[Federal Register Volume 85, Number 9 (Tuesday, January 14, 2020)]
[Rules and Regulations]
[Pages 2012-2014]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-00364]
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BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Part 1083
Civil Penalty Inflation Adjustments
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Final rule.
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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, 2020.
FOR FURTHER INFORMATION CONTACT: Rachel Ross, Attorney-Advisor; Kristen
Phinnessee, Senior Counsel, Office of Regulations, at (202) 435-7700.
If you require this document in an alternative electronic format,
please contact [email protected].
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\ 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 (IFR) to make the initial catch-up
adjustments to civil penalties within the Bureau's jurisdiction.\5\ The
June 2016 IFR created a new part 1083 and in Sec. 1083.1 established
the inflation-adjusted maximum amounts for each civil penalty within
the Bureau's jurisdiction.\6\ The Bureau 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, section 31001(s)(1), 110 Stat. 1321,
1321-373.
\3\ Public Law 114-74, section 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 Bureau was not
obligated to solicit comments for the interim final rule, the Bureau
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 Bureau
annually adjusted its civil penalty amounts, as required by the Act,
through rules issued in January 2017, January 2018, and January
2019.\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 to
the Exec. Dep'ts & Agencies from Russell T. Vought, Acting Director,
Office of Mgmt. & Budget at 4 (Dec. 16, 2019), available at https://www.whitehouse.gov/wp-content/uploads/2019/12/M-20-05.pdf.
\9\ 82 FR 3601 (Jan. 12, 2017); 83 FR 1525 (Jan. 12, 2018); 84
FR 517 (Jan. 31, 2019).
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Specifically, the Act directs Federal agencies to adjust annually
each civil penalty provided by law within the jurisdiction of the
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
[[Page 2013]]
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 Memorandum to the Exec. Dep'ts & Agencies from
Russell T. Vought, Acting Director, Office of Mgmt. & Budget (Dec.
16, 2019), available at https://www.whitehouse.gov/wp-content/uploads/2019/12/M-20-05.pdf.
\13\ See Inflation Adjustment Act section 2, codified at 28
U.S.C. 2461 note.
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For the 2020 annual adjustment, the multiplier reflecting the
``cost-of-living adjustment'' is 1.01764.\14\
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\14\ Memorandum to the Exec. Dep'ts & Agencies from Russell T.
Vought, Acting Director, Office of Mgmt. & Budget (Dec. 16, 2019),
available at https://www.whitehouse.gov/wp-content/uploads/2019/12/M-20-05.pdf.
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II. Adjustment
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.\15\
The new penalty amounts that apply to civil penalties assessed after
January 15, 2020, are as follows:
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\15\ Inflation Adjustment Act section 4, codified at 28 U.S.C.
2461 note.
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Penalty
amounts OMB ``cost-of-
Law Penalty description established living New penalty
under 2019 adjustment'' amount
final rule multiplier
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Consumer Financial Protection Act, 12 Tier 1 penalty.......... $5,781 1.01764 $5,883
U.S.C. 5565(c)(2)(A).
Consumer Financial Protection Act, 12 Tier 2 penalty.......... 28,906 1.01764 29,416
U.S.C. 5565(c)(2)(B).
Consumer Financial Protection Act, 12 Tier 3 penalty.......... 1,156,242 1.01764 1,176,638
U.S.C. 5565(c)(2)(C).
Interstate Land Sales Full Disclosure Per violation........... 2,014 1.01764 2,050
Act, 15 U.S.C. 1717a(a)(2).
Interstate Land Sales Full Disclosure Annual cap.............. 2,013,399 1.01764 2,048,915
Act, 15 U.S.C. 1717a(a)(2).
Real Estate Settlement Procedures Act, Per failure............. 94 1.01764 96
12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act, Annual cap.............. 189,427 1.01764 192,768
12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act, Per failure, where 190 1.01764 193
12 U.S.C. 2609(d)(2)(A). intentional.
SAFE Act, 12 U.S.C. 5113(d)(2)........ Per violation........... 29,192 1.01764 29,707
Truth in Lending Act, 15 U.S.C. First violation......... 11,563 1.01764 11,767
1639e(k)(1).
Truth in Lending Act, 15 U.S.C. Subsequent violations... 23,125 1.01764 23,533
1639e(k)(2).
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III. Procedural Requirements
A. Administrative Procedure Act
Under the Administrative Procedure Act, 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.\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
Bureau 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\ Memorandum to the Exec. Dep'ts & Agencies from Russell T.
Vought, Acting Director, Office of Mgmt. & Budget (Dec. 16, 2019),
available at https://www.whitehouse.gov/wp-content/uploads/2019/12/M-20-05.pdf.
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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 Bureau believes the annual
adjustments to the civil penalty amounts in Sec. 1083.1(a) 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, 2020. The
amendments to Sec. [thinsp]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\ [thinsp]Memorandum to the Exec. Dep'ts & Agencies from
Russell T. Vought, Acting Director, Office of Mgmt. & Budget (Dec.
16, 2019), available at https://www.whitehouse.gov/wp-content/uploads/2019/12/M-20-05.pdf.
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B. Regulatory Flexibility Act
Because no notice of proposed rulemaking is required, the
Regulatory Flexibility Act does not require an initial or final
regulatory flexibility analysis.\22\
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\22\ 5 U.S.C. 603(a), 604(a).
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C. Paperwork Reduction Act
The Bureau has determined that this final rule does not impose any
new or revise any existing recordkeeping, reporting, or disclosure
requirements on covered entities or members of the public that would be
collections of information requiring approval by the
[[Page 2014]]
Office of Management and Budget under the Paperwork Reduction Act.\23\
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\23\ 44 U.S.C. 3501-3521.
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D. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Bureau 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 Bureau 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:
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Adjusted maximum
Law Penalty description civil penalty
amount
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12 U.S.C. 5565(c)(2)(A)....... Tier 1 penalty....... $5,883
12 U.S.C. 5565(c)(2)(B)....... Tier 2 penalty....... 29,416
12 U.S.C. 5565(c)(2)(C)....... Tier 3 penalty....... 1,176,638
15 U.S.C. 1717a(a)(2)......... Per violation........ 2,050
15 U.S.C. 1717a(a)(2)......... Annual cap........... 2,048,915
12 U.S.C. 2609(d)(1).......... Per failure.......... 96
12 U.S.C. 2609(d)(1).......... Annual cap........... 192,768
12 U.S.C. 2609(d)(2)(A)....... Per failure, where 193
intentional.
12 U.S.C. 5113(d)(2).......... Per violation........ 29,707
15 U.S.C. 1639e(k)(1)......... First violation...... 11,767
15 U.S.C. 1639e(k)(2)......... Subsequent violations 23,533
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(b) The adjustments in paragraph (a) of this section shall apply to
civil penalties assessed after January 15, 2020, whose associated
violations occurred on or after November 2, 2015.
Dated: January 8, 2020.
Thomas Pahl,
Policy Associate Director, Bureau of Consumer Financial Protection.
[FR Doc. 2020-00364 Filed 1-13-20; 8:45 am]
BILLING CODE 4810-AM-P