' section 553 of the 
Administrative Procedures Act. This means that public procedure 
generally required for agency rulemaking--notice, an opportunity for 
comment, and a delay in effective date--is not required for agencies to 
issue regulations implementing the annual adjustment.

List of Subjects in 12 CFR Part 1411

    Banks, Banking, Civil money penalties, Penalties.

    For the reasons stated in the preamble, part 1411 of chapter XIV, 
title 12 of the Code of Federal Regulations is amended as follows:

PART 1411--RULES OF PRACTICE AND PROCEDURE

0
1. The authority citation for part 1411 continues to read as follows:

    Authority:  12 U.S.C. 2277a-7(10), 2277a-14(copyright) and (d); 
28 U.S.C. 2461 note.

0
2. Revise Sec.  1411.1 to read as follows:


Sec.  1411.1   Inflation adjustment of civil money penalties for 
failure to file a certified statement, pay any premium required or 
obtain approval before employment of persons convicted of criminal 
offenses.

    In accordance with the Federal Civil Penalties Inflation Adjustment 
Act of 1990, as amended, a civil money penalty imposed pursuant to 
section 5.65(c) or (d) of the Farm Credit Act of 1971, as amended, 
shall not exceed $257 per day for each day the violation continues.

    Dated: January 5, 2024.
Ashley Waldron,
Secretary to the Board, Farm Credit System Insurance Corporation.
[FR Doc. 2024-00339 Filed 1-9-24; 8:45 am]
BILLING CODE 6710-01-P