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[Federal Register Volume 90, Number 5 (Wednesday, January 8, 2025)]
[Rules and Regulations]
[Pages 1355-1357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-00167]

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Rules and Regulations
                                                Federal Register
________________________________________________________________________

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. 

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Federal Register / Vol. 90, No. 5 / Wednesday, January 8, 2025 / 
Rules and Regulations

[[Page 1355]]

CONSUMER FINANCIAL PROTECTION BUREAU

12 CFR Part 1083

Civil Penalty Inflation Adjustments

AGENCY: Consumer Financial Protection Bureau.

ACTION: Final rule.

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SUMMARY: The Consumer Financial Protection Bureau (CFPB) is adjusting 
for inflation the maximum amount of each civil penalty within the 
CFPB's jurisdiction. These adjustments are required by the Federal 
Civil Penalties Inflation Adjustment Act of 1990 (Inflation Adjustment 
Act), 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. 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, 2025.

FOR FURTHER INFORMATION CONTACT: George Karithanom, Regulatory 
Implementation & Guidance Program Analyst, Office of Regulations, at 
(202) 435-7700 or at: https://reginquiries.consumerfinance.gov. If you 
require this document in an alternative electronic format, please 
contact [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    The Inflation Adjustment Act,\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,\3\ directs 
Federal agencies to adjust the civil penalty amounts within their 
jurisdictions for inflation not later than July 1, 2016, and then not 
later than January 15 every year thereafter.\4\ 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 CFPB published its interim final rule (IFR) to make the initial 
catch-up adjustments to civil penalties within the CFPB's 
jurisdiction.\5\ The June 2016 IFR created a new part 1083 and in part 
1083.1 established the inflation-adjusted maximum amounts for each 
civil penalty within the CFPB's jurisdiction.\6\ The CFPB finalized the 
IFR on January 31, 2019.\7\
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    \1\ Public Law 101-410, 104 Stat. 890.
    \2\ Public Law 104-134, sec. 31001(s)(1), 110 Stat. 1321, 1321-
373.
    \3\ Public Law 114-74, sec. 701, 129 Stat. 584, 599.
    \4\ Section 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; 28 
U.S.C. 2461 note.
    \5\ 81 FR 38569 (June 14, 2016). Although the CFPB was not 
obligated to solicit comment for the interim final rule, the CFPB 
invited public comment and received none.
    \6\ See 12 CFR 1083.1.
    \7\ 84 FR 517 (Jan. 31, 2019).
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    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).\8\ The CFPB 
annually adjusted its civil penalty amounts, as required by the Act.\9\
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    \8\ Inflation Adjustment Act section 4, codified at 28 U.S.C. 
2461 note. As discussed in guidance issued by the Director of the 
Office of Management and Budget (OMB), the APA generally requires 
notice, an opportunity for comment, and a delay in effective date 
for certain rulemakings, but the Inflation Adjustment Act provides 
that these procedures are not required for agencies to issue 
regulations implementing the annual adjustment. See Memorandum for 
the Heads of Exec. Dep'ts & Agencies from Shalanda D. Young, 
Director, Implementation of Penalty Inflation Adjustments for 2025, 
Pursuant to the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015, Off. of Mgmt. & Budget (Dec. 17, 2024), 
https://www.whitehouse.gov/wp-content/uploads/2024/12/M-25-02.pdf 
[hereinafter Young Memo].
    \9\ See 82 FR 3601 (Jan. 12, 2017); 83 FR 1525 (Jan. 12, 2018); 
84 FR 517 (Jan. 31, 2019); 85 FR 2012 (Jan. 14, 2020); 86 FR 3767 
(Jan. 15, 2021); 87 FR 2314 (Jan. 14, 2022); 88 FR 1 (Jan. 3, 2023); 
89 FR 1787 (Jan. 11, 2024).
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    Specifically, the Inflation Adjustment Act directs Federal agencies 
to adjust annually each civil penalty provided by law within the 
jurisdiction of each agency by the ``cost-of-living adjustment.'' \10\ 
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.\11\ 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. 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.\12\ The adjustments are designed to keep pace 
with inflation so that civil penalties retain their deterrent effect 
and promote compliance with the law.\13\
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    \10\ Inflation Adjustment Act sections 4 and 5, codified at 28 
U.S.C. 2461 note.
    \11\ Inflation Adjustment Act sections 3 and 5, codified at 28 
U.S.C. 2461 note.
    \12\ Inflation Adjustment Act section 5, codified at 28 U.S.C. 
2461 note; see also Young Memo.
    \13\ See Inflation Adjustment Act section 2, codified at 28 
U.S.C. 2461 note.
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    For the 2025 annual adjustment, the multiplier reflecting the 
``cost-of-living adjustment'' is 1.02598.

II. Adjustment

    Pursuant to the Inflation Adjustment Act and OMB Guidance, the CFPB 
multiplied each of its civil penalty amounts by the ``cost-of-living 
adjustment'' multiplier and rounded to the nearest dollar.\14\ The new 
penalty amounts that apply to civil penalties assessed after January 
15, 2025, are as follows:
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    \14\ Inflation Adjustment Act section 4, codified at 28 U.S.C. 
2461 note.

[[Page 1356]]

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                                                                      Penalty
                                                                      amounts       OMB ``cost-of-
                  Law                      Penalty description      established         living       New penalty
                                                                    under 2024       adjustment''    amount \15\
                                                                    final rule        multiplier
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Consumer Financial Protection Act, 12   Tier 1 penalty..........          $7,034            1.02598       $7,217
 U.S.C. 5565(c)(2)(A).
Consumer Financial Protection Act, 12   Tier 2 penalty..........          35,169            1.02598       36,083
 U.S.C. 5565(c)(2)(B).
Consumer Financial Protection Act, 12   Tier 3 penalty..........       1,406,728            1.02598    1,443,275
 U.S.C. 5565(c)(2)(C).
Interstate Land Sales Full Disclosure   Per violation...........           2,451            1.02598        2,515
 Act, 15 U.S.C. 1717a(a)(2).
Interstate Land Sales Full Disclosure   Annual cap..............       2,449,575            1.02598    2,513,215
 Act, 15 U.S.C. 1717a(a)(2).
Real Estate Settlement Procedures Act,  Per failure.............             115            1.02598          118
 12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act,  Annual cap..............         230,464            1.02598      236,451
 12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act,  Per failure, where                   230            1.02598          236
 12 U.S.C. 2609(d)(2)(A).                intentional.
SAFE Act, 12 U.S.C. 5113(d)(2)........  Per violation...........          35,516            1.02598       36,439
Truth in Lending Act, 15 U.S.C.         First violation.........          14,069            1.02598       14,435
 1639e(k)(1).
Truth in Lending Act, 15 U.S.C.         Subsequent violations...          28,135            1.02598       28,866
 1639e(k)(2).
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III. Procedural Requirements
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    \15\ Numbers may not multiply to totals shown because of 
rounding.
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A. Administrative Procedure Act

    Under the APA, notice and opportunity for public comment are not 
required if the CFPB finds that notice and public comment are 
impracticable, unnecessary, or contrary to the public interest.\16\ The 
adjustments to the civil penalty amounts are technical and non-
discretionary, and they merely apply the statutory method for adjusting 
civil penalty amounts. These adjustments are required by the Inflation 
Adjustment Act. Moreover, the Inflation Adjustment Act directs agencies 
to adjust civil penalties annually notwithstanding section 553 of the 
APA,\17\ and OMB Guidance reaffirms that agencies need not complete a 
notice-and-comment process before making the annual adjustments for 
inflation.\18\ For these reasons, the CFPB has determined that 
publishing a notice of proposed rulemaking and providing opportunity 
for public comment are unnecessary. The amendments therefore are 
adopted in final form.
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    \16\ 5 U.S.C. 553(b)(B).
    \17\ Inflation Adjustment Act section 4, codified at 28 U.S.C. 
2461 note.
    \18\ Young Memo.
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    Section 553(d) of the APA generally requires publication of a final 
rule not less than 30 days before its effective date, except (1) a 
substantive rule which grants or recognizes an exemption or relieves a 
restriction; (2) interpretive rules and statements of policy; or (3) as 
otherwise provided by the agency for good cause found and published 
with the rule.\19\ At minimum, the CFPB believes the annual adjustments 
to the civil penalty amounts in Sec.  1083.1(a) fall under the third 
exception to section 553(d). The CFPB finds that there is good cause to 
make the amendments effective on January 15, 2025. The amendments to 
Sec.  1083.1(a) in this final rule are technical and non-discretionary, 
and they merely apply the statutory method for adjusting civil penalty 
amounts and follow the statutory directive to make annual adjustments 
each year. Moreover, the Inflation Adjustment Act directs agencies to 
adjust the civil penalties annually notwithstanding section 553 of the 
APA,\20\ and OMB Guidance reaffirms that agencies need not provide a 
delay in effective date for the annual adjustments for inflation.\21\
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    \19\ 5 U.S.C. 553(d).
    \20\ Inflation Adjustment Act section 4, codified at 28 U.S.C. 
2461 note.
    \21\ Young Memo.
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B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) does not apply to a rulemaking 
where a general notice of proposed rulemaking is not required.\22\ As 
noted previously, the CFPB has determined that it is unnecessary to 
publish a general notice of proposed rulemaking for this final rule. 
Accordingly, the RFA's requirements relating to an initial and final 
regulatory flexibility analysis do not apply.
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    \22\ 5 U.S.C. 603(a), 604(a).
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C. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995,\23\ the 
CFPB reviewed this final rule. The CFPB has determined that this rule 
does not create any new information collections or substantially revise 
any existing collections.
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    \23\ 44 U.S.C. 3506; 5 CFR part 1320.
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D. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the CFPB will submit a report containing this rule and other required 
information to the United States Senate, the United States House of 
Representatives, and the Comptroller General of the United States prior 
to the rule taking effect. The Office of Information and Regulatory 
Affairs (OIRA) has designated this rule as not a ``major rule'' as 
defined by 5 U.S.C. 804(2).

List of Subjects in 12 CFR Part 1083

    Administrative practice and procedure, Consumer protection, 
Penalties.

Authority and Issuance

    For the reasons set forth in the preamble, the CFPB amends 12 CFR 
part 1083, as set forth below:

PART 1083--CIVIL PENALTY ADJUSTMENTS

0
1. The authority citation for part 1083 continues to read as follows:

    Authority:  12 U.S.C. 2609(d); 12 U.S.C. 5113(d)(2); 12 U.S.C. 
5565(c); 15 U.S.C. 1639e(k); 15 U.S.C. 1717a(a); 28 U.S.C. 2461 
note.

0
2. Section 1083.1 is revised to read as follows:

Sec.  1083.1  Adjustment of civil penalty amounts.

    (a) The maximum amount of each civil penalty within the 
jurisdiction of the Consumer Financial Protection Bureau to impose is 
adjusted in accordance with 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 (28 U.S.C. 2461 
note), as follows:

[[Page 1357]]

                        Table 1 to Paragraph (a)
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                                                       Adjusted maximum
               Law                      Penalty          civil penalty
                                      description           amount
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12 U.S.C. 5565(c)(2)(A).........  Tier 1 penalty....              $7,217
12 U.S.C. 5565(c)(2)(B).........  Tier 2 penalty....              36,083
12 U.S.C. 5565(c)(2)(C).........  Tier 3 penalty....           1,443,275
15 U.S.C. 1717a(a)(2)...........  Per violation.....               2,515
15 U.S.C. 1717a(a)(2)...........  Annual cap........           2,513,215
12 U.S.C. 2609(d)(1)............  Per failure.......                 118
12 U.S.C. 2609(d)(1)............  Annual cap........             236,451
12 U.S.C. 2609(d)(2)(A).........  Per failure, where                 236
                                   intentional.
12 U.S.C. 5113(d)(2)............  Per violation.....              36,439
15 U.S.C. 1639e(k)(1)...........  First violation...              14,435
15 U.S.C. 1639e(k)(2)...........  Subsequent                      28,866
                                   violations.
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    (b) The adjustments in paragraph (a) of this section shall apply to 
civil penalties assessed after January 15, 2025, whose associated 
violations occurred on or after November 2, 2015.

Brian Shearer,
Assistant Director, Office of Policy Planning and Strategy, Consumer 
Financial Protection Bureau.
[FR Doc. 2025-00167 Filed 1-7-25; 8:45 am]
BILLING CODE 4810-AM-P
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