[Federal Register Volume 61, Number 213 (Friday, November 1, 1996)]
[Rules and Regulations]
[Pages 56407-56408]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28017]


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FEDERAL RESERVE SYSTEM
12 CFR Part 263

[Docket No. R-0938]


Rules of Practice for Hearings

AGENCY: Board of Governors of the Federal Reserve System.

ACTION: Final rule.

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SUMMARY: The Board of Governors of the Federal Reserve System (Board) 
is amending its Rules of Practice for Hearings to include a section 
listing increases in the maximum amounts of each civil money penalty 
(CMP) under its jurisdiction. The Board is required to enact such 
regulation by the Debt Collection Improvements Act of 1996 (Debt 
Collection Act), which requires agencies to adjust their statutorily 
based civil money penalties to account for inflation.

EFFECTIVE DATE: October 24, 1996.

FOR FURTHER INFORMATION CONTACT: Alan E. Sorcher, Senior Attorney (202/
452-3564), Legal Division, Board of Governors of the Federal Reserve 
System, 20th and C Streets, NW, Washington, DC 20551. For users of 
Telecommunication Device for the Deaf (TDD) only, please contact 
Dorothea Thompson (202/452-3544).

SUPPLEMENTARY INFORMATION: The Debt Collection Act 1 amended the 
Federal Civil Penalties Inflation Adjustment Act of 1990 (Inflation 
Adjustment Act), 28 U.S.C. 2461 note, to require each subject agency to 
enact regulations to adjust each civil money penalty provided by law 
within its jurisdiction for inflation in accordance with an inflation 
adjustment formula stated in section 5(b) of the Inflation Adjustment 
Act. Implementing regulations must be issued within 180 days of 
enactment of the Debt Collection Act, and at least once every four 
years thereafter.
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    \1\  Pub.L. 104-134, section 31001(s), 110 Stat. 1321-358 (Apr. 
26, 1996), codified at 28 U.S.C. 2461 note.
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    The adjustment required is based on the percentage increase in the 
Consumer Price Index between June of the calendar year when the penalty 
amount was last set or adjusted and June of the calendar year preceding 
the adjustment. The statute also provides rules as to rounding off 
these adjustments, and limits the amount of the initial adjustment to 
no more than ten percent of the amount of the civil money penalty. The 
increases in penalty amounts apply only to violations which occur after 
the effective date of this rule.

Public Comment Not Required

    This rule is not subject to the provisions of 5 U.S.C. 553 
requiring notice, public participation, and deferred effective 
amendment. The Debt Collection Act provides Federal agencies with no 
discretion in the adjustment of CMPs to the rate of inflation, and it 
also requires the new regulation to take effect on October 23, 1996. 
Moreover, the regulation that the Board is adopting to implement the 
Debt Collection Act is ministerial, technical, and noncontroversial. 
For these reasons, the Board finds good cause to determine that public 
notice and comment for this new regulation is unnecessary, impractical, 
and contrary to the public interest, pursuant to the Administrative 
Procedure Act (APA), 5 U.S.C. 553(b)(3)(B). These same reasons also 
provide the Board with good cause to adopt an effective date for this 
regulation that is less than 30 days after the date of publication in 
the Federal Register, pursuant to the APA, 5 U.S.C. 553(d).

Regulatory Flexibility Act:

    No significant impact.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
Ch. 3506; 5 CFR 1320 Appendix A.1), the Board reviewed the rule under 
the authority delegated to the Board by the Office of Management and 
Budget. No collections of information pursuant to the Paperwork 
Reduction Act are contained in the final rule.

List of Subjects in 12 CFR Part 263

    Administrative practice and procedure, Claims, Crime, Equal Access 
to Justice, Federal Reserve System, Lawyers, Penalties.

    For the reasons set forth in the preamble, the Board of Governors 
is amending 12 CFR Part 263 as follows:

PART 263--RULES OF PRACTICE FOR HEARINGS

    1. The authority citation for 12 CFR Part 263 is revised to read as 
follows:

    Authority: 5 U.S.C. 504; 12 U.S.C. 248, 324, 504, 505, 1817(j), 
1818, 1828(c), 1831o, 1831p-1, 1847(b), 1847(d), 1884(b), 
1972(2)(F), 3105, 3107, 3108, 3907, 3909; 15 U.S.C. 21, 78o-4,78o-5, 
78u-2; and 28 U.S.C. 2461 note.

Subpart C--Rules and Procedures for Assessment and Collection of 
Civil Money Penalties

    2. A new Sec. 263.65 is added to subpart C to read as follows:


Sec. 263.65  Civil penalty inflation adjustments.

    (a) Inflation adjustments. In accordance with the Federal Civil

[[Page 56408]]

Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note), the 
Board has set forth in paragraph (b) of this section adjusted maximum 
penalty amounts for each civil money penalty provided by law within its 
jurisdiction. The adjusted civil penalty amounts provided in paragraph 
(b) of this section replace only the amounts published in the statutes 
authorizing the assessment of penalties. The authorizing statutes 
contain the complete provisions under which the Board may seek a civil 
money penalty. The increased penalty amounts apply only to violations 
occurring after October 24, 1996.
    (b) Maximum civil money penalties. The maximum civil money 
penalties as set forth in the referenced statutory sections are 
adjusted as follows:
    (1) 12 U.S.C. 324:
    (i) Inadvertently late or misleading reports, inter alia--$2,000.
    (ii) Other late or misleading reports, inter alia--$22,000.
    (iii) Knowingly or recklessly false or misleading reports, inter 
alia--$1,100,000.
    (2) 12 U.S.C. 504, 505, 1817(j)(16), 1818(i)(2) and 1972(F):
    (i) First tier--$5,500.
    (ii) Second tier--$27,500.
    (iii) Third tier--$1,100,000.
    (3) 12 U.S.C. 1832(c)--$1,100.
    (4) 12 U.S.C. 1847(b)--$27,500.
    (5) 12 U.S.C. 1847(d):
    (i) First tier--$2,000.
    (ii) Second tier--$22,000.
    (iii) Third tier--$1,100,000.
    (6) 12 U.S.C. 1884--$110.
    (7) 12 U.S.C. 3909(d)--$1,100.
    (8) 15 U.S.C. 78u-2:
    (i) 15 U.S.C. 78u-2(b)(1)--$5,500 for a natural person and $55,000 
for any other person.
    (ii) 15 U.S.C. 78u-2(b)(2)--$55,000 for a natural person and 
$275,000 for any other person.
    (iii) 15 U.S.C. 78u-2(b)(3)--$110,000 for a natural person and 
$550,000 for any other person.
    (9) 42 U.S.C. 4012a(f)(5):
    (i) For each violation--$350.
    (ii) For the total amount of penalties assessed under 42 U.S.C 
4012a(f)(5) against an institution or enterprise during any calendar 
year--$105,000.

    By order of the Board of Governors of the Federal Reserve 
System, October 28, 1996.
William W. Wiles,
Secretary of the Board.
[FR Doc. 96-28017 Filed 10-31-96; 8:45 am]
BILLING CODE 6210-01-P