Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 1519 

1Public Law 114–74, sec. 701, 129 Stat. 584. 

2See, 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). 

3For example, Section 8(i)(2) of the FDIA, 12 

U.S.C. 1818(i)(2), provides for three tiers of CMPs, 

with the size of such CMPs increasing with the 

gravity of the misconduct. 

4Section 2 of the Federal Civil Penalties Inflation 

Adjustment Act of 1990 (1990 Adjustment Act). 

Public Law 101–410, 104 Stat. 890 (amended 2015) 

(codified as amended at 28 U.S.C. 2461 note). 

5 Id. 

6See, e.g., 77 FR 74573 (Dec. 17, 2012). 

7See Public Law 114–74, sec. 701, 129 Stat. 584. 

8See id. at sec. 701(b). 

9See Public Law 101–410, sec. 3(2), 104 Stat. 890 

(amended 2015) (codified as amended at 28 U.S.C. 

2461 note). 

10Public Law 114–74, sec. 701(b), 129 Stat. 584. 

11 63 FR 30227 (June 3, 1998). 

12Public Law 114–74, sec. 701(b), 129 Stat. 584 

(emphasis added). 

13See OMB, Implementation of Penalty Inflation 

Adjustments for 2018, Pursuant to the Federal Civil 

Penalties Inflation Adjustment Act Improvements 

Act of 2015, M–18–03 (Dec. 15, 2017), available at 

https://www.whitehouse.gov/wp-content/uploads/ 

2017/11/M-18-03.pdf (noting that the applicable 

2018 CMP-adjustment multiplier is 1.02041). 

14The CPI–U is compiled by the Bureau of Labor 

Statistics of the Department of Labor. 

§ 109.103 Civil money penalties. 

* * * * * 

(c) Maximum amount of civil money 

penalties—(1) Statutory formula. The 

OCC 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 costof-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. 

The OCC will publish notice in the 

Federal Register of the maximum 

penalties which may be assessed on an 

annual basis on, or before, January 15 of 

each calendar year based on the formula 

in paragraph (a) of this section, for 

penalties assessed on, or after, the date 

of publication of the most recent notice 

related to conduct occurring on or after 

November 2, 2015. 

Dated: January 9, 2018. 

Karen Solomon, 

Acting Senior Deputy Comptroller and Chief 

Counsel, Office of the Comptroller of the 

Currency. 

[FR Doc. 2018–00536 Filed 1–11–18; 8:45 am] 

BILLING CODE 4810–33–P 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 308 

RIN 3064–AE71 

Rules of Practice and Procedure 

AGENCY: Federal Deposit Insurance 

Corporation (FDIC). 

ACTION: Final rule. 

SUMMARY: The FDIC is adjusting the 

maximum amount of each civil money 

penalty (CMP) within its jurisdiction to 

account for inflation. This action is 

required by the Federal Civil Penalties 

Inflation Adjustment Act Improvements 

Act of 2015 (2015 Adjustment Act). 

DATES: This rule is effective January 15, 

2018. 

FOR FURTHER INFORMATION CONTACT: Seth 

P. Rosebrock, Supervisory Counsel, 

Legal Division (202) 898–6609, or 

Graham N. Rehrig, Senior Attorney, 

Legal Division (202) 898–3829. 

SUPPLEMENTARY INFORMATION: 

I. Policy Objectives 

The Final Rule changes the maximum 

limit for CMPs according to inflation as 

mandated by Congress in the 2015 

Adjustment Act.1 The intended effect of 

annually adjusting maximum civil 

money penalties in accordance with 

changes in the Consumer Price Index is 

to minimize any distortion in the real 

value of those maximums due to 

inflation, thereby promoting a more 

consistent deterrent effect in the 

structure of CMPs. 

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 

established maximum penalties that 

could be assessed under these statutes. 

In many cases, these statutes contain 

multiple penalty tiers, permitting the 

assessment of penalties at various levels 

depending upon the severity of the 

misconduct at issue.3

In 1990, Congress determined that the 

assessment of CMPs plays ‘‘an 

important role in deterring violations 

and furthering the policy goals 

embodied in such laws and regulations’’ 

and concluded that ‘‘the impact of many 

civil monetary penalties has been and is 

diminished due to the effect of 

inflation.’’ 4 Consequently, Congress 

required federal agencies with authority 

to impose CMPs to periodically adjust 

by rulemaking the maximum CMPs 

which these agencies were authorized to 

impose in order to ‘‘maintain the 

deterrent effect of civil monetary 

penalties and promote compliance with 

the law.’’ 5 Under the 1990 Adjustment 

Act, the FDIC adjusted its CMP amounts 

every four years.6

In 2015, Congress revised the process 

by which federal agencies adjust 

applicable CMPs for inflation.7 Under 

the 2015 Adjustment Act, the FDIC is 

required to make annual adjustments for 

inflation.8 These adjustments apply to 

all CMPs covered by the 2015 

Adjustment Act.9 The 2015 Adjustment 

Act requires annual adjustments to be 

made by January 15 of each year.10

Although the 2015 Adjustment Act 

increases the maximum penalty that 

may be assessed under each applicable 

statute, the FDIC possesses discretion to 

impose CMP amounts below the 

maximum level in accordance with the 

severity of the misconduct at issue. For 

example, when making a determination 

as to the appropriate level of a penalty 

assessed under section 8(i)(2) of the 

FDIA, 12 U.S.C. 1818(i)(2), the FDIC is 

guided by statutory factors set forth in 

section 8(i)(2)(G) of the FDIA, 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.11 Such 

factors include, but are not limited to, 

the gravity and duration of the 

misconduct, and the intent related to 

the misconduct. 

The 2015 Adjustment Act notes that 

the FDIC ‘‘shall adjust [CMPs] and shall 

make the adjustment notwithstanding 

section 553 of title 5, United States 

Code’’ (the Administrative Procedure 

Act).12 The FDIC, therefore, is not 

obligated to publish the adjustments 

through notice-and-comment 

rulemaking, and the FDIC is publishing 

the adjustments through a final rule. 

III. Description and Expected Effects of 

the Final Rule 

The Final Rule modifies the 

maximum limit for CMPs according to 

inflation as mandated by Congress in 

the 2015 Adjustment Act. The 2015 

Adjustment Act directs federal agencies 

to follow guidance issued by the Office 

of Management and Budget (OMB) on 

December 15, 2017 (OMB Guidance), 

when calculating new maximum 

penalty levels.13 The adjustments are to 

be based on the percent change between 

the Consumer Price Index for all Urban 

Consumers (CPI–U)14 for October 2016 

and the October 2017 CPI–U. 


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1520 Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 

15Under the 1990 Adjustment Act, adjustments 

have been made only to CMPs that are for specific 

dollar amounts or maximums. CMPs that are 

assessed based upon a fixed percentage of an 

institution’s total assets are not subject to 

adjustment. 

16As noted previously, the FDIC retains 

discretion to impose CMPs in amounts below the 

referenced maximums. 

17See OMB Guidance at 4. 

Summary of the FDIC’s Calculations 

During the 12-month period ending 

October 2017, the CPI–U was reported 

to have increased by 2.041 percent. In 

keeping with the OMB Guidance, the 

FDIC adjusted each of its CMP 

maximum penalty levels by the inflation 

factor.15 After applying the adjustment, 

the FDIC rounded each penalty level to 

the nearest dollar. In making these 

calculations, the FDIC consulted with 

staff from the Office of the Comptroller 

of the Currency, the Board of Governors 

for the Federal Reserve System, the 

National Credit Union Administration, 

and the Bureau of Consumer Financial 

Protection to ensure that the FDIC’s 

adjusted figures were consistent with 

these regulators’ respective amounts. 

The Adjusted CMP Amounts 

The following chart displays the 

adjusted CMP amounts for each CMP 

identified in 12 CFR part 308.16 The 

following chart reflects the maximum 

CMP amounts that may be assessed after 

January 15, 2018—the effective date of 

the 2018 annual adjustment—including 

assessments whose associated violations 

occurred on or after November 2, 

2015.17

MAXIMUM CIVIL MONEY PENALTY AMOUNTS

U.S. Code citation Current maximum CMP 

(through January 14, 2018) 

Adjusted maximum CMP 

(beginning January 15, 2018) 

12 U.S.C. 1464(v): 

Tier One CMP .................................................................................. $3,849 $3,928 

Tier Two CMP .................................................................................. 38,492 39,278 

Tier Three CMP ................................................................................ 1,924,589 1,963,870 

12 U.S.C. 1467(d) .................................................................................... 9,623 9,819 

12 U.S.C. 1817(a): 

Tier One CMP .................................................................................. 3,849 3,928 

Tier Two CMP .................................................................................. 38,492 39,278 

Tier Three CMP ................................................................................ 1,924,589 1,963,870 

12 U.S.C. 1817(c): 

Tier One CMP .................................................................................. 3,519 3,591 

Tier Two CMP .................................................................................. 35,186 35,904 

Tier Three CMP ................................................................................ 1,759,309 1,795,216 

12 U.S.C. 1818(i)(2): 

Tier One CMP .................................................................................. 9,623 9,819 

Tier Two CMP .................................................................................. 48,114 49,096 

Tier Three CMP ................................................................................ 1,924,589 1,963,870 

12 U.S.C. 1820(e)(4) ............................................................................... 8,797 8,977 

12 U.S.C. 1820(k)(6) ............................................................................... 316,566 323,027 

12 U.S.C. 1828(a)(3) ............................................................................... 120 122 

12 U.S.C. 1828(h): 

For assessments <$10,000 .............................................................. 120 122 

12 U.S.C. 1829b(j) ................................................................................... 20,111 20,521 

12 U.S.C. 1832(c) .................................................................................... 2,795 2,852 

12 U.S.C. 1884 ........................................................................................ 279 285 

12 U.S.C. 1972(2)(F): 

Tier One CMP .................................................................................. 9,623 9,819 

Tier Two CMP .................................................................................. 48,114 49,096 

Tier Three CMP ................................................................................ 1,924,589 1,963,870 

12 U.S.C. 3909(d) .................................................................................... 2,394 2,443 

15 U.S.C. 78u-2: 

Tier One CMP (individuals) .............................................................. 9,054 9,239 

Tier One CMP (others) ..................................................................... 90,535 92,383 

Tier Two CMP (individuals) .............................................................. 90,535 92,383 

Tier Two CMP (others) ..................................................................... 452,677 461,916 

Tier Three CMP (individuals) ........................................................... 181,071 184,767 

Tier Three penalty (others) ............................................................... 905,353 923,831 

15 U.S.C. 1639e(k): 

First violation .................................................................................... 11,053 11,279 

Subsequent violations ...................................................................... 22,105 22,556 

31 U.S.C. 3802 ........................................................................................ 10,957 11,181 

42 U.S.C. 4012a(f) ................................................................................... 2,090 2,133 

CFR Citation Current maximum amount 

(through January 14, 2018) 

New maximum amount 

(beginning January 15, 2018) 

12 CFR 308.132(c)—Late or Misleading Reports of Condition and Income (Call Reports): 

First Offense: 

$25 million or more assets: 

1 to 15 days late ................................................................ 527 538 

16 or more days late .......................................................... 1,056 1,078 


sradovich on DSK3GMQ082PROD with RULES
Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 1521 

18Public Law 114–74, sec. 701(b), 129 Stat. 584. 

19 12 U.S.C. 4802. 

20 5 U.S.C. 603. 

21 5 U.S.C. 801 et seq. 

22Public Law 105–277, 112 Stat. 2681 (1998). 

23 44 U.S.C. 3501 et seq. 

24Public Law 106–102, 113 Stat. 1338 (Nov. 12, 

1999). 

CFR Citation Current maximum amount 

(through January 14, 2018) 

New maximum amount 

(beginning January 15, 2018) 

Less than $25 million assets 

1 to 15 days late ................................................................ 176 180 

16 or more days late .......................................................... 352 359 

Subsequent Offenses: 

$25 million or more assets: 

1 to 15 days late ................................................................ 879 897 

16 or more days late .......................................................... 1,759 1,795 

The Expected Effects of the CMP 

Adjustments 

These CMP adjustments are expected 

to minimize any year-to-year distortions 

in the real value of the CMP maximums. 

Additionally, these adjustments will 

promote a more consistent deterrent 

effect in the structure of CMPs. As 

previously noted, the FDIC retains 

discretion to impose CMP amounts 

below the maximum level. The actual 

number and size of CMPs assessed in 

the future will depend on the 

propensity and severity of the violations 

committed by banks and institutionaffiliated parties, as well as the 

particular statute that is at issue. Such 

future violations cannot be reliably 

forecast. It is expected that the FDIC 

will continue to exercise its discretion 

to impose CMPs that are appropriate to 

their severity. 

The 2015 Adjustment Act will likely 

result in a minimal increase in 

administrative costs for the FDIC in 

order to establish new inflation-adjusted 

maximum CMPs each year. Because 

these calculations are relatively simple, 

the number of labor hours necessary to 

perform this task is likely to be 

insignificant relative to total 

enforcement labor hours for the 

Corporation. 

IV. Alternatives Considered 

The 2015 Adjustment Act mandates 

the frequency of the inflation 

adjustment and the measure of inflation 

to be used in making these adjustments. 

This statute also provides that the FDIC 

is not required to proceed through 

notice-and-comment rulemaking under 

the Administrative Procedure Act in 

making annual CMP adjustments. 

Therefore, the FDIC has not considered 

alternatives to the CMP Adjustments. 

V. Request for Comment 

The 2015 Adjustment Act requires the 

FDIC to adjust its maximum CMP 

amounts ‘‘notwithstanding section 553 

of title 5, United States Code,’’ 18 and 

provides the specific adjustments to be 

made. Moreover, the CMP Adjustments 

and the revisions to the CFR are 

ministerial and technical; therefore, the 

FDIC is not required to complete a 

notice-and-comment rulemaking 

process prior to making the adjustments. 

VI. Regulatory Analysis 

Riegle Community Development and 

Regulatory Improvement Act 

Section 302 of the Riegle Community 

Development and Regulatory 

Improvement Act 19 generally requires 

that regulations prescribed by federal 

banking agencies which impose 

additional reporting, disclosures, or 

other new requirements on insured 

depository institutions take effect on the 

first day of a calendar quarter unless the 

regulation is required to take effect on 

another date pursuant to another act of 

Congress or the agency determines for 

good cause that the regulation should 

become effective on an earlier date. 

This Final Rule does not impose any 

new or additional reporting, disclosures, 

or other requirements on insured 

depository institutions. Therefore, the 

Final Rule is not subject to the 

requirements of this statute. 

Regulatory Flexibility Act 

An initial regulatory flexibility 

analysis under the Regulatory 

Flexibility Act 20 (RFA) is required only 

when an agency must publish a general 

notice of proposed rulemaking. As 

noted above, the FDIC determined that 

publication of a notice of proposed 

rulemaking is not necessary for the 

Final Rule. Accordingly, the RFA does 

not require an initial regulatory 

flexibility analysis. Nevertheless, the 

FDIC considered the likely impact of 

Final Rule on small entities. From 2011 

through 2016, on average, only 1.4 

percent of FDIC-supervised institutions 

were ordered to pay a CMP each year. 

Accordingly, the FDIC believes that the 

Final Rule will not have a significant 

impact on a substantial number of small 

entities. 

Small Business Regulatory Enforcement 

Fairness Act 

The OMB has determined that the 

Final Rule is not a ‘‘major rule’’ within 

the meaning of the relevant sections of 

the Small Business Regulatory 

Enforcement Act of 1996 (SBREFA).21

As required by SBREFA, the FDIC will 

submit the Final Rule and other 

appropriate reports to Congress and the 

Government Accountability Office for 

review. 

The Omnibus Consolidated and 

Emergency Supplemental 

Appropriations Act, 1999: Assessment 

of Federal Regulations and Policies on 

Families 

The FDIC determined that the Final 

Rule will not affect family wellbeing 

within the meaning of section 654 of the 

Omnibus Consolidated and Emergency 

Supplemental Appropriations Act, 

1999.22

Paperwork Reduction Act 

The Final Rule does not create any 

new, or revise any existing, collections 

of information under section 3504(h) of 

the Paperwork Reduction Act of 1980.23

Consequently, no information collection 

request will be submitted to the OMB 

for review. 

Plain Language Act 

Section 722 of the Gramm-LeachBliley Act requires the FDIC to use plain 

language in all proposed and final rules 

published after January 1, 2000.24

Accordingly, the FDIC has attempted to 

write the Final Rule in clear and 

comprehensible language. 

List of Subjects in 12 CFR Part 308 

Administrative practice and 

procedure, Banks, Banking, Claims, 

Crime, Equal access to justice, Ex parte 

communications, Hearing procedure, 

Lawyers, Penalties, State nonmember 

banks. 


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1522 Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 

For the reasons set forth in the 

preamble, the FDIC amends 12 CFR part 

308 as follows: 

PART 308—RULES OF PRACTICE AND 

PROCEDURE 

■ 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. 

■ 2. Revise § 308.116(b)(4) to read as 

follows: 

§ 308.116 Assessment of penalties. 

* * * * * 

(b) * * * 

(4) Adjustment of civil money 

penalties by the rate of inflation 

pursuant to the Federal Civil Penalties 

Inflation Adjustment Act Improvements 

Act of 2015. After January 15, 2018, for 

violations that occurred on or after 

November 2, 2015: 

(i) Any person who has engaged in a 

violation as set forth in paragraph (b)(1) 

of this section shall forfeit and pay a 

civil money penalty of not more than 

$9,819 for each day the violation 

continued. 

(ii) Any person who has engaged in a 

violation, unsafe or unsound practice or 

breach of fiduciary duty, as set forth in 

paragraph (b)(2) of this section, shall 

forfeit and pay a civil money penalty of 

not more than $49,096 for each day such 

violation, practice or breach continued. 

(iii) Any person who has knowingly 

engaged in a violation, unsafe or 

unsound practice or breach of fiduciary 

duty, as set forth in paragraph (b)(3) of 

this section, shall forfeit and pay a civil 

money penalty not to exceed: 

(A) In the case of a person other than 

a depository institution—$1,963,870 per 

day for each day the violation, practice 

or breach continued; or 

(B) In the case of a depository 

institution—an amount not to exceed 

the lesser of $1,963,870 or one percent 

of the total assets of such institution for 

each day the violation, practice or 

breach continued. 

* * * * * 

■ 3. Revise § 308.132(d) to read as 

follows: 

§ 308.132 Assessment of penalties. 

* * * * * 

(d) Maximum civil money penalty 

amounts. Pursuant to the Federal Civil 

Penalties Inflation Adjustment Act 

Improvements Act of 2015, after January 

15, 2018, for violations that occurred on 

or after November 2, 2015, the Board of 

Directors or its designee may assess civil 

money penalties in the maximum 

amounts as follows: 

(1) Civil money penalties assessed 

pursuant to 12 U.S.C. 1464(v) for late 

filing or the submission of false or 

misleading certified statements by State 

savings associations. Pursuant to section 

5(v) of the Home Owners’ Loan Act (12 

U.S.C. 1464(v)), the Board of Directors 

or its designee may assess civil money 

penalties as follows: 

(i) Late filing—Tier One penalties. In 

cases in which an institution fails to 

make or publish its Report of Condition 

and Income (Call Report) within the 

appropriate time periods, a civil money 

penalty of not more than $3,928 per day 

may be assessed 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 the institution inadvertently 

transmitted a Call Report that is 

minimally late. For penalties assessed 

after January 15, 2018, for violations of 

this paragraph (d)(1)(i) that occurred on 

or after November 2, 2015, the following 

maximum Tier One penalty amounts 

contained in paragraphs (d)(1)(i)(A) and 

(B) of this section shall apply for each 

day that the violation continues. 

(A) First offense. Generally, in such 

cases, the amount assessed shall be $538 

per day for each of the first 15 days for 

which the failure continues, and $1,078 

per day for each subsequent day the 

failure continues, beginning on the 

sixteenth day. For institutions with less 

than $25,000,000 in assets, the amount 

assessed shall be the greater of $180 per 

day or 1/1000th of the institution’s total 

assets (1/10th of a basis point) for each 

of the first 15 days for which the failure 

continues, and $359 or 1/500th of the 

institution’s total assets, 1⁄5 of a basis 

point) for each subsequent day the 

failure continues, beginning on the 

sixteenth day. 

(B) Subsequent offense. Where the 

institution has been delinquent in 

making or publishing its Call Report 

within the preceding five quarters, the 

amount assessed for the most current 

failure shall generally be $897 per day 

for each of the first 15 days for which 

the failure continues, and $1,795 per 

day for each subsequent day the failure 

continues, beginning on the sixteenth 

day. For institutions with less than 

$25,000,000 in assets, those amounts, 

respectively, shall be 1/500th of the 

bank’s total assets and 1/250th of the 

institution’s total assets. 

(C) Lengthy or repeated violations. 

The amounts set forth in this paragraph 

(d)(1)(i) will be assessed on a case-bycase 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. 

(D) Waiver. Absent extraordinary 

circumstances outside the control of the 

institution, penalties assessed for late 

filing shall not be waived. 

(ii) 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 

civil money penalty of not more than 

$39,278 per day for each day the failure 

continues. 

(iii) False or misleading reports or 

information—(A) 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 

civil money penalty of not more than 

$3,928 per day 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 the institution 

inadvertently transmits a Call Report or 

information that is false or misleading. 

(B) 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 civil money 

penalty of not more than $39,278 per 

day for each day the information is not 

corrected. 

(C) 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 civil money penalty of not more than 

the lesser of $1,963,870 or 1 percent of 

the institution’s total assets per day for 

each day the information is not 

corrected. 

(iv) Mitigating factors. The amounts 

set forth in this paragraph (d)(1) may be 

reduced based upon the factors set forth 

in paragraph (b) of this section. 

(2) Civil money penalties assessed 

pursuant to 12 U.S.C. 1467(d) for refusal 

by an affiliate of a State savings 

association to allow examination or to 

provide required information during an 


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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 1523 

examination. Pursuant to section 9(d) of 

the Home Owners’ Loan Act (12 U.S.C. 

1467(d)), civil money penalties may be 

assessed against any State savings 

association if an affiliate of such an 

institution refuses to permit a dulyappointed examiner to conduct an 

examination or refuses to provide 

information during the course of an 

examination as set forth 12 U.S.C. 

1467(d), in an amount not to exceed 

$9,819 for each day the refusal 

continues. 

(3) Civil money penalties assessed 

pursuant to 12 U.S.C. 1817(a) for late 

filings or the submission of false or 

misleading reports of condition. 

Pursuant to section 7(a) of the FDIA (12 

U.S.C. 1817(a)), the Board of Directors 

or its designee may assess civil money 

penalties as follows: 

(i) Late filing—Tier One penalties. In 

cases in which an institution fails to 

make or publish its Report of Condition 

and Income (Call Report) within the 

appropriate time periods, a civil money 

penalty of not more than $3,928 per day 

may be assessed 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 the institution inadvertently 

transmitted a Call Report that is 

minimally late. For penalties assessed 

after January 15, 2018, for violations of 

this paragraph (d)(3)(i) that occurred on 

or after November 2, 2015, the following 

maximum Tier One penalty amounts 

contained in paragraphs (d)(3)(i)(A) and 

(B) of this section shall apply for each 

day that the violation continues. 

(A) First offense. Generally, in such 

cases, the amount assessed shall be $538 

per day for each of the first 15 days for 

which the failure continues, and $1,078 

per day for each subsequent day the 

failure continues, beginning on the 

sixteenth day. For institutions with less 

than $25,000,000 in assets, the amount 

assessed shall be the greater of $180 per 

day or 1/1000th of the institution’s total 

assets (1/10th of a basis point) for each 

of the first 15 days for which the failure 

continues, and $359 or 1/500th of the 

institution’s total assets, (1⁄5 of a basis 

point) for each subsequent day the 

failure continues, beginning on the 

sixteenth day. 

(B) Subsequent offense. Where the 

institution has been delinquent in 

making or publishing its Call Report 

within the preceding five quarters, the 

amount assessed for the most current 

failure shall generally be $897 per day 

for each of the first 15 days for which 

the failure continues, and $1,795 per 

day for each subsequent day the failure 

continues, beginning on the sixteenth 

day. For institutions with less than 

$25,000,000 in assets, those amounts, 

respectively, shall be 1/500th of the 

bank’s total assets and 1/250th of the 

institution’s total assets. 

(C) Lengthy or repeated violations. 

The amounts set forth in this paragraph 

(d)(3)(i) will be assessed on a case-bycase 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. 

(D) Waiver. Absent extraordinary 

circumstances outside the control of the 

institution, penalties assessed for late 

filing shall not be waived. 

(ii) 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 

civil money penalty of not more than 

$39,278 per day for each day the failure 

continues. 

(iii) False or misleading reports or 

information—(A) 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 

civil money penalty of not more than 

$3,928 per day 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 the institution 

inadvertently transmits a Call Report or 

information that is false or misleading. 

(B) 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 civil money 

penalty of not more than $39,278 per 

day for each day the information is not 

corrected. 

(C) 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 civil money penalty of not more than 

the lesser of $1,963,870 or 1 percent of 

the institution’s total assets per day for 

each day the information is not 

corrected. 

(iv) Mitigating factors. The amounts 

set forth in this paragraph (d)(3) may be 

reduced based upon the factors set forth 

in paragraph (b) of this section. 

(4) Civil money penalties assessed 

pursuant to 12 U.S.C. 1817(c) for late 

filing or the submission of false or 

misleading certified statements. Tier 

One civil money penalties may be 

assessed pursuant to section 7(c)(4)(A) 

of the FDIA (12 U.S.C. 1817(c)(4)(A)) in 

an amount not to exceed $3,591 for each 

day during which the failure to file 

continues or the false or misleading 

information is not corrected. Tier Two 

civil money penalties may be assessed 

pursuant to section 7(c)(4)(B) of the 

FDIA (12 U.S.C. 1817(c)(4)(B)) in an 

amount not to exceed $35,904 for each 

day during which the failure to file 

continues or the false or misleading 

information is not corrected. Tier Three 

civil money penalties may be assessed 

pursuant to section 7(c)(4)(C) in an 

amount not to exceed the lesser of 

$1,795,216 or 1 percent of the total 

assets of the institution for each day 

during which the failure to file 

continues or the false or misleading 

information is not corrected. 

(5) Civil money penalties assessed 

pursuant to section 8(i)(2) of the FDIA. 

Tier One civil money penalties may be 

assessed pursuant to section 8(i)(2)(A) of 

the FDIA (12 U.S.C. 1818(i)(2)(A)) in an 

amount not to exceed $9,819 for each 

day during which the violation 

continues. Tier Two civil money 

penalties may be assessed pursuant to 

section 8(i)(2)(B) of the FDIA (12 U.S.C. 

1818(i)(2)(B)) in an amount not to 

exceed $49,096 for each day during 

which the violation, practice or breach 

continues. Tier Three civil money 

penalties may be assessed pursuant to 

section 8(i)(2)(C) (12 U.S.C. 

1818(i)(2)(C)) in an amount not to 

exceed, in the case of any person other 

than an insured depository institution 

$1,963,870 or, in the case of any insured 

depository institution, an amount not to 

exceed the lesser of $1,963,870 or 1 

percent of the total assets of such 

institution for each day during which 

the violation, practice, or breach 

continues. 

(i) Pursuant to 7(j)(16) of the FDIA (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 

pursuant to section 8(i)(2) of the FDIA 

(12 U.S.C. 1818(i)(2)) in the amounts set 

forth in this paragraph (d)(5). 

(ii) Pursuant to the International 

Banking Act of 1978 (IBA) (12 U.S.C. 

3108(b)), civil money penalties may be 

assessed for failure to comply with the 

requirements of the IBA pursuant to 

section 8(i)(2) of the FDIA (12 U.S.C. 

1818(i)(2)), in the amounts set forth in 

this paragraph (d)(5). 

(iii) Pursuant to section 1120(b) of the 

Financial Institutions Recovery, Reform, 

and Enforcement Act of 1989 (FIRREA) 

(12 U.S.C. 3349(b)), where a financial 

institution seeks, obtains, or gives any 


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1524 Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 

other thing of value in exchange for the 

performance of an appraisal by a person 

that the institution knows is not a state 

certified or licensed appraiser in 

connection with a federally related 

transaction, a civil money penalty may 

be assessed pursuant to section 8(i)(2) of 

the FDIA (12 U.S.C. 1818(i)(2)) in the 

amounts set forth in this paragraph 

(d)(5). 

(iv) Pursuant to the Community 

Development Banking and Financial 

Institution Act (Community 

Development Banking Act) (12 U.S.C. 

4717(b)) a civil money penalty may be 

assessed for violations of the 

Community Development Banking Act 

pursuant to section 8(i)(2) of the FDIA 

(12 U.S.C. 1818(i)(2)), in the amount set 

forth in this paragraph (d)(5). 

(v) Civil money penalties may be 

assessed pursuant to section 8(i)(2) of 

the FDIA in the amounts set forth in this 

paragraph (d)(5) for violations of various 

consumer laws, including, but not 

limited to, the Home Mortgage 

Disclosure Act (12 U.S.C. 2804 et seq. 

and 12 CFR 203.6), the Expedited Funds 

Availability Act (12 U.S.C. 4001 et seq.), 

the Truth in Savings Act (12 U.S.C. 4301 

et seq.), the Real Estate Settlement 

Procedures Act (12 U.S.C. 2601 et seq.), 

the Truth in Lending Act (15 U.S.C. 

1601 et seq.), the Fair Credit Reporting 

Act (15 U.S.C. 1681 et seq.), the Equal 

Credit Opportunity Act (15 U.S.C. 1691 

et seq.), the Fair Debt Collection 

Practices Act (15 U.S.C. 1692 et seq.), 

the Electronic Funds Transfer Act (15 

U.S.C. 1693 et seq.) and the Fair 

Housing Act (42 U.S.C. 3601 et seq.). 

(6) Civil money penalties assessed 

pursuant to 12 U.S.C. 1820(e) for refusal 

to allow examination or to provide 

required information during an 

examination. Pursuant to section 

10(e)(4) of the FDIA (12 U.S.C. 

1820(e)(4)), civil money penalties may 

be assessed against any affiliate of an 

insured depository institution that 

refuses to permit a duly-appointed 

examiner to conduct an examination or 

to provide information during the 

course of an examination as set forth in 

section 20(b) of the FDIA (12 U.S.C. 

1820(b)), in an amount not to exceed 

$8,977 for each day the refusal 

continues. 

(7) Civil money penalties assessed 

pursuant to 12 U.S.C. 1820(k) for 

violation of one-year restriction on 

Federal examiners of financial 

institutions. Pursuant to section 10(k) of 

the FDIA (12 U.S.C. 1820(k)), the Board 

of Directors or its designee may assess 

a civil money penalty of up to $323,027 

against any covered former Federal 

examiner of a financial institution who, 

in violation of section 10(k) of the FDIA 

(12 U.S.C. 1820(k)) and within the oneyear period following termination of 

government service as an employee, 

serves as an officer, director, or 

consultant of a financial or depository 

institution, a holding company, or of 

any other entity listed in section 10(k) 

of the FDIA (12 U.S.C. 1820(k)), without 

the written waiver or permission by the 

appropriate Federal banking agency or 

authority under section 10(k)(5) of the 

FDIA (12 U.S.C. 1820(k)(5)). 

(8) Civil money penalties assessed 

pursuant to 12 U.S.C. 1828(a) for 

incorrect display of insurance logo. 

Pursuant to section 18(a)(3) of the FDIA 

(12 U.S.C. 1828(a)(3)), civil money 

penalties may be assessed against an 

insured depository institution that fails 

to correctly display its insurance logo 

pursuant to that section, in an amount 

not to exceed $122 for each day the 

violation continues. 

(9) Civil money penalties assessed 

pursuant to 12 U.S.C. 1828(h) for failure 

to timely pay assessment—(i) In general. 

Subject to paragraph (d)(9)(iii) of this 

section, any insured depository 

institution that fails or refuses to pay 

any assessment shall be subject to a 

penalty in an amount of not more than 

1 percent of the amount of the 

assessment due for each day that such 

violation continues. 

(ii) Exception in case of dispute. 

Paragraph (d)(9)(i) of this section shall 

not apply if— 

(A) The failure to pay an assessment 

is due to a dispute between the insured 

depository institution and the 

Corporation over the amount of such 

assessment; and 

(B) The insured depository institution 

deposits security satisfactory to the 

Corporation for payment upon final 

determination of the issue. 

(iii) Special rule for small assessment 

amounts. If the amount of the 

assessment that an insured depository 

institution fails or refuses to pay is less 

than $10,000 at the time of such failure 

or refusal, the amount of any penalty to 

which such institution is subject under 

paragraph (d)(9)(i) of this section shall 

not exceed $122 for each day that such 

violation continues. 

(iv) Authority to modify or remit 

penalty. The Corporation, in the sole 

discretion of the Corporation, may 

compromise, modify, or remit any 

penalty that the Corporation may assess 

or has already assessed under paragraph 

(d)(9)(i) of this section upon a finding 

that good cause prevented the timely 

payment of an assessment. 

(10) Civil money penalties assessed 

pursuant to 12 U.S.C. 1829b(j) for 

recordkeeping violations. Pursuant to 

section 19b(j) of the FDIA (12 U.S.C. 

1829b(j)), civil money penalties may be 

assessed against an insured depository 

institution and any director, officer or 

employee thereof who willfully or 

through gross negligence violates or 

causes a violation of the recordkeeping 

requirements of that section or its 

implementing regulations in an amount 

not to exceed $20,521 per violation. 

(11) Civil money penalties pursuant to 

12 U.S.C. 1832(c) for violation of 

provisions regarding interest-bearing 

demand deposit accounts. Pursuant to 

12 U.S.C. 1832(c), any depository 

institution that violates the prohibition 

regarding interest-bearing demand 

deposit accounts shall be subject to a 

fine of $2,852 per violation. 

(12) Civil penalties for violations of 

security measure requirements under 12 

U.S.C. 1884. Pursuant to 12 U.S.C. 1884, 

an institution that violates a rule 

establishing minimum security 

requirements as set forth in 12 U.S.C. 

1882, shall be subject to a civil penalty 

not to exceed $285 for each day of the 

violation. 

(13) Civil money penalties assessed 

pursuant to 12 U.S.C. 1972(2)(F) for 

prohibited tying arrangements. Pursuant 

to the Bank Holding Company Act of 

1970, Tier One civil money penalties 

may be assessed pursuant to 12 U.S.C. 

1972(2)(F)(i) in an amount not to exceed 

$9,819 for each day during which the 

violation continues. Tier Two civil 

money penalties may be assessed 

pursuant to 12 U.S.C. 1972(2)(F)(ii) in 

an amount not to exceed $49,096 for 

each day during which the violation, 

practice or breach continues. Tier Three 

civil money penalties may be assessed 

pursuant to 12 U.S.C. 1972(2)(F)(iii) in 

an amount not to exceed, in the case of 

any person other than an insured 

depository institution $1,963,870 for 

each day during which the violation, 

practice, or breach continues or, in the 

case of any insured depository 

institution, an amount not to exceed the 

lesser of $1,963,870 or 1 percent of the 

total assets of such institution for each 

day during which the violation, 

practice, or breach continues. 

(14) Civil money penalties assessed 

pursuant to 12 U.S.C. 3909(d). Pursuant 

to the International Lending 

Supervision Act (ILSA) (12 U.S.C. 

3909(d)), civil money penalties may be 

assessed against any institution or any 

officer, director, employee, agent or 

other person participating in the 

conduct of the affairs of such institution 

is an amount not to exceed $2,443 for 

each day a violation of the ILSA or any 

rule, regulation or order issued pursuant 

to ILSA continues. 

(15) Civil money penalties assessed 

for violations of 15 U.S.C. 78u–2. 


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Federal Register / Vol. 83, No. 9 / Friday, January 12, 2018 / Rules and Regulations 1525 

1Public Law 101–410, 104 Stat. 890. 

2Public Law 104–134, section 31001(s)(1), 110 

Stat. 1321, 1321–373. 

3Public Law 114–74, section 701, 129 Stat. 584, 

599. 

4Section 1301(a) of the Federal Reports 

Elimination Act of 1998, Public Law 105–362, 112 

Stat. 3293, also amended the Inflation Adjustment 

Act by striking section 6, which contained annual 

reporting requirements, and redesignating section 7 

as section 6, but did not alter the civil penalty 

adjustment requirements. 

5 81 FR 38569 (June 14, 2016). Although the 

Bureau was not obligated to solicit comments for 

the interim final rule, the Bureau invited public 

comment and received none. 

6See 12 CFR 1083.1. 

7 Inflation Adjustment Act section 4, codified at 

28 U.S.C. 2461 note. 

8 Inflation Adjustment Act sections 4 and 5, 

codified at 28 U.S.C. 2461 note. 

9 Inflation Adjustment Act sections 3 and 5, 

codified at 28 U.S.C. 2461 note. 

10 Inflation Adjustment Act section 7, codified at 

28 U.S.C. 2461 note. 

11 Inflation Adjustment Act section 5, codified at 

28 U.S.C. 2461 note; Memorandum to the Exec. 

Dep’ts & Agencies from Mick Mulvaney, Director, 

Office of Mgmt. & Budget (Dec. 15, 2017), available 

at https://www.whitehouse.gov/wp-content/ 

uploads/2017/11/M-18-03.pdf. 

Pursuant to section 21B of the Securities 

Exchange Act of 1934 (Exchange Act) 

(15 U.S.C. 78u–2), civil money penalties 

may be assessed for violations of certain 

provisions of the Exchange Act, where 

such penalties are in the public interest. 

Tier One civil money penalties may be 

assessed pursuant to 15 U.S.C. 78u– 

2(b)(1) in an amount not to exceed 

$9,239 for a natural person or $92,383 

for any other person for violations set 

forth in 15 U.S.C. 78u–2(a). Tier Two 

civil money penalties may be assessed 

pursuant to 15 U.S.C. 78u–2(b)(2) in an 

amount not to exceed—for each 

violation set forth in 15 U.S.C. 78u– 

2(a)—$92,383 for a natural person or 

$461,916 for any other person if the act 

or omission involved fraud, deceit, 

manipulation, or deliberate or reckless 

disregard of a regulatory requirement. 

Tier Three civil money penalties may be 

assessed pursuant to 15 U.S.C. 78u– 

2(b)(3) for each violation set forth in 15 

U.S.C. 78u–2(a), in an amount not to 

exceed $184,767 for a natural person or 

$923,831 for any other person, if the act 

or omission involved fraud, deceit, 

manipulation, or deliberate or reckless 

disregard of a regulatory requirement; 

and such act or omission directly or 

indirectly resulted in substantial losses, 

or created a significant risk of 

substantial losses to other persons or 

resulted in substantial pecuniary gain to 

the person who committed the act or 

omission. 

(16) Civil money penalties assessed 

pursuant to 15 U.S.C. 1639e(k) for 

appraisal independence violations. 

Pursuant to section 1472(a) of the DoddFrank Wall Street Reform and Consumer 

Protection Act (Appraisal Independence 

Rule) (15 U.S.C. 1639e(k)), civil money 

penalties may be assessed for an initial 

violation of the Appraisal Independence 

Rule in an amount not to exceed 

$11,279 for each day during which the 

violation continues and, for subsequent 

violations, $22,556 for each day during 

which the violation continues. 

(17) Civil money penalties assessed 

for false claims and statements 

pursuant to 31 U.S.C. 3802. Pursuant to 

the Program Fraud Civil Remedies Act 

(31 U.S.C. 3802), civil money penalties 

of not more than $11,181 per claim or 

statement may be assessed for violations 

involving false claims and statements. 

(18) Civil money penalties assessed 

for violations of 42 U.S.C. 4012a(f). 

Pursuant to the Flood Disaster 

Protection Act (FDPA) (42 U.S.C. 

4012a(f)), civil money penalties may be 

assessed against any regulated lending 

institution that engages in a pattern or 

practice of violations of the FDPA in an 

amount not to exceed $2,133 per 

violation. 

Dated at Washington, DC on December 19, 

2017. 

By order of the Board of Directors. 

Valerie J. Best, 

Assistant Executive Secretary. 

[FR Doc. 2018–00403 Filed 1–11–18; 8:45 am] 

BILLING CODE 6714–01–P 

BUREAU OF CONSUMER FINANCIAL 

PROTECTION 

12 CFR Part 1083 

Civil Penalty Inflation Adjustments 

AGENCY: Bureau of Consumer Financial 

Protection. 

ACTION: Final rule. 

SUMMARY: The Bureau of Consumer 

Financial Protection (Bureau) is 

adjusting for inflation the maximum 

amount of each civil penalty within the 

Bureau’s jurisdiction. These 

adjustments are required by the Federal 

Civil Penalties Inflation Adjustment Act 

of 1990, as amended by the Debt 

Collection Improvement Act of 1996 

and further amended by the Federal 

Civil Penalties Inflation Adjustment Act 

Improvements Act of 2015 (Inflation 

Adjustment Act). The inflation 

adjustments mandated by the Inflation 

Adjustment Act serve to maintain the 

deterrent effect of civil penalties and to 

promote compliance with the law. 

DATES: This final rule is effective 

January 15, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Monique Chenault, Paralegal Specialist, 

Office of Regulations, Consumer 

Financial Protection Bureau, 1700 

G Street NW, Washington, DC 20552, at 

(202) 435–7700. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The Federal Civil Penalties Inflation 

Adjustment Act of 1990,1 as amended 

by the Debt Collection Improvement Act 

of 1996 2 and further amended by the 

Federal Civil Penalties Inflation 

Adjustment Act Improvements Act of 

2015 (Inflation Adjustment Act),3

directs Federal agencies to adjust for 

inflation the civil penalty amounts 

within their jurisdiction not later than 

July 1, 2016, and then not later than 

January 15 every year thereafter.4 28 

U.S.C. 2461 note. Each agency was 

required to make the 2016 one-time 

catch-up adjustments through an 

interim final rule published in the 

Federal Register. On June 14, 2016, the 

Bureau published its interim final rule 

to make the initial catch-up adjustments 

to civil penalties within the Bureau’s 

jurisdiction.5 The June 2016 interim 

final rule created a new part 1083 and 

in § 1083.1 established the inflationadjusted maximum amounts for each 

civil penalty within the Bureau’s 

jurisdiction.6 The Inflation Adjustment 

Act also requires subsequent 

adjustments to be made annually, not 

later than January 15, and 

notwithstanding section 553 of the 

Administrative Procedure Act (APA).7

Specifically, Federal agencies are 

directed to adjust annually each civil 

penalty provided by law within the 

jurisdiction of the agency by the ‘‘costof-living adjustment.’’ 8 For annual 

adjustments after the initial catch up 

adjustments, the ‘‘cost-of-living 

adjustment’’ is defined as the percentage 

(if any) by which the Consumer Price 

Index for All Urban Consumers (CPI–U) 

for the month of October preceding the 

date of the adjustment, exceeds the CPI– 

U for October of the prior year.9 The 

Director of the Office of Management 

and Budget (OMB) is required to issue 

guidance (OMB Guidance) every year by 

December 15 to agencies on 

implementing the annual civil penalty 

inflation adjustments.10 Pursuant to the 

Inflation Adjustment Act and OMB 

Guidance, agencies must apply the 

multiplier reflecting the ‘‘cost-of-living 

adjustment’’ to the current penalty 

amount and then round that amount to 

the nearest dollar to determine the 

annual adjustments.11

For the 2018 annual adjustment, the 

multiplier reflecting the ‘‘cost-of-living 


sradovich on DSK3GMQ082PROD with RULES