[Federal Register Volume 65, Number 238 (Monday, December 11, 2000)]
[Rules and Regulations]
[Pages 77250-77252]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-31165]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 19

[Docket No. 00-33]
RIN 1557-AB88


Rules of Practice and Procedure; Civil Money Penalty Inflation 
Adjustments

AGENCY: Office of the Comptroller of the Currency, Treasury.

ACTION: Final rule.

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SUMMARY: The Office of the Comptroller of the Currency (OCC) is 
amending its rules of practice and procedure to adjust the maximum 
amount, as set by statute, of each civil money penalty (CMP) within its 
jurisdiction to account for inflation. This action is required under 
the Federal Civil Penalties Inflation Adjustment Act of 1990 (Inflation 
Adjustment Act), as amended by the Debt Collection Improvement Act of 
1996.

DATES: This rule is effective December 11, 2000.

FOR FURTHER INFORMATION CONTACT: Jean Campbell, Attorney, or Mark 
Tenhundfeld, Assistant Director, Legislative and Regulatory Activities 
Division, (202) 874-5090, Office of the Comptroller of the Currency, 
250 E Street, SW., Washington, DC 20219.

SUPPLEMENTARY INFORMATION:

Background

    The Inflation Adjustment Act \1\ requires the OCC, as well as other 
Federal agencies with CMP authority, to publish regulations to adjust 
each CMP authorized by a law that the agency has jurisdiction to 
administer. The purpose of these adjustments is to maintain the 
deterrent effect of CMPs and to promote compliance with the law. The 
Inflation Adjustment Act requires adjustments to be made at least once 
every four years following the initial adjustment. The OCC's prior 
adjustment to each CMP was published in the Federal Register on January 
22, 1997, \2\ and became effective that same day.
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    \1\ 28 U.S.C. 2461 note.
    \2\ See 62 FR 3199, January 22, 1997.
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    The Inflation Adjustment Act requires that the adjustment reflect 
the percentage increase in the Consumer Price Index between June of the 
calendar year preceding the adjustment and June of the calendar year in 
which the amount was last set or adjusted. The Inflation Adjustment Act 
defines the Consumer Price Index as the Consumer Price Index for all 
urban consumers published by the Department of Labor (``CPI-U'').\3\ In 
addition, the Inflation Adjustment Act provides rules for rounding off 
increases,\4\ and provides that any increase in a CMP applies only to 
violations that occur after the date of the adjustment.

Description of the Rule
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    \3\ See 28 U.S.C. 2461 note.
    \4\ See id. The statute's rounding rules require that an 
increase be rounded to the nearest multiple of: $10 in the case of 
penalties less than or equal to $100; $100 in the case of penalties 
greater than $100 but less than or equal to $1,000; $1,000 in the 
case of penalties greater than $1,000 but less than or equal to 
$10,000; $5,000 in the case of penalties greater than $10,000 but 
less than or equal to $100,000; $10,000 in the case of penalties 
greater than $100,000 but less than or equal to $200,000; and 
$25,000 in the case of penalties greater than $200,000.
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    This final rule adjusts the amount for each type of CMP that the 
OCC has jurisdiction to impose in accordance with these statutory 
requirements. It does so by revising the table contained in section 
19.240 of our regulations. The table identifies the statutes that 
provide the OCC with CMP authority, describes the different tiers of 
penalties provided in each statute (as applicable), and sets out the 
inflation-adjusted maximum penalty that the OCC may impose pursuant to 
each statutory provision.
    The inflation adjustment for the CMPs was calculated by comparing 
the CPI-U for June 1996 (156.7) with the CPI-U for June 1999 
(166.2),\5\ resulting in an inflation adjustment of 6.1 percent.\6\ The 
amount of each CMP was multiplied by the appropriate percentage and the 
resulting dollar amount was rounded up or down according to the 
rounding requirements of the statute. In some cases, rounding resulted 
in no adjustment to the CMP. The table below shows both the present 
CMPs and inflation adjusted CMPs. The table as published in the rule 
includes only the CMPs as of the effective date of this rule.
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    \5\ The Department of Labor (DOL) computes the CPI-U using two 
different base time periods, 1967 and 1982-1984, and the Inflation 
Adjustment Act does not specify which of these base periods should 
be used to calculate the inflation adjustment. The OCC has used the 
DOL's CPI-U with 1982-84 as the base period because it reflects the 
most current method of computing the CPI-U.
    \6\ According to the statute, the inflation adjustment is 
computed by comparing the CPI-U for June of the year in which the 
CMPs were ``last set or adjusted'' with CPI-U for June ``of the 
calendar year preceding [sic] the adjustment.'' 28 U.S.C. 2461 note. 
Therefore, a different formula is required for three CMPs that did 
not increase when the OCC made its initial inflation adjustment in 
1997. These CMPs--the $2,000 penalties under 12 U.S.C. 164 and 12 
U.S.C. 3110(c) and the 4350 [penalty under 42 U.S.C. 4012a(f)(5)--
did not increase as a result to application of the rounding rules. 
For those penalties that were not adjusted in 1997, we have used the 
year in which the CMP was last set by enactment. See footnotes a and 
b to the table.

[[Page 77251]]



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                                                                     Amount of       Amount of       Adjusted
      U.S. Code citation           Description        Maximum     increase  (6.1     increase         maximum
                                                      penalty        percent)     after rounding      penalty
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12 U.S.C. 93(b), 504,           Tier 1..........           5,500             336  ..............           5,500
 1817(j)(16), 1818(i)(2), and
 1972(2)(F).
                                Tier 2..........          27,500           1,678  ..............          27,500
                                Tier 3..........       1,100,000          67,100          75,000       1,175,000
12 U.S.C. 164 and 3110(c).....  Tier 1..........           2,000         \a\ 678             200           2,200
                                Tier 2..........          22,000           1,342  ..............          22,000
                                Tier 3..........       1,100,000          67,100          75,000       1,175,000
12 U.S.C. 1832(c) and           ................           1,100              67  ..............           1,100
 3909(d)(1).
12 U.S.C. 1884................  ................             110               7  ..............             110
12 U.S.C. 3110(a).............  ................          27,500           1,678  ..............          27,500
15 U.S.C. 78u-2(b)............  Tier 1 (natural            5,500             336  ..............           5,500
                                 person).
                                Tier 1 (other             55,000           3,355           5,000          60,000
                                 person).
                                Tier 2 (natural           55,000           3,355           5,000          60,000
                                 person).
                                Tier 2 (other            275,000          16,775          25,000         300,000
                                 person).
                                Tier 3 (natural          110,000           6,710          10,000         120,000
                                 person).
                                Tier 3 (other            550,000          33,550          25,000         575,000
                                 person).
42 U.S.C. 4012a(f)(5).........  Per violation...             350          \b\ 43  ..............             350
                                Per year........         105,000           6,405          10,000        115,000
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\a\ This penalty was enacted as part of the Financial Institutions Reform, Recovery, and Enforcement Act of
  1989. Pub. L. 101-73, 103 Stat. 183 (August 9, 1989). The amount did not change when the OCC adjusted the CMPs
  for inflation in 1997. Therefore, the percentage increase was calculated by comparing the CPI-U for June 1989
  (124.1) to the CPI-U for June 1999 (166.2), resulting in an inflation adjustment of 33.9 percent. The
  corresponding dollar amount is $678, which would be rounded to an increase of $1,000. However, according to
  the Inflation Adjustment Act, the initial adjustment of a CMP may not exceed 10 percent of such penalty. Thus,
  the amount of the increase is capped at $200.
\b\ This penalty was enacted in the Riegle Community Development and Regulatory Improvement Act of 1994
  (RCDRIA). Pub. L. 103-325, 108 Stat. 2160 (September 23, 1994). The amount did not change when the OCC
  adjusted the CMPs for inflation in 1997. Therefore, the percentage increase was calculated by comparing the
  CPI-U for June 1994 to the CPI-U for June 1999, resulting in an increase of 12.3 percent.

    Section 19.241 states that the adjustments made in section 19.240 
apply only to violations that occur after December 11, 2000.
    The OCC intends to readjust these amounts in the year 2004 and 
every four years thereafter, assuming there are no further changes to 
the mandate imposed by the Inflation Adjustment Act.

Public Notice and Comment and Delayed Effective Date Not Required

    Under the Administrative Procedure Act (APA), an agency may 
dispense with public notice and an opportunity for comment if the 
agency finds, for good cause, that these procedural requirements are 
``impracticable, unnecessary, or contrary to the public interest.'' \7\ 
As described earlier in the Supplementary Information, the Debt 
Collection Act provides the OCC no discretion in calculating the amount 
of the civil penalty adjustment. The OCC is, accordingly, unable to 
vary the amount of the adjustment to reflect any views or suggestions 
provided by commenters. In that case, notice and comment are 
unnecessary, and there is, in the opinion of the OCC, good cause to 
dispense with those procedures.
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    \7\ 5 U.S.C. 553(b)(B).
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    Both the APA and the RCDRIA require that the effective date of the 
OCC's regulations generally be delayed.\8\ Both statutes contain 
exceptions if the agency finds good cause to dispense with the delayed 
effective date. The amendment adopted in this regulation does not 
substantively affect the rights or obligations of national banks, nor 
does it impose any new compliance requirements upon them. It merely 
adjusts the maximum amounts of civil penalties according to a 
predetermined formula. Moreover, the timing of the adjustment is set by 
operation of the law that requires the OCC to publish regulations every 
four years following the initial adjustment.\9\ Under these 
circumstances, the OCC finds good cause to dispense with the APA and 
RCDRIA delayed effective date provisions. Accordingly, the adjustment 
to the OCC's civil penalty schedule is effective immediately upon 
publication in the Federal Register.
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    \8\ See 5 U.S.C. 553(d)(APA), 12 U.S.C. 4802 (RCDRIA).
    \9\ The Inflation Adjustment Act required the initial adjustment 
to be made within 180 days following enactment of the statute, that 
is, by October 23, 1996.
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Regulatory Flexibility Act

    The Regulatory Flexibility Act applies only to rules for which an 
agency publishes a general notice of proposed rulemaking pursuant to 5 
U.S.C. 553(b).\10\ Because the OCC has determined for good cause that 
the APA does not require public notice and comment on this final rule, 
we are not publishing a general notice of proposed rulemaking. Thus, 
the Regulatory Flexibility Act does not apply to this final rule.
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    \10\ See 5 U.S.C. 601(2).
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Executive Order 12866

    The OCC has determined that this final rule is not a significant 
regulatory action under Executive Order 12866.

Unfunded Mandates Reform Act of 1995

    The OCC has determined that this final rule will not result in 
expenditures by state, local, and tribal governments, or by the private 
sector, of $100 million or more in any one year. Accordingly, a 
budgetary impact statement is not required under section 202 of the 
Unfunded Mandates Reform Act of 1995.

List of Subjects in 12 CFR Part 19

    Administrative practice and procedure, Crime, Equal access to 
justice, Investigations, National banks, Penalties, Securities.

Authority and Issuance

    For the reasons set out in the preamble, part 19 of chapter I of 
title 12 of the Code of Federal Regulations is amended as follows:

PART 19--RULES OF PRACTICE AND PROCEDURE

    1. The authority citation for part 19 is revised to read as 
follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93a, 93(b), 164, 
505, 1817, 1818, 1820, 1831o, 1972, 3102, 3108(a), 3909 and 4717; 15 
U.S.C. 78(h) and (i), 78o-4(c), 78o-5, 78q-1, 78u, 78u-2, 78u-3, and 
78w; 28 U.S.C.

[[Page 77252]]

2461 note; 31 U.S.C. 330 and 5321; and 42 U.S.C. 4012a.


    2. Subpart O is revised to read as follows:

Subpart O--Civil Money Penalty Inflation Adjustments


Sec. 19.240  Inflation adjustments.

    The maximum amount of each civil money penalty within the OCC's 
jurisdiction is adjusted in accordance with the Federal Civil Penalties 
Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note) as follows:

------------------------------------------------------------------------
                                                               Adjusted
        U.S. Code citation                Description          maximum
                                                               penalty
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12 U.S.C. 93(b), 504,              Tier 1..................        5,500
 1817(j)(16), 1818(i)(2), and      Tier 2..................       27,500
 1972(2)(F).                       Tier 3..................    1,175,000
12 U.S.C. 164 and 3110(c)........  Tier 1..................        2,200
                                   Tier 2..................       22,000
                                   Tier 3..................    1,175,000
12 U.S.C. 1832(c) and 3909(d)(1).  ........................        1,100
12 U.S.C. 1884...................  ........................          110
12 U.S.C. 3110(a)................  ........................       27,500
15 U.S.C. 78u-2(b)...............  Tier 1 (natural person).        5,500
                                   Tier 1 (other person)...       60,000
                                   Tier 2 (natural person).       60,000
                                   Tier 2 (other person)...      300,000
                                   Tier 3 (natural person).      120,000
                                   Tier 3 (other person)...      575,000
42 U.S.C. 4012a(f)(5)............  Per violation...........          350
                                   Per year................      115,000
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Sec. 19.241  Applicability.

    The adjustments in Sec. 19.240 apply to violations that occur after 
December 11, 2000.

    Dated: December 1, 2000.
John D. Hawke, Jr.,
Comptroller of the Currency.
[FR Doc. 00-31165 Filed 12-8-00; 8:45 am]
BILLING CODE 4810-33-P