[Federal Register Volume 63, Number 106 (Wednesday, June 3, 1998)]
[Notices]
[Pages 30226-30227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-14611]
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FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL
Assessment of Civil Money Penalties
AGENCY: Federal Financial Institutions Examination Council (FFIEC).
ACTION: Notice of revised policy statement.
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SUMMARY: The FFIEC Task Force on Supervision, acting under delegated
authority, has revised the 1980 Interagency Policy Regarding the
Assessment of Civil Money Penalties by the Federal Financial
Institutions Regulatory Agencies (1980 CMP Policy). The revised policy
statement specifies factors that the Federal financial institutions
regulatory agencies should take into consideration in deciding whether,
and in what amounts, civil money penalty assessment proceedings should
be initiated. The revised policy statement supersedes the 1980 CMP
Policy.
EFFECTIVE DATE: June 3, 1998.
FOR FURTHER INFORMATION CONTACT: The FFIEC is comprised of the Office
of the Comptroller of the Currency (OCC), the Board of Governors of the
Federal Reserve System (Board), the Federal Deposit Insurance
Corporation (FDIC), the Office of Thrift Supervision (OTS), and the
National Credit Union Administration (NCUA) (collectively, the
agencies). Questions regarding this notice and the revised policy
statement may be addressed to the FFIEC contact. Agency specific
questions should be addressed to the appropriate agency contact.
FFIEC: Keith Todd, Acting Executive Secretary, Federal Financial
Institutions Examination Council, (202) 634-6526, 2100 Pennsylvania
Avenue NW, Suite 200, Washington, DC 20037.
OCC: Carolyn Amundson, Senior Attorney, Enforcement & Compliance
Division, (202) 874-5371, 250 E Street SW, Washington, DC 20219.
Board: Nancy Oakes, Senior Attorney, Division of Banking
Supervision and
[[Page 30227]]
Regulation, (202) 452-2743, Board of Governors of the Federal Reserve
System, 20th and C Streets NW, Washington, DC 20551.
FDIC: Dan Austin, Review Examiner, Division of Supervision, (202)
898-6774, Federal Deposit Insurance Corporation, 550 17th Street NW,
Washington DC 20429.
OTS: Richard Stearns, Deputy Chief Counsel, Office of Enforcement,
(202) 906-7966, Office of Thrift Supervision, 1700 G Street NW,
Washington, DC 20552.
NCUA: John Ianno, Senior Trial Attorney, Office of General Counsel,
(703) 518-6540, National Credit Union Administration, 1775 Duke Street,
Alexandria, VA 22314-3428.
SUPPLEMENTARY INFORMATION: The FFIEC Task Force on Supervision, acting
under delegated authority, is giving notice that it has revised its
1980 CMP Policy (45 FR 59423; Sept. 9, 1980). The revised policy
statement, published in full text later in this Federal Register
notice, updates the 1980 CMP Policy. The revised policy statement:
(1) Specifies the factors the agencies should take into
consideration in deciding whether, and in what amounts, to initiate
civil money penalty proceedings;
(2) Eliminates references to interagency coordination of civil
money penalty proceedings, because such coordination is addressed in a
separate interagency policy (FFIEC, Interagency Coordination of Formal
Corrective Action by the Federal Bank Regulatory Agencies);
(3) Eliminates references to the statutes authorizing the agencies
to initiate civil money penalty proceedings or the authority pursuant
to the statutes;
(4) Eliminates references to the agencies' rules of practice and
procedure for civil money penalty proceedings; and
(5) Specifies that the amount of a civil money penalty may be
greater than the economic gain in order to deter future misconduct.
The FFIEC Task Force on Supervision, acting under delegated
authority, has recommended that the agencies adopt, through separate
actions, the revised policy statement.
The revised policy statement reads as follows:
Interagency Policy Regarding the Assessment of Civil Money
Penalties by the Federal Financial Institutions Regulatory Agencies
This supervisory policy provides general guidance concerning the
criteria used by the Federal financial institutions regulatory agencies
(agencies) in the assessment of civil money penalties under statutes
that require consideration of the five following factors in setting the
amount of fines:\1\
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\1\ See generally 12 U.S.C. 1786(k)(2)(G) and 1818(i)(2)(G).
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(1) Size of financial resources;
(2) Good faith;
(3) Gravity of the violation;
(4) History of previous violations; and
(5) Other factors that justice may require.
The principles set forth in this policy apply to penalties assessed
both by consent and through formal enforcement proceedings.
The agencies generally are authorized, under these statutes, to
assess civil money penalties for violations of:
(1) Any law or regulation;
(2) Any final or temporary order, including a cease and desist,
suspension, removal, or prohibition order;
(3) Any condition imposed in writing in connection with the grant
of any application or other request;
(4) Any written agreement; and
(5) Regulatory reporting requirements.
Under certain circumstances, the agencies may also assess fines for
unsafe or unsound practices and breaches of fiduciary duty.
In determining the amount and the appropriateness of initiating a
civil money penalty assessment proceeding under statutes requiring
consideration of the above-mentioned five statutory
factors,2 the agencies have identified the following factors
as relevant:
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\2\ Some federal laws authorizing the Federal financial
institutions regulatory agencies to assess fines, such as the civil
money penalty provisions of section 102(f) of the Flood Disaster
Protection Act of 1973, as amended, 42 U.S.C. 4012a(f), and section
21B of the Securities Exchange Act of 1934, 15 U.S.C. 78u-2, do not
require the consideration of the five statutory factors.
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(1) Evidence that the violation or practice or breach of fiduciary
duty was intentional or was committed with a disregard of the law or
with a disregard of the consequences to the institution;
(2) The duration and frequency of the violations, practices, or
breaches of fiduciary duty;
(3) The continuation of the violations, practices, or breach of
fiduciary duty after the respondent was notified or, alternatively, its
immediate cessation and correction;
(4) The failure to cooperate with the agency in effecting early
resolution of the problem;
(5) Evidence of concealment of the violation, practice, or breach
of fiduciary duty or, alternatively, voluntary disclosure of the
violation, practice or breach of fiduciary duty;
(6) Any threat of loss, actual loss, or other harm to the
institution, including harm to the public confidence in the
institution, and the degree of such harm;
(7) Evidence that a participant or his or her associates received
financial gain or other benefit as a result of the violation, practice,
or breach of fiduciary duty;
(8) Evidence of any restitution paid by a participant of losses
resulting from the violation, practice, or breach of fiduciary duty;
(9) History of prior violation, practice, or breach of fiduciary
duty, particularly where they are similar to the actions under
consideration;
(10) Previous criticism of the institution or individual for
similar actions;
(11) Presence or absence of a compliance program and its
effectiveness;
(12) Tendency to engage in violations of law, unsafe or unsound
banking practices, or breaches of fiduciary duty; and
(13) The existence of agreements, commitments, orders, or
conditions imposed in writing intended to prevent the violation,
practice, or breach of fiduciary duty.
The agencies will give additional consideration in cases where the
violation, practice, or breach causes quantifiable, economic benefit or
loss. In those cases, removal of the benefit or recompense of the loss
usually will be insufficient, by itself, to promote compliance with
statutory and regulatory requirements. The penalty amount should
reflect a remedial purpose and should provide a deterrent to future
misconduct.
The agencies intend these factors to provide guidance on the
appropriateness of a civil money penalty, in a manner consistent with
the statutes authorizing such an action. This policy does not preclude
any agency from considering any other matter relevant to the civil
money penalty assessment.
Dated: May 28, 1998.
Keith Todd,
Acting Executive Secretary, Federal Financial Institutions Examination
Council.
[FR Doc. 98-14611 Filed 6-2-98; 8:45 am]
BILLING CODE 6210-01-P, 6720-01-P, 6714-01-P, 4810-33-P, 7535-01-P