[Federal Register Volume 74, Number 41 (Wednesday, March 4, 2009)]
[Rules and Regulations]
[Pages 9349-9351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-4608]


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NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 747


Civil Monetary Penalty Inflation Adjustment

AGENCY: National Credit Union Administration.

ACTION: Final rule.

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SUMMARY: The National Credit Union Administration (NCUA) is amending 
its rules of practice and procedure to adjust the maximum amount of 
each civil money penalty (CMP) within its jurisdiction to account for 
inflation. This action, including the amount of the adjustment, is 
required under the Federal Civil Penalties Inflation Adjustment Act of 
1990, as amended by the Debt Collection Improvement Act of 1996.

DATES: Effective Date: March 4, 2009.

FOR FURTHER INFORMATION CONTACT: John K. Ianno, Associate General 
Counsel, or Jon Canerday, Trial Attorney, Office of General Counsel, 
NCUA, 1775 Duke Street, Alexandria, Virginia 22314, or telephone (703) 
518-6540.

SUPPLEMENTARY INFORMATION:

A. Background

    The Debt Collection Improvement Act of 1996 \1\ (DCIA) amended the 
Federal Civil Penalties Inflation Adjustment Act of 1990 \2\ (FCPIA 
Act) to require every Federal agency to enact regulations that adjust 
each civil monetary penalty (CMP) provided by law under its 
jurisdiction by the rate of inflation at least once every 4 years. 
These periodic adjustments are to be calculated pursuant to the 
inflation adjustment formula in section 5(b) of the FCPIA Act. Section 
6 of the FCPIA Act specifies that inflation-adjusted CMPs will only 
apply to violations that occur after the effective date of the 
adjustment.
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    \1\ Public Law 104-134, 31001(s), 110 Stat. 1321-373, (Apr. 26, 
1996). The provision is codified at 28 U.S.C. 2461 note.
    \2\ Public Law 101-410, 104 Stat. 890, (Oct. 5, 1990), also 
codified at 28 U.S.C. 2461 note.
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    The inflation adjustment is based on the percentage increase in the 
Consumer Price Index for all urban consumers (CPI-U) published by the 
Department of Labor.\3\ Specifically, section 5(b) of the FCPIA Act 
defines the term ``cost-of-living adjustment'' as ``the percentage (if 
any) for each civil monetary penalty by which--(1) the Consumer Price 
Index for the month of June of the calendar year preceding the 
adjustment, exceeds (2) the Consumer Price Index for the month of June 
of the calendar year in which the amount of such civil monetary penalty 
was last set or adjusted pursuant to law.'' The amount of each 
inflation adjustment must then be rounded to a number prescribed by 
section 5(a) of the FCPIA Act.
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    \3\ The CPI-U is published by the Department of Labor, Bureau of 
Labor Statistics, and is available at its Web site: http://www.bls.gov/cpi/.
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B. Mathematical Calculations of the Adjustments

    NCUA last adjusted the CMPs it is authorized to impose in 2004. 69 
FR 60080. Accordingly, the current adjustment of these CMPs will be the 
percentage by which the CPI-U for the month of June 2007 exceeds the 
CPI-U for the month of June 2004. According to the Bureau of Labor 
Statistics, the CPI-U for the month of June 2004 was 189.7 and the CPI-
U for the month of June 2007 was 208.352. The percentage by which the 
2007 figure exceeds the 2004 figure is 9.8 percent. Thus, the CMPs 
should be multiplied by 9.8 percent, the resulting dollar amount 
rounded up or down according to the rounding requirements of the FCPIA 
Act, and then that amount added to the current penalty. In some cases, 
the rounding rules resulted in no adjustment to the amount of the CMP.
    In previous years, the Board has explained in detail the adjustment 
procedure for each of the CMPs under its jurisdiction. Detailed 
explanations were provided because some CMPs were adjusted for the 
first time, requiring the use of different formulas. In view of the 
fact that all of the CMPs were last adjusted in 2004, such detailed 
explanations are no longer necessary. For that reason, and to be 
consistent with the other banking agencies, the Board will show the 
adjustments in table format. The following table shows both the present 
CMPs, the adjustment methodology, and the CMPs after being adjusted for 
inflation. The table published in 12 CFR 747.1001 shows only the 
adjusted CMPs, not the calculations.

[[Page 9350]]



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                                                                                                     Amount of      Amount of
                                      Tier or description (if      Current maximum      Percentage    increase   increase--after     Adjusted  maximum
         U.S. code citation                 applicable)         penalty (in dollars)     increase       (in        rounding \4\    penalty (in dollars)
                                                                                                      dollars)     (in dollars)
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12 U.S.C. 1782(a)(3)................  Inadvertent............  $2,200 \5\............          9.8         $216             $0    No Change.
                                      Non-inadvertent........  22,000................          9.8        2,156              0    No Change.
                                      Intentional or reckless  1,175,000 (or 1% of             9.8      115,150        125,000    $1,300,000 (or 1% of
                                                                total assets).                                                     total assets).
12 U.S.C. 1782(d)(2)................  Tier 1.................  2,200.................          9.8          216              0    No Change.
                                      Tier 2.................  22,000................          9.8        2,156              0    No Change.
                                      Tier 3.................  1,175,000 (or 1% of             9.8      115,150        125,000    1,300,000 (or 1% of
                                                                total assets).                                                     total assets).
12 U.S.C. 1785(e)(3)................  .......................  110...................          9.8           11              0    No Change.
12 U.S.C. 1786(k)(2)................  Tier 1.................  6,500.................          9.8          637          1,000    7,500.
                                      Tier 2.................  32,500................          9.8        3,185          5,000    37,500.
                                      Tier 3.................  1,250,000 (for natural          9.8      122,500        125,000    1,375,000 (for natural
                                                                person) 1,250,000 (or                                              person) 1,375,000 (or
                                                                1% of total assets)                                                1% of total assets)
                                                                (for CU).                                                          (for CU).
42 U.S.C. 4012a(f)..................  Per violation..........  385...................          9.8           38              0    No Change.
                                      Per year...............  120,000...............          9.8       11,760         10,000    130,000.
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    The NCUA Board now adopts this final rule to adjust the forgoing 
CMPs for the rate of inflation, as required by the FCPIA Act. As 
provided in the final rule, the revised CMP amounts will only apply to 
violations that occur after the effective date of the final rule.
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    \4\ The FCPIA Act's rounding rules require that an increase of a 
CMP be rounded to the nearest multiple of: $10 in the case of 
penalties less than or equal to $100; $100 in the case of penalties 
greater than $100 but less than or equal to $1,000; $1,000 in the 
case of penalties greater than $1,000 but less than or equal to 
$10,000; $5,000 in the case of penalties greater than $10,000 but 
less than or equal to $100,000; $10,000 in the case of penalties 
greater than $100,000 but less than or equal to $200,000; and 
$25,000 in the case of penalties greater than $200,000. Section 5(a) 
of the FCPIA Act, 28 U.S.C. 2461 note.
    \5\ Erroneously published in the Federal Register as $22,000.
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C. Regulatory Procedures

Final Rule Under the Administrative Procedures Act

    The FCPIA Act requires adjustments of CMPs for inflation to occur 
at least every four years. The FCPIA Act provides federal agencies with 
no discretion in the adjustment of CMPs for inflation. Thus, NCUA is 
unable to vary the amount of the adjustments to reflect any views or 
suggestions provided by commenters. Further, the regulation is 
ministerial and technical. For all of these reasons, the NCUA 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 requires NCUA to prepare an analysis 
to describe any significant economic impact a rule may have on a 
substantial number of small credit unions (those under ten million 
dollars in assets). This final rule would not have a significant 
economic impact on a substantial number of small credit unions, and, 
therefore, a regulatory flexibility analysis is not required.

Paperwork Reduction Act

    NCUA has determined that this final rule would not increase 
paperwork requirements under the Paperwork Reduction Act of 1995 and 
regulations of the Office of Management and Budget.

Executive Order 13132

    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their regulatory actions on state and local 
interests. In adherence to fundamental federalism principles, NCUA, an 
independent regulatory agency as defined in 44 U.S.C. 3502(5), 
voluntarily complies with the Executive Order. This final rule will 
apply to all federally-insured credit unions, but it will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among the various levels of government. NCUA has 
determined the final rule does not constitute a policy that has 
federalism implications for purposes of the Executive Order.

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

    NCUA has determined that this 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).

Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA) (Pub. L. 104-121) provides generally for congressional review 
of agency rules. A reporting requirement is triggered in instances 
where NCUA issues a final rule as defined by Section 551 of the 
Administrative Procedures Act. 5 U.S.C. 551. The Office of Management 
and Budget has reviewed this rule and has determined that for purposes 
of SBREFA, it is not a major rule.

List of Subjects in 12 CFR Part 747

    Credit unions, Civil monetary penalties.

    By the National Credit Union Administration Board on January 5, 
2009.
Mary Rupp,
Secretary of the Board.

0
Accordingly, the NCUA amends 12 CFR part 747 as follows:

[[Page 9351]]

PART 747--ADMINISTRATIVE ACTIONS, ADJUDICATIVE HEARINGS, RULES OF 
PRACTICE AND PROCEDURE, AND INVESTIGATIONS

0
1. The authority citation for part 747 continues to read as follows:

    Authority: 12 U.S.C. 1766, 1782, 1784, 1785, 1786, 1787; 42 
U.S.C. 4012a; Public Law 101-410; Public Law 104-134.


0
2. Subpart K is revised to read as follows:

Subpart K--Inflation Adjustment of Civil Monetary Penalties


Sec.  747.1001  Adjustment of civil money penalties by the rate of 
inflation.

    (a) NCUA is required by the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (Pub. L. 101-410, 104 Stat. 890, as amended (28 
U.S.C. 2461 note)) to adjust the maximum amount of each civil money 
penalty within its jurisdiction by the rate of inflation. The following 
chart displays those adjustments, as calculated pursuant to the 
statute:

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     U.S. code citation          CMP description     New maximum amount
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(1) 12 U.S.C. 1782(a)(3)....  Inadvertent failure   $2,200.
                               to submit a report
                               or the inadvertent
                               submission of a
                               false or misleading
                               report.
(2) 12 U.S.C. 1782(a)(3)....  Non-inadvertent       $22,000.
                               failure to submit a
                               report or the non-
                               inadvertent
                               submission of a
                               false or misleading
                               report.
(3) 12 U.S.C. 1782(a)(3)....  Failure to submit a   $1,300,000 or 1
                               report or the         percent of the
                               submission of a       total assets of the
                               false or misleading   credit union,
                               report done           whichever is less.
                               knowingly or with
                               reckless disregard.
(4) 12 U.S.C. 1782(d)(2)(A).  First tier..........  $2,200.
(5) 12 U.S.C. 1782(d)(2)(B).  Second tier.........  $22,000.
(6) 12 U.S.C. 1782(d)(2)(C).  Third tier..........  $1,300,000 or 1
                                                     percent of the
                                                     total assets of the
                                                     credit union,
                                                     whichever is less.
(7) 12 U.S.C. 1785(e)(3)....  Non-compliance with   $110.
                               NCUA security
                               regulations.
(8) 12 U.S.C. 1786(k)(2)(A).  First tier..........  $7,500.
(9) 12 U.S.C. 1786(k)(2)(B).  Second tier.........  $37,500.
(10) 12 U.S.C. 1786(k)(2)(C)  Third tier..........  For a person other
                                                     than an insured
                                                     credit union:
                                                     $1,375,000;
                                                    For an insured
                                                     credit union:
                                                     $1,375,000 or 1
                                                     percent of the
                                                     total assets of the
                                                     credit union,
                                                     whichever is less.
(11) 42 U.S.C. 4012a(f).....  Per violation.......  $385.
                              Per calendar year...  $130,000.
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    (b) The adjustments displayed in paragraph (a) of this section 
apply to acts occurring after the date of publication in the Federal 
Register.

 [FR Doc. E9-4608 Filed 3-3-09; 8:45 am]
BILLING CODE 7535-01-P