Source: https://www.federalregister.gov/documents/2018/01/12/2018-00399/civil-penalty-inflation-adjustments
Timestamp: 2019-05-21 10:51:24
Document Index: 254036487

Matched Legal Cases: ['art 1083', '§\u20091083', '§\u20091083', '§\u20091083', '§\u20091083', 'art 1320']

A Rule by the Consumer Financial Protection Bureau on 01/12/2018
https://www.federalregister.gov/d/2018-00399 https://www.federalregister.gov/d/2018-00399
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.
Monique Chenault, Paralegal Specialist, Office of Regulations, Consumer Financial Protection Bureau, 1700 G Street NW, Washington, DC 20552, at (202) 435-7700.
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 inflation-adjusted 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 “cost-of-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 Start Printed Page 1526adjustment” is 1.02041.[12] Pursuant to the Inflation Adjustment Act and OMB Guidance, the Bureau multiplied each of its civil penalty amounts by the “cost-of-living adjustment” multiplier and rounded to the nearest dollar.[13]
The new penalty amounts that apply to civil penalties assessed after January 15, 2018 are as follows:
Penalty amounts established under 2017 final rule
Consumer Financial Protection Act, 12 U.S.C. 5565(c)(2)(A) Tier 1 penalty $5,526 1.02041 $5,639
Consumer Financial Protection Act, 12 U.S.C. 5565(c)(2)(B) Tier 2 penalty 27,631 1.02041 28,195
Consumer Financial Protection Act, 12 U.S.C. 5565(c)(2)(C) Tier 3 penalty 1,105,241 1.02041 1,127,799
Interstate Land Sales Full Disclosure Act, 15 U.S.C. 1717a(a)(2) Per violation 1,925 1.02041 1,964
Interstate Land Sales Full Disclosure Act, 15 U.S.C. 1717a(a)(2) Annual cap 1,924,589 1.02041 1,963,870
Real Estate Settlement Procedures Act, 12 U.S.C. 2609(d)(1) Per failure 90 1.02041 92
Real Estate Settlement Procedures Act, 12 U.S.C. 2609(d)(1) Annual cap 181,071 1.02041 184,767
Real Estate Settlement Procedures Act, 12 U.S.C. 2609(d)(2)(A) Per failure, where intentional 181 1.02041 185
SAFE Act, 12 U.S.C. 5113(d)(2) Per violation 27,904 1.02041 28,474
Truth in Lending Act, 15 U.S.C. 1639e(k)(1) First violation 11,053 1.02041 11,279
Truth in Lending Act, 15 U.S.C. 1639e(k)(2) Subsequent violations 22,105 1.02041 22,556
The Bureau issues this final rule under the Federal Civil Penalties Inflation Adjustment Act of 1990,[14] as amended by the Debt Collection Improvement Act of 1996 [15] and further amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,[16] which requires the Bureau to adjust for inflation the civil penalties within its jurisdiction according to a statutorily prescribed formula.
Under the APA, notice and opportunity for public comment are not required if the Bureau finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest.[17] Pursuant to this final rule, § 1083.1 is amended to update the civil penalty amounts. The 2018 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 the civil penalties annually notwithstanding section 553 of the APA,[18] and OMB Guidance reaffirms that agencies need not complete a notice-and-comment process before making the annual adjustments for inflation.[19] For these reasons, the Bureau has determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary. Therefore, the amendment is adopted in final form.
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.[20] At a minimum, the Bureau believes the annual adjustments to the civil penalty amounts in § 1083.1 fall under the third exception to section 553(d). The Bureau finds that there is good cause to make the amendments effective on January 15, 2018. The amendments to § 1083.1 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 by January 15 of each year. Moreover, the Inflation Adjustment Act directs agencies to adjust the civil penalties annually notwithstanding section 553 of the APA,[21] and OMB Guidance reaffirms that agencies need not provide a delay in effective date for the annual adjustments for inflation.[22]
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), CFPB will submit a report containing this rule and other required information to the U.S. Senate, the U.S. 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).
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(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:
12 U.S.C. 5565(c)(2)(A) Tier 1 penalty $5,639
12 U.S.C. 5565(c)(2)(B) Tier 2 penalty 28,195
12 U.S.C. 5565(c)(2)(C) Tier 3 penalty 1,127,799
15 U.S.C. 1717a(a)(2) Per violation 1,964
15 U.S.C. 1717a(a)(2) Annual cap 1,963,870
12 U.S.C. 2609(d)(1) Per failure 92
12 U.S.C. 2609(d)(1) Annual cap 184,767
12 U.S.C. 2609(d)(2)(A) Per failure, where intentional 185
12 U.S.C. 5113(d)(2) Per violation 28,474
15 U.S.C. 1639e(k)(1) First violation 11,279
15 U.S.C. 1639e(k)(2) Subsequent violations 22,556
(b) The adjustments in paragraph (a) of this section shall apply to civil penalties assessed after January 15, 2018, regardless of when the violation for which the penalty is assessed occurred.
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.
12. 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.
19. 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.
22. 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.
24. 44 U.S.C. 3506; 5 CFR part 1320.
[FR Doc. 2018-00399 Filed 1-11-18; 8:45 am]