This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

705 

Vol. 83, No. 5 

Monday, January 8, 2018 

1 78 FR 62018 (October 11, 2013). 2 80 FR 49082 (August 14, 2015). 

FEDERAL RESERVE SYSTEM 

12 CFR Part 217 

[Regulation Q; Docket Nos. R–1442; R– 

1460; and R–1535] 

RIN 7100–AD 87; RIN 7100–AD 99; and 7100 

AE–49 

Regulatory Capital Rules; Correction 

AGENCY: Board of Governors of the 

Federal Reserve System. 

ACTION: Final rule; correcting 

amendments. 

SUMMARY: The Board of Governors of the 

Federal Reserve System (Board) 

published a final rule in the Federal 

Register on October 11, 2013, regarding 

Regulatory Capital Rules. This 

publication corrects a typographical 

error in those rules whereby a transition 

provision was unintentionally deleted. 

The Board also published inconsistent 

amendments to Regulation Q in final 

rules published in the Federal Register 

on May 1, 2014, and August 14, 2015, 

that pertain to firms identified as global 

systemically important bank holding 

companies (GSIBs). This publication 

resolves these inconsistencies. 

DATES: These correcting amendments 

are effective January 8, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Benjamin McDonough, Assistant 

General Counsel, (202) 452–2036, or 

Mark Buresh, Senior Attorney, (202) 

452–5270, Legal Division, Board of 

Governors of the Federal Reserve 

System, 20th Street and Constitution 

Avenue NW, Washington, DC 20551. 

Telecommunications Device for the Deaf 

(TDD) users may contact (202) 263– 

4869. 

SUPPLEMENTARY INFORMATION: The Board 

is correcting an error in the final rule 

that was published in the Federal 

Register on October 11, 2013.1 The 

Board is correcting a typographical error 

in this final rule that caused the 

unintended deletion of 12 CFR 

217.300(c)(1)(i)–(iv), which was initially 

adopted by the Board on July 2, 2013. 

Through this correction, the provision 

pertaining to the grandfathering of 

certain non-qualifying capital 

instruments in tier 2 capital for 

depository institution holding 

companies with $15 billion or more in 

total assets as of December 31, 2009, 

that are not advanced approaches 

banking organizations and for 

depository institution holding 

companies that are advanced 

approaches banking organization would 

be reflected in the rule. 

The Board is also correcting 

conflicting amendments in final rules 

published in the Federal Register on 

May 1, 2014, (79 FR 24528) and August 

14, 2015, (80 FR 49082). The May 1, 

2014, final rule amended 12 CFR 

217.11(a)(4)(ii) effective January 1, 2018. 

The August 14, 2015, final rule also 

amended 12 CFR 217.11(a)(4)(ii) 

effective December 1, 2015, and did not 

alter the amendments to that paragraph 

contained in the May 1, 2014, final rule, 

which are effective on January 1, 2018. 

As a result, without these corrections 

the revisions to 12 CFR 217.11(a)(4)(ii) 

that were effective December 1, 2015, 

would have been undone effective 

January 1, 2018. This would have been 

contrary to the Board’s stated intent in 

the August 14, 2015, final rule that the 

GSIB surcharge augment the capital 

conservation buffer.2 In addition, this 

would have created situations where 12 

CFR 217.11(a)(4)(i) and 12 CFR 

217.11(a)(4)(ii) were in conflict. 

List of Subjects in 12 CFR Part 217 

Administrative practice and 

procedure, Banks, Banking, Holding 

companies, Reporting and 

recordkeeping requirements, Securities. 

For the reasons set forth in the 

preamble, chapter II of title 12 of the 

Code of Federal Regulations is amended 

by the following correcting 

amendments. 

PART 217—CAPITAL ADEQUACY OF 

BANK HOLDING COMPANIES, 

SAVINGS AND LOAN HOLDING 

COMPANIES, AND STATE MEMBER 

BANKS (REGULATION Q) 

■ 1. The authority citation for part 217 

continues to read as follows: 

Authority: 12 U.S.C. 248(a), 321–338a, 

481–486, 1462a, 1467a, 1818, 1828, 1831n, 

1831o, 1831p–l, 1831w, 1835, 1844(b), 1851, 

3904, 3906–3909, 4808, 5365, 5368, 5371. 

■ 2. In § 217.11, paragraph (a)(4)(ii) is 

revised to read as follows: 

§ 217.11 Capital conservation buffer, 

countercyclical capital buffer amount, and 

GSIB surcharge. 

(a) * * * 

(4) * * * 

(ii) A Board-regulated institution with 

a capital conservation buffer that is 

greater than 2.5 percent plus 100 

percent of its applicable countercyclical 

capital buffer in accordance with 

paragraph (b) of this section, and 100 

percent of its applicable GSIB surcharge, 

in accordance with paragraph (c) of this 

section, and, if applicable, that has a 

leverage buffer that is greater than 2.0 

percent, in accordance with paragraph 

(d) of this section, is not subject to a 

maximum payout amount under this 

section. 

* * * * * 

■ 3. In § 217.300, add paragraphs 

(c)(1)(i) through (iv) to read as follows: 

§ 217.300 Transitions. 

* * * * * 

(c) * * * 

(1) * * * 

(i) A depository institution holding 

company of $15 billion or more may 

include in tier 1 and tier 2 capital nonqualifying capital instruments up to the 

applicable percentage set forth in Table 

8 to § 217.300 of the aggregate 

outstanding principal amounts of nonqualifying tier 1 and tier 2 capital 

instruments, respectively, that are 

outstanding as of January 1, 2014, 

beginning January 1, 2014, for a 

depository institution holding company 

of $15 billion or more that is an 

advanced approaches Board-regulated 

institution that is not a savings and loan 

holding company, and beginning 

January 1, 2015, for all other depository 

institution holding companies of $15 

billion or more. 

(ii) A depository institution holding 

company of $15 billion or more must 

apply the applicable percentages set 

forth in Table 8 to § 217.300 separately 

to the aggregate amounts of its tier 1 and 

tier 2 non-qualifying capital 

instruments. 

(iii) The amount of non-qualifying 

capital instruments that must be 

excluded from additional tier 1 capital 


jstallworth on DSKBBY8HB2PROD with RULES
706 Federal Register / Vol. 83, No. 5 / Monday, January 8, 2018 / Rules and Regulations 

in accordance with this section may be 

included in tier 2 capital without 

limitation, provided the instruments 

meet the criteria for tier 2 capital set 

forth in § 217.20(d). 

(iv) Non-qualifying capital 

instruments that do not meet the criteria 

for tier 2 capital set forth in § 217.20(d) 

may be included in tier 2 capital as 

follows: 

(A) A depository institution holding 

company of $15 billion or more that is 

not an advanced approaches Boardregulated institution may include nonqualifying capital instruments that have 

been phased-out of tier 1 capital in tier 

2 capital, and 

(B) During calendar years 2014 and 

2015, a depository institution holding 

company of $15 billion or more that is 

an advanced approaches Boardregulated institution may include nonqualifying capital instruments in tier 2 

capital that have been phased out of tier 

1 capital in accordance with Table 8 to 

§ 217.300. Beginning January 1, 2016, a 

depository institution holding company 

of $15 billion or more that is an 

advanced approaches Board-regulated 

institution may include non-qualifying 

capital instruments in tier 2 capital that 

have been phased out of tier 1 capital 

in accordance with Table 8, up to the 

applicable percentages set forth in Table 

9 to § 217.300. 

* * * * * 

By order of the Board of Governors of the 

Federal Reserve System, acting through the 

Secretary of the Board under delegated 

authority, December 29, 2017. 

Ann E. Misback, 

Secretary of the Board. 

[FR Doc. 2018–00062 Filed 1–5–18; 8:45 am] 

BILLING CODE 6210–01–P 

DEPARTMENT OF COMMERCE 

Office of the Secretary 

15 CFR Part 6 

[Docket No. 171219999–7999–01] 

RIN 0605–AA48 

Civil Monetary Penalty Adjustments for 

Inflation 

AGENCY: Office of the Chief Financial 

Officer and Assistant Secretary for 

Administration, Department of 

Commerce. 

ACTION: Final rule. 

SUMMARY: This final rule is being issued 

to adjust for inflation each civil 

monetary penalty (CMP) provided by 

law within the jurisdiction of the United 

States Department of Commerce 

(Department of Commerce). The Federal 

Civil Penalties Inflation Adjustment Act 

of 1990, as amended by the Debt 

Collection Improvement Act of 1996 

and the Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 

2015, required the head of each agency 

to adjust for inflation its CMP levels in 

effect as of November 2, 2015, under a 

revised methodology that was effective 

for 2016 which provided for initial 

catch up adjustments for inflation in 

2016, and requires adjustments for 

inflation to CMPs under a revised 

methodology for each year thereafter. 

The 2017 adjustments for inflation to 

CMPs to the Department of Commerce’s 

CMPs were published in the Federal 

Register on December 28, 2016 and 

became effective January 15, 2017. The 

revised annual methodology provides 

for the improvement of the effectiveness 

of CMPs and to maintain their deterrent 

effect. Agencies’ annual adjustments for 

inflation to CMPs shall take effect not 

later than January 15. The Department 

of Commerce’s 2018 adjustments for 

inflation to CMPs apply only to CMPs 

with a dollar amount, and will not 

apply to CMPs written as functions of 

violations. The Department of 

Commerce’s 2018 adjustments for 

inflation to CMPs apply only to those 

CMPs, including those whose associated 

violation predated such adjustment, 

which are assessed by the Department of 

Commerce after the effective date of the 

new CMP level. 

DATES: This rule is effective January 15, 

2018. 

FOR FURTHER INFORMATION CONTACT: 

Stephen Kunze, Deputy Chief Financial 

Officer and Director for Financial 

Management, Office of Financial 

Management, at (202) 482–1207, 

Department of Commerce, 1401 

Constitution Avenue NW, Room D200, 

Washington, DC 20230. The Department 

of Commerce’s Civil Monetary Penalty 

Adjustments for Inflation are available 

for downloading from the Department of 

Commerce, Office of Financial 

Management’s website at the following 

address: http://www.osec.doc.gov/ofm/ 

OFM_Publications.html. 

SUPPLEMENTARY INFORMATION: 

Background 

The Federal Civil Penalties Inflation 

Adjustment Act of 1990 (Pub. L. 101– 

410; 28 U.S.C. 2461), as amended by the 

Debt Collection Improvement Act of 

1996 (Pub. L. 104–134), provided for 

agencies’ adjustments for inflation to 

CMPs to ensure that CMPs continue to 

maintain their deterrent value and that 

CMPs due to the Federal Government 

were properly accounted for and 

collected. On October 24, 1996, 

November 1, 2000, December 14, 2004, 

December 11, 2008, and December 7, 

2012, the Department of Commerce 

published in the Federal Register a 

schedule of CMPs adjusted for inflation 

as required by law. 

A CMP is defined as any penalty, fine, 

or other sanction that: 

1. Is for a specific monetary amount 

as provided by Federal law, or has a 

maximum amount provided for by 

Federal law; and, 

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. 

On November 2, 2015, the Federal 

Civil Penalties Inflation Adjustment Act 

Improvements Act of 2015 (Section 701 

of Pub. L. 114–74) further amended the 

Federal Civil Penalties Inflation 

Adjustment Act of 1990 to improve the 

effectiveness of CMPs and to maintain 

their deterrent effect. This amendment 

(1) required agencies to adjust the CMP 

levels in effect as of November 2, 2015, 

with initial catch up adjustments for 

inflation through a final rulemaking to 

take effect no later than August 1, 2016; 

and (2) requires agencies to make 

subsequent annual adjustments for 

inflation to CMPs that shall take effect 

not later than January 15. 

The Department of Commerce’s initial 

catch up adjustments for inflation to 

CMPs were published in the Federal 

Register on June 7, 2016, and the new 

CMP levels became effective July 7, 

2016. The Department of Commerce’s 

2017 adjustments for inflation to CMPs 

were published in the Federal Register 

on December 28, 2016, and the new 

CMP levels became effective January 15, 

2017. 

The Department of Commerce’s 2018 

adjustments for inflation to CMPs apply 

only to CMPs with a dollar amount, and 

will not apply to CMPs written as 

functions of violations. These 2018 

adjustments for inflation to CMPs apply 

only to those CMPs, including those 

whose associated violation predated 

such adjustment, which are assessed by 

the Department of Commerce after the 

effective date of the new CMP level. 

This regulation adjusts for inflation 

CMPs that are provided by law within 

the jurisdiction of the Department of 

Commerce. The actual CMP assessed for 

a particular violation is dependent upon 

a variety of factors. For example, the 

National Oceanic and Atmospheric 

Administration’s (NOAA) Policy for the 

Assessment of Civil Administrative 

Penalties and Permit Sanctions (Penalty 

Policy), a compilation of NOAA internal 

guidelines that are used when assessing 


jstallworth on DSKBBY8HB2PROD with RULES