[Federal Register Volume 61, Number 219 (Tuesday, November 12, 1996)]
[Rules and Regulations]
[Pages 57987-57993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28752]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 308


Rules of Practice and Procedure; Civil Money Penalty Adjustments

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Final rule.

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SUMMARY: As required by the Debt Collection Improvement Act of 1996 
(DCIA), the Federal Deposit Insurance Corporation (FDIC) is adopting a 
final regulation that adjusts each civil money penalty (CMP) under its 
jurisdiction by the rate of inflation using the formula prescribed by 
the DCIA. That statute requires all federal agencies to adjust each CMP 
by the rate of inflation and adopt implementing regulations within 180 
days after enactment of the DCIA, and at least once every four years 
thereafter. Any increase in a CMP shall apply only to violations that 
occur after the effective date of this regulation.

EFFECTIVE DATE: November 12, 1996.

FOR FURTHER INFORMATION CONTACT: Andrea Winkler, Counsel, (202) 736-
0762, Federal Deposit Insurance Corporation, 550 17th Street, N.W., 
Washington, D.C. 20429.

SUPPLEMENTARY INFORMATION:

I. Background

    The DCIA amended section 4 of the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (Inflation Adjustment Act) (28 U.S.C. 2461 
note), to require the head of each Federal agency to enact regulations 
within 180 days of the enactment of the DCIA and at least once every 
four years thereafter, that adjust each CMP provided by law within the 
jurisdiction of the agency (with the exception of certain specifically 
listed statutes) by the inflation adjustment formula set forth in 
section 5(b) of the Inflation Adjustment Act. The Inflation Adjustment 
Act requires that each CMP amount be increased by the ``cost of 
living'' adjustment, which is defined as the percentage by which the 
Consumer Price Index (CPI) \1\ for the month of June of the calendar 
year preceding the adjustment exceeds the CPI for the month of June of 
the calendar year in which the amount of the CMP was last set or 
adjusted pursuant to law. Any increase is to be rounded to the nearest 
multiple of $10 in the case of penalties less than or equal to $100; 
multiple of $100 in the case of penalties greater than $100 but less 
than or equal to $1,000; multiple of $1,000 in the case of penalties 
greater than $1,000 but less than or equal to $10,000; multiple of 
$5,000 in the case of penalties greater than $10,000 but less than or 
equal to $100,000; multiple of $10,000 in the

[[Page 57988]]

case of penalties greater than $100,000 but less than or equal to 
$200,000; and multiple of $25,000 in the case of penalties greater than 
$200,000. Under the DCIA, the first adjustment may not exceed ten 
percent of the current penalty amount. Any increase in penalty amounts 
under the DCIA shall apply only to violations which occur after the 
effective date of the increase.
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    \1\ The CPI is compiled by the Bureau of Statistics of the 
Department of Labor.
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    To satisfy the requirements of the DCIA, the FDIC is amending those 
sections of part 308 of its regulations pertaining to its Rules of 
Practice and Procedure which address CMP's. The amount of each CMP 
which the FDIC has jurisdiction to impose has been increased according 
to the prescribed formula.

II. Section-by-Section Summary

Authority Citation

    The authority citation for part 308 has been amended to include a 
reference to the statutes pursuant to which the FDIC assesses CMP's, to 
the Inflation Adjustment Act and to the DCIA.

Section 308.116(b)

    Section 308.116(b) pertains to the amount of any CMP that may be 
assessed for violations of the Change in Bank Control Act of 1978 (12 
U.S.C. 1817(j). This section has been amended by adding a new paragraph 
(4) entitled Adjustment of civil money penalties by the rate of 
inflation pursuant to section 31001(s) of the Debt Collection 
Improvement Act. The amendment reflects the increased penalty amounts 
required by the DCIA for violations occurring after the effective date 
of this regulation. The amendment provides that Tier One penalties will 
increase from a maximum of $5,000 for each day the violation continues 
to a maximum of $5,500 for each day the violation continues; Tier Two 
penalties will increase from a maximum of 25,000 per day for each day 
the violation, practice or breach continues to a maximum of $27,500 for 
each day the violation, practice or breach continues; and Tier Three 
penalties will increase, in the case of a person other than a 
depository institution, from a maximum of $1,000,000 per day for each 
day the violation, practice or breach continues to a maximum of 
$1,100,000 per day for each day the violation, practice or breach 
continues, or in the case of a depository institution, from an amount 
not to exceed the lesser of $1,000,000 or one percent of the total 
assets of such institution for each day the violation, practice or 
breach continues to an amount not to exceed the lesser of $1,100,000 or 
one percent of the total assets of such institution for each day the 
violation, practice or breach continues.

Section 308.132

    Section 308.132 pertains to the manner in which the FDIC assesses 
CMP's. Paragraph (c)(2) of that section pertains to the CMP's imposed 
pursuant to section 7(a) of the FDIA (12 U.S.C. 1817(a)) for the late 
filing of a bank's Reports of Condition and Income (Call Reports) or 
for the submission of false or misleading Call Reports or information. 
Paragraph (c)(2)(ii) has been amended to reflect the increase in the 
Tier Two penalty amount from a maximum of $20,000 per day for each day 
the failure to file a Call Report continues to a maximum of $22,000 per 
day for each day the failure to file continues.
    Paragraph (c)(2)(iii) pertains to penalties for the submission of 
false or misleading Call Reports or information. Paragraph 
(c)(2)(iii)(B) of that section has been amended to reflect the increase 
in Tier Two penalty amounts from a maximum of $20,000 per day for each 
day the information is not corrected to a maximum of $22,000 per day 
for each day the information is not corrected. Paragraph (c)(2)(iii)(C) 
of that section reflects the increase in Tier Three penalties from an 
amount not to exceed the lesser of $1,000,000 or one percent of the 
total assets of the institution for each day the information is not 
corrected to an amount not to exceed the lesser of $1,100,000 or one 
percent of the total assets of such institution for each day the 
information is not corrected. No change has been made to Tier One 
penalty amounts by the DCIA.
    A new paragraph (c)(3), entitled Adjustment of civil money 
penalties by the rate of inflation pursuant to section 31001(s) of the 
Debt Collection Act has been added to reflect the increase in CMP 
amounts for violations which occur after the effective date of this 
regulation, pursuant to the various statutes for which the FDIC has 
jurisdiction.
    Paragraph (c)(3)(i) sets forth the increases for CMP's assessed 
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)). A Tier 
One CMP which may be assessed pursuant to section 8(i)(2)(A) of the 
FDIA (12 U.S.C. 1818(i)(2)(A)) will increase from an amount not to 
exceed $5,000 for each day the violation continues to an amount not to 
exceed $5,500 for each day during which the violation continues. A Tier 
Two CMP which may be assessed pursuant to section 8(i)(2)(B) of the 
FDIA (12 U.S.C. 1818(i)(2)(B)) will increase from an amount not to 
exceed $25,000 for each day during which the violation, practice or 
breach continues to an amount not to exceed $27,500 for each day during 
which the violation, practice or breach continues. A Tier Three CMP 
which may be assessed pursuant to section 8(i)(2)(C)(12 U.S.C. 
1818(i)(2)(C)) will increase from an amount not to exceed, in the case 
of any person other than an insured depository institution $1,000,000 
or, in the case of any insured depository institution, an amount not to 
exceed the lesser of $1,000,000 or 1 percent of the total assets of 
such institution for each day during which the violation, practice, or 
breach continues to an amount not to exceed, in the case of any person 
other than an insured depository institution $1,100,000 or, in the case 
of any insured depository institution, an amount not to exceed the 
lesser of $1,100,000 or 1 percent of the total assets of such 
institution for each day during which the violation, practice, or 
breach continues.
    Paragraph (c)(3)(i)((A) of Sec. 308.132 lists a number of statutes 
which provide jurisdiction to the FDIC to assess CMP's under section 
8(i)(2) of the FDIA for violation thereof, including, the Home Mortgage 
Disclosure Act (12 U.S.C. 2804 et seq. and 12 CFR 203.6), the Expedited 
Funds Availability Act (12 U.S.C. 4001 et seq.), the Truth in Savings 
Act (12 U.S.C. 4301 et seq.), the Real Estate Settlement Procedures Act 
(12 U.S.C. 2601 et seq.) 12 CFR Part 3500), the Truth in Lending Act 
(15 U.S.C. 1601 et seq.), the Fair Credit Reporting Act (15 U.S.C. 1681 
et seq.), the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) the 
Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.), the 
Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.) and the Fair 
Housing Act (42 U.S.C. 3601 et seq.). Increases in the amount of any 
CMP which the FDIC may assess for violations of those statutes are the 
same as the increases for section 8(i)(2) penalties.
    Paragraph (c)(3)(ii) of Sec. 308.132 reflects the increases in CMP 
amounts that may be assessed pursuant to section 7(c) of the FDIA for 
late filing or the submission of false or misleading certified 
statements. A Tier One CMP will continue to be assessed pursuant to 
section 7(c)(4)(A) of the FDIA (12 U.S.C. 1817(c)(4)(A)) in an amount 
not to exceed $2,000 for each day during which the failure to file 
continues or the false or misleading information is not corrected. A 
Tier Two CMP which may be assessed pursuant to section 7(c)(4)(B) of 
the FDIA (12 U.S.C. 1817(c)(4)(B)) will increase from an amount not to 
exceed $20,000 for each

[[Page 57989]]

day during which the failure to file continues or the false or 
misleading information is not corrected to an amount not to exceed 
$22,000 for each day during which the failure to file continues or the 
false or misleading information is not corrected. A Tier Three CMP 
which may be assessed pursuant to section 7(c)(4)(C) of the FDIA (12 
U.S.C. 1817(c)(4)(B)) will increase from an amount not to exceed the 
lesser of $1,000,000 or 1 percent of the total assets of the 
institution for each day during which the failure to file continues or 
the false or misleading information is not corrected to an amount not 
to exceed the lesser of $1,100,000 or 1 percent of the total assets of 
the institution for each day during which the failure to file continues 
or the false or misleading information is not corrected.
    Paragraph (c)(3)(iii) of Sec. 308.132 sets forth the increases in 
CMP amounts that may be assessed pursuant to section 10(e)(4) of the 
FDIA (12 U.S.C. 1820(e)(4)) for refusal to allow examination or to 
provide required information during an examination. The CMP which may 
be assessed pursuant to that statute against any affiliate of an 
insured depository institution which refuses to permit a duly-appointed 
examiner to conduct an examination or to provide information during the 
course of an examination as set forth in section 20(b) of the FDIA (12 
U.S.C. 1820(b)), will increase from an amount not to exceed $5,000 for 
each day the refusal continues to an amount not to exceed $5,500 for 
each day the refusal continues.
    Paragraph (c)(3)(iv) of Sec. 308.132 sets forth the increases in 
the amounts of any CMP that may be assessed pursuant to section 
18(a)(3) of the FDIA (12 U.S.C. 1828(a)(3)) for the incorrect display 
of the insurance logo. Such CMP will increase from an amount not to 
exceed $100 for each day the violation continues to an amount not to 
exceed $110 for each day the violation continues.
    Paragraph (c)(3)(v) of Sec. 308.132 sets forth the increase in the 
amount of any CMP that may be assessed pursuant to section 18(h) of the 
FDIA (12 U.S.C. 1828(h)) for failure to file a certified statement or 
to pay an assessment. That amount will increase from a maximum of $100 
for each day the violation continues to an amount not to exceed $110 
for each day the violation continues.
    Paragraph (c)(3)(vi) of Sec. 308.132 sets forth the increase in any 
CMP that may be assessed pursuant to section 19b(j) of the FDIA (12 
U.S.C. 1829b(j)), against an insured depository institution and any 
director, officer or employee thereof who wilfully or through gross 
negligence violates or causes a violation of the recordkeeping 
requirements of that section or its implementing regulations. The CMP 
amount will increase from an amount not to exceed $10,000 per violation 
for each day the violation continues to an amount not to exceed $11,000 
per violation.
    Paragraph (c)(3)(vii) of Sec. 308.132 sets forth the increase in 
the civil fine which may be assessed pursuant to 12 U.S.C. 1832(c) for 
violation of provisions forbidding interest-bearing demand deposit 
accounts. The amount which may be assessed against any depository 
institution which violates the prohibition on deposit or withdrawal 
from interest-bearing accounts via negotiable or transferable 
instruments payable to third parties will increase from a fine of 
$1,000 per violation to a fine of $1,100 per violation.
    Paragraph (c)(3)(viii) of Sec. 308.132 sets forth the increase in 
any CMP that may be assessed pursuant to 12 U.S.C. 1884 for violations 
of security measure requirements. The amount of CMP which may be 
assessed against an institution which violates a rule establishing 
minimum security requirements as set forth in 12 U.S.C. 1882, will 
increase from a CMP not to exceed $100 for each day of the violation to 
a CMP not to exceed $110 for each day of the violation.
    Paragraph (c)(3)(ix) of Sec. 308.132 sets forth the increases in 
the CMP amounts that may be assessed pursuant to the Bank Holding 
Company Act of 1970 for prohibited tying arrangements. A Tier One CMP 
which may be assessed pursuant to 12 U.S.C. 1972(2)(F)(i) will increase 
from an amount not to exceed $5,000 for each day during which the 
violation continues to an amount not to exceed $5,500 for each day 
during which the violation continues. A Tier Two CMP which may be 
assessed pursuant to 12 U.S.C. 1972(2)(F)(ii) will increase from an 
amount not to exceed $25,000 for each day during which the violation, 
practice or breach continues an amount not to exceed $27,500 for each 
day during which the violation, practice or breach continues. A Tier 
Three CMP which may be assessed pursuant to 12 U.S.C. 1972(2)(F)(iii) 
will increase from an amount not to exceed, in the case of any person 
other than an insured depository institution $1,000,000 for each day 
during which the violation, practice, or breach continues to an amount 
not to exceed $1,100,000 for each day during which the violation, 
practice, or breach continues. In the case of any insured depository 
institution, Tier Three penalties will increase from an amount not to 
exceed the lesser of $1,000,000 or 1 percent of the total assets of 
such institution for each day during which the violation, practice, or 
breach continues to an amount not to exceed the lesser of $1,100,000 or 
1 percent of the total assets of such institution for each day during 
which the violation, practice, or breach continues.
    Paragraph (c)(3)(x) of Sec. 308.132 indicates that pursuant to the 
International Banking Act of 1978 (IBA) (12 U.S.C 3108(b)), a CMP may 
be assessed for failure to comply with the requirements of the IBA 
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)). Such 
CMP will increase in the amounts set forth in paragraph (c)(3)(i) of 
Sec. 308.132 which contains the increases for section 8(i)(2).
    Paragraph (c)(3)(xi) of Sec. 308.132 sets forth the increase in CMP 
that may be assessed pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 
1818(i)(2)), as made applicable by 12 U.S.C. 3349(b), where a financial 
institution seeks, obtains, or gives any other thing of value in 
exchange for the performance of an appraisal by a person that the 
institution knows is not a state certified or licensed appraiser in 
connection with a federally related transaction. Such CMP amounts will 
increase in the amounts set forth in paragraph (c)(3)(i) of 
Sec. 308.132 which contains the increases for section 8(i)(2).
    Paragraph (c)(3)(xii) of Sec. 308.132 sets forth that pursuant to 
the International Lending Supervision Act (ILSA) (12 U.S.C. 3909(d)), 
the CMP that may be assessed against any banking institution or any 
officer, director, employee, agent or other person participating in the 
conduct of the affairs of such banking institution will increase from 
an amount not to exceed $1,000 for each day a violation of the ILSA or 
any rule, regulation or order issued pursuant to ILSA continues to an 
amount not to exceed $1,100 for each day such violation continues.
    Paragraph (c)(3)(xiii) of Sec. 308.132 indicates that pursuant to 
the Community Development Banking and Financial Institution Act 
(Community Development Banking Act) (12 U.S.C. 4717(b)) a CMP may be 
assessed for violations of the Community Development Banking Act 
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)). Such 
CMP amounts will increase in the amounts set forth in paragraph 
(c)(3)(i) of Sec. 308.132 which contains the increases for section 
8(i)(2).
    Paragraph (c)(3)(xiv) of Sec. 308.132 sets forth that pursuant to 
section 21B of the Securities Exchange Act of 1934 (Exchange Act) (15 
U.S.C. 78u-2), CMP's may be assessed for violations of

[[Page 57990]]

certain provisions of the Exchange Act, where such penalties are in the 
public interest. The Tier One CMP amounts which may be assessed 
pursuant to 15 U.S.C.78u-2(b)(1) will increase from an amount not to 
exceed $5,000 for a natural person or $50,000 for any other person for 
violations set forth in 15 U.S.C. 78u-2(a), to $5,500 for a natural 
person or $55,000 for any other person. The Tier Two CMP which maybe 
assessed pursuant to 15 U.S.C. 78u-2(b)(2)--for each violation set 
forth in 15 U.S.C. 78u-2(a)--will increase from an amount not to exceed 
$50,000 for a natural person or $250,000 for any other person if the 
act or omission involved fraud, deceit, manipulation, or deliberate or 
reckless disregard of a regulatory requirement, to an amount not to 
exceed $55,000 for a natural person or $275,000 for any other person. 
The Tier Three CMP which may be assessed pursuant to 15 U.S.C. 78u-
2(b)(3) for each violation set forth in 15 U.S.C. 78u-2(a), in an 
amount not to exceed $100,000 for a natural person or $500,000 for any 
other person, if the act or omission involved fraud, deceit, 
manipulation, or deliberate or reckless disregard of a regulatory 
requirement; and such act or omission directly or indirectly resulted 
in substantial losses, or created a significant risk of substantial 
losses to other persons or resulted in substantial pecuniary gain to 
the person who committed the act or omission to an amount not to exceed 
$110,000 for a natural person or $550,000 for any other person.
    Paragraph (c)(3)(xv) of Sec. 308.132 sets forth that the CMP that 
may be assessed pursuant to the Program Fraud Civil Remedies Act (31 
U.S.C. 3802), will increase from an amount of not more than $5,000 per 
day for violations involving false claims and statements to $5,500 per 
day.
    Paragraph (c)(3)(xvi) of Sec. 308.132 sets forth the CMP that may 
be assessed pursuant to the Flood Disaster Protection Act (FDPA)(42 
U.S.C. 4012a(f)) against any regulated lending institution that engages 
in a pattern or practice of violations of the FDPA. The amount of the 
penalty for each violation will remain at $350, however, the annual 
amount which may be assessed will increase from an amount not to exceed 
a total of $100,000 annually to an amount not to exceed a total of 
$105,000 annually.

III. Regulatory Flexibility Act

    Chapter 6 of Title 5 of the United States Code which pertains to 
``The Analysis of Regulatory Functions'' does not apply to the final 
rule regarding part 308. The revision to part 308 is not a ``rule'' for 
purposes of that statute (see 5 U.S.C. 601(2)) as it is not a rule for 
which the FDIC is required to publish a general notice of proposed 
rulemaking under section 553(b) of Title 5 of the United States Code. 
This is because the law leaves the FDIC no discretion with regard to 
the requirement of adjustment or the formula for the amount of CMP 
adjustments to be made, the changes are ministerial, technical and 
noncontroversial and the law requires that the regulation implementing 
the adjustments be made within 180 days of the enactment of the DCIA. 
Therefore, the FDIC has determined for good cause that public notice 
and comment are unnecessary, impracticable, or contrary to the public 
interest and that the rule should be published in final form.

IV. Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA) (Public Law 104-121) provides generally for agencies to report 
rules to Congress and for Congress to review the rules. The reporting 
requirement is triggered in instances where the FDIC issues a final 
rule as defined by the Administrative Procedure Act (APA) at 5 U.S.C. 
551. Because the FDIC is issuing a final rule as defined by the APA, 
the FDIC will file the reports required by SBREFA.
    The Office of Management and Budget has determined that this final 
revision to part 308 does not constitute a ``major'' rule as defined by 
the statute.

V. Exemption From Public Notice and Comment

    Because the law requires the FDIC to amend its rules, provides the 
specific adjustments to be made and leaves the FDIC no discretion in 
calculating the amount of those adjustments, the changes are 
ministerial, technical and noncontroversial, and the law requires that 
the regulation implementing the adjustments be published in the Federal 
Register within 180 days of enactment of the DCIA, the FDIC has 
determined for good cause that public notice and comment is unnecessary 
and impracticable under the APA (5 U.S.C. 553(b)(3)(B)), and that the 
rule should be published in final form.

VI. Effective Date

    For the same reasons that the FDIC for good cause has determined 
that public notice and comment is unnecessary, impractical and contrary 
to the public interest, the FDIC finds that it has good cause to adopt 
an effective date 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)), and therefore, the regulation is effective upon publication.

List of Subjects in 12 CFR Part 308

    Administrative practice and procedure, Banks, banking, Claims, 
Crime, Equal access to justice, Ex parte communications, Hearing 
procedure, Lawyers, Penalties, State nonmember banks.

    For the reasons set out in the preamble, part 308 of chapter III of 
title 12 of the Code of Federal Regulations is amended as set forth 
below:

PART 308--RULES OF PRACTICE AND PROCEDURE

    1. The authority citation for part 308 is revised to read as 
follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 
1817, 1818, 1820, 1828, 1829, 1829b, 1831o, 1832(c), 1884(b), 1972, 
3102, 3108(a), 3349, 3909, 4717; 15 U.S.C. 78 (h) and (i), 78o-4(c), 
78o-5, 78q-1, 78s, 78u, 78u-2, 78u-3, and 78w; 28 U.S.C. 2461 note; 
31 U.S.C. 330, 5321; 42 U.S.C. 4012a; sec. 31001(s), Pub. L. 104-
134, 110 Stat. 1321-358.

    2. Section 308.116 is amended by adding a new paragraph (b)(4) to 
read as follows:


Sec. 308.116  Assessment of penalties.

* * * * *
    (b) * * *
    (4) Adjustment of civil money penalties by the rate of inflation 
pursuant to section 31001(s) of the Debt Collection Improvement Act. 
After November 12, 1996:
    (i) Any person who engages in a violation as set forth in paragraph 
(b)(1) of this section shall forfeit and pay a civil money penalty of 
not more than $5,500 for each day the violation continues.
    (ii) Any person who engages in a violation, unsafe or unsound 
practice or breach of fiduciary duty, as set forth in paragraph (b)(2) 
of this section, shall forfeit and pay a civil money penalty of not 
more than $27,500 for each day such violation, practice or breach 
continues.
    (iii) Any person who knowingly engages in a violation, unsafe or 
unsound practice or breach of fiduciary duty, as set forth in paragraph 
(b)(3) of this section, shall forfeit and pay a civil money penalty not 
to exceed:
    (A) In the case of a person other than a depository institution--
$1,100,000 per day for each day the violation, practice or breach 
continues; or
    (B) In the case of a depository institution--an amount not to 
exceed the lesser of $1,100,000 or one percent of the total assets of 
such institution for

[[Page 57991]]

each day the violation, practice or breach continues.
* * * * *
    3. In Sec. 308.132, paragraph (c)(2) is revised and a new paragraph 
(c)(3) is added to read as follows:


Sec. 308.132  Assessment of penalties.

* * * * *
    (c) * * *
    (2) The Board of Directors or its designee may assess civil money 
penalties pursuant to section 7(a) of the FDIA (12 U.S.C. 1817(a)) as 
follows:
    (i) Late filing--Tier One penalties. In cases in which a bank fails 
to make or publish its Report of Condition and Income (Call Report) 
within the appropriate time periods, a civil money penalty of not more 
than $2,000 per day may be assessed where the bank maintains procedures 
in place reasonably adapted to avoid inadvertent error and the late 
filing occurred unintentionally and as a result of such error; or the 
bank inadvertently transmitted a Call Report which is minimally late.
    (A) First offense. Generally, in such cases, the amount assessed 
shall be $300 per day for each of the first 15 days for which the 
failure continues, and $600 per day for each subsequent day the failure 
continues, beginning on the sixteenth day. For banks with less than 
$25,000,000 in assets, the amount assessed shall be the greater of $100 
per day or \1/1000\th of the bank's total assets (\1/10\th of a basis 
point) for each of the first 15 days for which the failure continues, 
and $200 or \1/500\th of the bank's total assets, \1/5\ of a basis 
point) for each subsequent day the failure continues, beginning on the 
sixteenth day.
    (B) Second offense. Where the bank has been delinquent in making or 
publishing its Call Report within the preceding five quarters, the 
amount assessed for the most current failure shall generally be $500 
per day for each of the first 15 days for which the failure continues, 
and $1,000 per day for each subsequent day the failure continues, 
beginning on the sixteenth day. For banks with less than $25,000,000 in 
assets, those amounts, respectively, shall be \1/500\th of the bank's 
total assets and \1/250\th of the bank's total assets.
    (C) Mitigating factors. The amounts set forth in paragraph 
(c)(2)(i)(A) of this section may be reduced based upon the factors set 
forth in paragraph (b) of this section.
    (D) Lengthy or repeated violations. The amounts set forth in this 
paragraph (c)(2)(i) will be assessed on a case-by-case basis where the 
amount of time of the bank's delinquency is lengthy or the bank has 
been delinquent repeatedly in making or publishing its Call Reports.
    (E) Waiver. Absent extraordinary circumstances outside the control 
of the bank, penalties assessed for late filing shall not be waived.
    (ii) Late filing--Tier Two penalties. Where a bank fails to make or 
publish its Call Report within the appropriate time period, the Board 
of Directors or its designee may assess a civil money penalty of not 
more than $20,000 per day for each day the failure continues. Pursuant 
to the Debt Collection Improvement Act of 1996, for violations which 
occur after November 12, 1996, the maximum Tier Two penalty amount will 
increase to $22,000 per day for each day the failure continues.
    (iii) False or misleading reports or information--(A) Tier One 
penalties. In cases in which a bank submits or publishes any false or 
misleading Call Report or information, the Board of Directors or its 
designee may assess a civil money penalty of not more than $2,000 per 
day for each day the information is not corrected, where the bank 
maintains procedures in place reasonably adapted to avoid inadvertent 
error and the violation occurred unintentionally and as a result of 
such error; or the bank inadvertently transmits a Call Report or 
information which is false or misleading.
    (B) Tier Two penalties. Where a bank submits or publishes any false 
or misleading Call Report or other information, the Board of Directors 
or its designee may assess a civil money penalty of not more than 
$20,000 per day for each day the information is not corrected. Pursuant 
to the Debt Collection Improvement Act of 1996, for violations which 
occur after November 12, 1996, the maximum Tier Two penalty amount will 
increase to $22,000 per day for each day the information is not 
corrected.
    (C) Tier Three penalties. Where a bank knowingly or with reckless 
disregard for the accuracy of any Call Report or information submits or 
publishes any false or misleading Call Report or other information, the 
Board of Directors or its designee may assess a civil money penalty of 
not more than the lesser of $1,000,000 or 1 percent of the bank's total 
assets per day for each day the information is not corrected. Pursuant 
to the Debt Collection Improvement Act of 1996, for violations which 
occur after November 12, 1996, the maximum Tier Three penalty amount 
will increase to the lesser of $1,100,000 per day or 1 percent of the 
bank's total assets per day for each day the information is not 
corrected.
    (D) Mitigating factors. The amounts set forth in this paragraph 
(c)(2) may be reduced based upon the factors set forth in paragraph (b) 
of this section.
    (3) Adjustment of civil money penalties by the rate of inflation 
pursuant to section 31001(s) of the Debt Collection Act. Pursuant to 
section 31001(s) of the Debt Collection Act, for violations which occur 
after November 12, 1996, the Board of Directors or its designee may 
assess civil money penalties in the maximum amounts as follows:
    (i) Civil money penalties assessed pursuant to section 8(i)(2) of 
the FDIA. Tier One civil money penalties may be assessed pursuant to 
section 8(i)(2)(A) of the FDIA (12 U.S.C. 1818(i)(2)(A)) in an amount 
not to exceed $5,500 for each day during which the violation continues. 
Tier Two civil money penalties may be assessed pursuant to section 
8(i)(2)(B) of the FDIA (12 U.S.C. 1818(i)(2)(B)) in an amount not to 
exceed $27,500 for each day during which the violation, practice or 
breach continues. Tier Three civil money penalties may be assessed 
pursuant to section 8(i)(2)(C)(12 U.S.C. 1818(i)(2)(C)) in an amount 
not to exceed, in the case of any person other than an insured 
depository institution $1,100,000 or, in the case of any insured 
depository institution, an amount not to exceed the lesser of 
$1,100,000 or 1 percent of the total assets of such institution for 
each day during which the violation, practice, or breach continues.
    (A) Civil money penalties may be assessed pursuant to section 
8(i)(2) of the FDIA in the amounts set forth in this paragraph 
(c)(3)(i) for violations of various consumer laws, including, the Home 
Mortgage Disclosure Act (12 U.S.C. 2804 et seq. and 12 CFR 203.6), the 
Expedited Funds Availability Act (12 U.S.C. 4001 et seq.), the Truth in 
Savings Act (12 U.S.C. 4301 et seq.), the Real Estate Settlement 
Procedures Act (12 U.S.C. 2601 et seq. and 12 CFR part 3500), the Truth 
in Lending Act (15 U.S.C. 1601 et seq.), the Fair Credit Reporting Act 
(15 U.S.C. 1681 et seq.), the Equal Credit Opportunity Act (15 U.S.C. 
1691 et seq.) the Fair Debt Collection Practices Act (15 U.S.C. 1692 et 
seq.), the Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.) and 
the Fair Housing Act (42 U.S.C. 3601 et seq.) in the amounts set forth 
in paragraphs (c)(3)(i) through (c)(3)(iii) of this section.
    (ii) Civil money penalties assessed pursuant to section 7(c) of the 
FDIA for late filing or the submission false or misleading certified 
statements. Tier One civil money penalties may be assessed pursuant to 
section 7(c)(4)(A) of the FDIA (12 U.S.C. 1817(c)(4)(A)) in

[[Page 57992]]

an amount not to exceed $2,000 for each day during which the failure to 
file continues or the false or misleading information is not corrected. 
Tier Two civil money penalties may be assessed pursuant to section 
7(c)(4)(B) of the FDIA (12 U.S.C. 1817(c)(4)(B)) in an amount not to 
exceed $22,000 for each day during which the failure to file continues 
or the false or misleading information is not corrected. Tier Three 
civil money penalties may be assessed pursuant to section 7(c)(4)(C) in 
an amount not to exceed the lesser of $1,100,000 or 1 percent of the 
total assets of the institution for each day during which the failure 
to file continues or the false or misleading information is not 
corrected.
    (iii) Civil money penalties assessed pursuant to section 10(e)(4) 
of the FDIA for refusal to allow examination or to provide required 
information during an examination. Pursuant to section 10(e)(4) of the 
FDIA (12 U.S.C. 1820(e)(4)), civil money penalties may be assessed 
against any affiliate of an insured depository institution which 
refuses to permit a duly-appointed examiner to conduct an examination 
or to provide information during the course of an examination as set 
forth in section 20(b) of the FDIA (12 U.S.C. 1820(b)), in an amount 
not to exceed $5,500 for each day the refusal continues.
    (iv) Civil money penalties assessed pursuant to section 18(a)(3) of 
the FDIA for incorrect display of insurance logo. Pursuant to section 
18(a)(3) of the FDIA (12 U.S.C. 1828(a)(3)), civil money penalties may 
be assessed against an insured depository institution which fails to 
correctly display its insurance logo pursuant to that section, in an 
amount not to exceed $110 for each day the violation continues.
    (v) Civil money penalties assessed pursuant to section 18(h) of the 
FDIA for failure to file a certified statement or to pay assessment. 
Pursuant to section 18(h) of the FDIA (12 U.S.C. 1828(h)), a civil 
money penalty may be assessed against an insured depository institution 
which wilfully fails or refuses to file a certified statement or pay 
any assessment required under the FDIA in an amount not to exceed $110 
for each day the violation continues.
    (vi) Civil money penalties assessed pursuant to section 19b(j) of 
the FDIA for recordkeeping violations. Pursuant to section 19b(j) of 
the FDIA (12 U.S.C. 1829b(j)), civil money penalties may be assessed 
against an insured depository institution and any director, officer or 
employee thereof who wilfully or through gross negligence violates or 
causes a violation of the recordkeeping requirements of that section or 
its implementing regulations in an amount not to exceed $11,000 per 
violation.
    (vii) Civil fine pursuant to 12 U.S.C. 1832(c) for violation of 
provisions forbidding interest-bearing demand deposit accounts. 
Pursuant to 12 U.S.C. 1832(c), any depository institution which 
violates the prohibition on deposit or withdrawal from interest-bearing 
accounts via negotiable or transferable instruments payable to third 
parties shall be subject to a fine of $1,100 per violation.
    (viii) Civil penalties for violations of security measure 
requirements under 12 U.S.C. 1884. Pursuant to 12 U.S.C. 1884, an 
institution which violates a rule establishing minimum security 
requirements as set forth in 12 U.S.C. 1882, shall be subject to a 
civil penalty not to exceed $110 for each day of the violation.
    (ix) Civil money penalties assessed pursuant to the Bank Holding 
Company Act of 1970 for prohibited tying arrangements. Pursuant to the 
Bank Holding Company Act of 1970, Tier One civil money penalties may be 
assessed pursuant to 12 U.S.C. 1972(2)(F)(i) in an amount not to exceed 
$5,500 for each day during which the violation continues. Tier Two 
civil money penalties may be assessed pursuant to 12 U.S.C. 
1972(2)(F)(ii) in an amount not to exceed $27,500 for each day during 
which the violation, practice or breach continues. Tier Three civil 
money penalties may be assessed pursuant to 12 U.S.C. 1972(2)(F)(iii) 
in an amount not to exceed, in the case of any person other than an 
insured depository institution $1,100,000 for each day during which the 
violation, practice, or breach continues or, in the case of any insured 
depository institution, an amount not to exceed the lesser of 
$1,100,000 or 1 percent of the total assets of such institution for 
each day during which the violation, practice, or breach continues.
    (x) Civil money penalties assessed pursuant to the International 
Banking Act of 1978. Pursuant to the International Banking Act of 1978 
(IBA) (12 U.S.C. 3108(b)), civil money penalties may be assessed for 
failure to comply with the requirements of the IBA pursuant to section 
8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)), in the amounts set forth in 
paragraph (c)(3)(i) of this section.
    (xi) Civil money penalties assessed for appraisal violations. 
Pursuant to 12 U.S.C. 3349(b), where a financial institution seeks, 
obtains, or gives any other thing of value in exchange for the 
performance of an appraisal by a person that the institution knows is 
not a state certified or licensed appraiser in connection with a 
federally related transaction, a civil money penalty may be assessed 
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)) in the 
amounts set forth in paragraph (c)(3)(i) of this section.
    (xii) Civil money penalties assessed pursuant to International 
Lending Supervision Act. Pursuant to the International Lending 
Supervision Act (ILSA) (12 U.S.C. 3909(d)), the CMP that may be 
assessed against any banking institution or any officer, director, 
employee, agent or other person participating in the conduct of the 
affairs of such banking institution is amount not to exceed $1,100 for 
each day a violation of the ILSA or any rule, regulation or order 
issued pursuant to ILSA continues.
    (xiii) Civil money penalties assessed for violations of the 
Community Development Banking and Financial Institution Act. Pursuant 
to the Community Development Banking and Financial Institution Act 
(Community Development Banking Act) (12 U.S.C. 4717(b)) a civil money 
penalty may be assessed for violations of the Community Development 
Banking Act pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 
1818(i)(2)), in the amounts set forth in paragraph (c)(3)(i) of this 
section.
    (xiv) Civil money penalties assessed for violations of the 
Securities Exchange Act of 1934. Pursuant to section 21B of the 
Securities Exchange Act of 1934 (Exchange Act) (15 U.S.C. 78u-2), civil 
money penalties may be assessed for violations of certain provisions of 
the Exchange Act, where such penalties are in the public interest. Tier 
One civil money penalties may be assessed pursuant to 15 U.S.C. 78u-
2(b)(1) in an amount not to exceed $5,500 for a natural person or 
$55,000 for any other person for violations set forth in 15 U.S.C. 78u-
2(a). Tier Two civil money penalties may be assessed pursuant to 15 
U.S.C. 78u-2(b)(2) in an amount not to exceed--for each violation set 
forth in 15 U.S.C. 78u-2(a)--$55,000 for a natural person or $275,000 
for any other person if the act or omission involved fraud, deceit, 
manipulation, or deliberate or reckless disregard of a regulatory 
requirement. Tier Three civil money penalties may be assessed pursuant 
to 15 U.S.C. 78u-2(b)(3) for each violation set forth in 15 U.S.C. 78u-
2(a), in an amount not to exceed $110,000 for a natural person or 
$550,000 for any other person, if the act or omission involved fraud, 
deceit, manipulation, or deliberate or reckless disregard of a 
regulatory requirement; and such act or omission directly or

[[Page 57993]]

indirectly resulted in substantial losses, or created a significant 
risk of substantial losses to other persons or resulted in substantial 
pecuniary gain to the person who committed the act or omission.
    (xv) Civil money penalties assessed for false claims and statements 
pursuant to the Program Fraud Civil Remedies Act. Pursuant to the 
Program Fraud Civil Remedies Act (31 U.S.C. 3802), civil money 
penalties of not more than $5,500 per day may be assessed for 
violations involving false claims and statements.
    (xvi) Civil money penalties assessed for violations of the Flood 
Disaster Protection Act. Pursuant to the Flood Disaster Protection Act 
(FDPA)(42 U.S.C. 4012a(f)), civil money penalties may be assessed 
against any regulated lending institution that engages in a pattern or 
practice of violations of the FDPA in an amount not to exceed $350 per 
violation, and not to exceed a total of $105,000 annually.

    By order of the Board of Directors.

    Dated at Washington, D.C. this 29th day of October, 1996.

Federal Deposit Insurance Corporation.
Jerry L. Langley,
Executive Secretary.
[FR Doc. 96-28752 Filed 11-8-96; 8:45 am]
BILLING CODE 6714-01-P