Source: https://www.federalregister.gov/articles/2009/01/15/E9-656/rules-of-practice-and-procedure-adjusting-civil-money-penalties-for-inflation
Timestamp: 2016-05-01 13:43:42
Document Index: 66872768

Matched Legal Cases: ['§ 622', '§ 622', '§ 622', '§ 622', '§ 622', 'art 622', 'ART 622', '§ 622', '§ 622']

Federal Register | Rules of Practice and Procedure; Adjusting Civil Money Penalties for Inflation
74 FR 2340
-2342 (3 pages)
3052-AC47
Document Number: E9-656
Shorter URL: https://federalregister.gov/a/E9-656 Related Topics
This regulation implements cost-of-living adjustments to civil money penalties (CMPs) that the Farm Credit Administration (FCA) may impose under the Farm Credit Act of 1971, as amended (Farm Credit Act), and under the National Flood Insurance Reform Act of 1994 (Reform Act). The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 (FCPIA Act), requires all Federal agencies with the authority to impose CMPs to evaluate those CMPs periodically to ensure that they continue to maintain their deterrent value.
Rules of Practice and Procedure--Civil Money Penalties 1 action from December 2008 December 2008
2. Penalty Amount Remains the Same in § 622.61(a)(1)
3. New Penalty Amount in § 622.61(a)(2)
2. New Penalty Amounts in § 622.61(b)
Michael T. Wilson, Policy Analyst, Office of Regulatory Policy, Farm Credit Administration, McLean, VA 22102-5090, (703) 883-4124, TTY (703) 883-4434,
The FCPIA Act requires every Federal agency with authority to issue CMPs to enact regulations that adjust its CMPs pursuant to the inflation adjustment formula in section 5(b) of the FCPIA Act.
Each Federal agency was required to issue these regulations by October 23, 1996, and adjust them when necessary at least once every 4 years thereafter. Section 6 of the amended FCPIA Act specifies that inflation-adjusted CMPs will apply only to violations that occur after the effective date of the adjustment. The inflation adjustment is based on the percentage increase in the Consumer Price Index (CPI).
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.” Furthermore, the increase for each CMP that is adjusted for inflation must be rounded using a method prescribed by section 5(a) of the FCPIA Act.
Section 5.32(a) of the Farm Credit Act provides that any FCS institution or any officer, director, employee, agent, or other person participating in the conduct of the affairs of an FCS institution who violates the terms of a final order issued under section 5.25 or 5.26 of the Farm Credit Act must pay up to $1,000 per day for each day during which such violation continues. Orders issued by FCA under section 5.25 or 5.26 of the Farm Credit Act include temporary and permanent cease-and-desist orders. In addition, section 5.32(h) provides that any directive issued under sections 4.3(b)(2), 4.3A(e), or 4.14A(i) of the Farm Credit Act “shall be treated” as a final order issued under section 5.25 for purposes of assessing a CMP. Section 5.32(a) also states that “[a]ny such institution or person who violates any provision of the [Farm Credit] Act or any regulation issued under this Act shall forfeit and pay a civil penalty of not more that $500 per day for each day during which such violation continues.”
The maximum CMP in § 622.61(a) for a violation of a final order issued under section 5.25 or 5.26 of the Farm Credit Act is currently $1,100.
Multiplying $1,100 by 39.64
percent results in an increase of $436.04. When that number is rounded as required by section 5(a) of the FCPIA Act, the inflation-adjusted maximum remains $1,100.
The maximum CMP in existing § 622.61(a)(2) for a violation of the Farm Credit Act or regulations issued under the Farm Credit Act is $650. When multiplying the existing CMP amount by 12.50 percent, this results in an increase of $81.25. This increase is rounded to $100 as required by section 5(a) of the FCPIA Act, and the inflation-adjusted maximum increases to $750.
The Flood Disaster Protection Act of 1973, as amended by the Reform Act, requires that FCA assess a CMP for a pattern or practice of committing certain specific actions in violation of the National Flood Insurance Program.
Under the Reform Act, which became law in 1994, these CMPs were not to exceed $350 for each violation, and the total amount of penalties assessed for certain violations of the program against any single regulated entity during any calendar year was not to exceed $100,000.
The adjustment calculation for these CMPs is based on the percentage by which the CPI for June 2008 exceeds the CPI for June 2005, the calendar the CMPs were last adjusted. As stated above, the CPI for June 2005 was 194.5, and the CPI for June 2008 was 218.815, resulting in a percentage change of 12.50.
III. Notice and Comment Not Required by Administrative Procedure Act Back to Top
List of Subjects 12 CFR Part 622 Back to Top
PART 622—RULES OF PRACTICE AND PROCEDURE Back to Top
Subpart B—Rules and Procedures for Assessment and Collection of Civil Money Penalties Back to Top
2.Revise § 622.61 to read as follows: § 622.61 Adjustment of civil money penalties by the rate of inflation under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended.
[FR Doc. E9-656 Filed 1-14-09; 8:45 am]
1. See 28 U.S.C. 2461 note. Section 3(2) of the amended FCPIA Act defines a CMP as any penalty, fine, or other sanction that: (1) Either is for a specific monetary amount as provided by Federal law or has a maximum amount provided for by Federal law; (2) is assessed or enforced by an agency pursuant to Federal law; and (3) is assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal courts.
2. The CPI is published by the Department of Labor, Bureau of Statistics, and is available at its Web site: ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt.
3. See 70 FR 12583 (March 15, 2005).
4. As a result of the mathematical calculation for the year 2005 and the required rounding application, the penalty amount remained the same and did not reset. Therefore, in accordance with the FCPIA Act, the calculation for the 2009 adjustment was determined by using the June 1996 CPI of 156.7 and the June 2008 CPI of 218.815 resulting in a percentage change of 39.64 percent.
5. See 42 U.S.C. 4012a.
6. 42 U.S.C. 4012a(f).