[Federal Register Volume 69, Number 194 (Thursday, October 7, 2004)]
[Rules and Regulations]
[Pages 60077-60081]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-22537]



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  Federal Register / Vol. 69, No. 194 / Thursday, October 7, 2004 / 
Rules and Regulations  

[[Page 60077]]



NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 747


Civil Monetary Penalty Inflation Adjustment

AGENCY: National Credit Union Administration (NCUA).

ACTION: Final rule.

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SUMMARY: Congress, in the Federal Civil Penalties Inflation Adjustment 
Act of 1990, as amended by the Debt Collection Improvement Act of 1996, 
required all federal agencies with the authority to impose civil 
monetary penalties (CMPs) to regularly evaluate those CMPs to ensure 
that they continue to maintain their deterrent value. In order to 
comply with Congress' mandate to adjust CMPs for inflation at least 
every four years, NCUA is issuing this final rule to implement the 
required adjustments to the CMPs authorized by the Federal Credit Union 
Act and other relevant laws.

DATES: Effective November 1, 2004.

FOR FURTHER INFORMATION CONTACT: Allan Meltzer, Associate General 
Counsel, or Jon Canerday, Trial Attorney, Office of General Counsel, 
NCUA, 1775 Duke Street, Alexandria, Virginia 22314, or telephone (703) 
518-6540.

SUPPLEMENTARY INFORMATION: 

A. Background

    The Debt Collection Improvement Act of 1996 \1\ (DCIA) amended the 
Federal Civil Penalties Inflation Adjustment Act of 1990 \2\ (FCPIA 
Act) to require every Federal agency to enact regulations that adjust 
each civil monetary penalty (CMP) \3\ provided by law under its 
jurisdiction by the rate of inflation pursuant to the inflation 
adjustment formula in section 5(b) of the FCPIA Act. Each Federal 
agency was required to issue these implementing regulations by October 
23, 1996, and at least once every 4 years thereafter. Section 6 of the 
amended FCPIA Act specifies that inflation-adjusted CMPs will only 
apply to violations that occur after the effective date of the 
adjustment. The inflation adjustment is based on the percentage 
increase in the Consumer Price Index (CPI).\4\ Specifically, section 
5(b) of the FCPIA Act defines the term ``cost-of-living adjustment'' as 
``the percentage (if any) for each civil monetary penalty by which--(1) 
The Consumer Price Index for the month of June of the calendar year 
preceding the adjustment, exceeds (2) the Consumer Price Index for the 
month of June of the calendar year in which the amount of such civil 
monetary penalty was last set or adjusted pursuant to law.'' 
Furthermore, each CMP that has been adjusted for inflation must be 
rounded to a number prescribed by section 5(a) of the FCPIA Act.\5\
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    \1\ Pub. L. 104-134, 31001(s), 110 Stat. 1321-373, (Apr. 26, 
1996). The Provision is codified at 28 U.S.C. 2461 note.
    \2\ Pub. L. 101-410, 104 Stat. 890, (Oct. 5, 1990), also 
codified at 28 U.S.C. 2461 note.
    \3\ Section 3(2) of the amended FCPIA Act defines a CMP as any 
penalty, fine, or other sanction that: (1) Either is for a specific 
monetary amount as provided by Federal law or has a maximum amount 
provided for by Federal law; (2) is assessed or enforced by an 
agency pursuant to Federal law; and (3) is assessed or enforced 
pursuant to an administrative proceeding or a civil action in the 
Federal courts.
    \4\ The CPI is published by the Department of Labor, Bureau of 
Statistics, and is available at its Web site: http://data.bls.gov/cgi-bin/surveymost.
    \5\ In 2000, NCUA recognized that the rounding provision of the 
FCPIA Act was capable of differing interpretations. Since then, the 
Comptroller General has interpreted the rounding requirements of the 
FCPIA Act the same way as NCUA did in calculating the 2000 inflation 
adjustments. Comp. Gen. B-290021, 2002 U.S. Comp. Gen. LEXIS 266, 
July 15, 2002.
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    The CMPs which NCUA is authorized to impose were last adjusted by 
NCUA in either 1996 or 2000. For those CMPs that were adjusted in 2000, 
the current adjustment will be the percentage by which the CPI for the 
month of June 2003 exceeds the CPI for the month of June 2000. 
According to the Bureau of Labor Statistics, the CPI for the month of 
June 2000 was 172.4 and the CPI for the month of June 2003 was 183.7. 
The percentage by which the 2003 figure exceeds the 2000 figure is 6.55 
percent. Thus, the CMPs that were last adjusted in 2000 should be 
increased by 6.55 percent to arrive at the new adjusted amounts (before 
required rounding).
    For those CMPs that were adjusted in 1996, the current adjustment 
will be the percentage by which the CPI for the month of June 2003 
exceeds the CPI for the month of June 1996. According to the Bureau of 
Labor Statistics, the CPI for the month of June 1996 was 156.7 and the 
CPI for the month of June 2003 was 183.7. The percentage by which the 
2003 figure exceeds the 1996 figure is 17.23 percent. The CMPs that 
were last adjusted in 1996 should be increased by 17.23 percent to 
arrive at the new adjusted amounts (before required rounding).

B. Mathematical Calculations of the Adjustments

1. 12 U.S.C. 1782a(a)(3)

    NCUA is authorized to require credit unions to periodically provide 
reports of condition. The failure to submit a required report or the 
submission of a false or misleading report subjects a credit union to 
three levels of CMPs, depending upon the reasons for noncompliance.
Calculation of the Adjustment
    The CMPs authorized by 12 U.S.C. 1782a(a)(3) were last adjusted by 
NCUA in 2000.\6\ Therefore, these CMPs should be multiplied by 6.55 
percent to arrive at the new adjusted amounts (before required 
rounding).
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    \6\ The previous inflation adjustments were made to 12 U.S.C. 
1782. That provision has been redesignated as 1782a.
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    The maximum CMP authorized by 12 U.S.C. 1782a(a)(3) for an 
inadvertent failure to submit a report or the inadvertent submission of 
a false or misleading report is $2,000 for each day the failure 
continues or such false or misleading information is not corrected. 
After the required adjustment for inflation in 2000, the maximum 
penalty was increased to $2,200 for each day. Multiplying the current 
penalty of $2,200 by 6.55 percent results in an increase of $144.10. 
When that number is rounded as required by the FCPIA Act,\7\ the 
inflation-adjusted maximum remains $2,200.
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    \7\ ``Any increase determined under this subsection shall be 
rounded to the nearest- * * * (3) multiple of $1,000 in the case of 
penalties greater than $1,000 but less than or equal to $10,000.'' 
Section 5(a), FCPIA Act. Therefore, $144.10 is rounded to the 
nearest multiple of $1,000 or to $0.

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[[Page 60078]]

    The maximum CMP authorized by 12 U.S.C. 1782a(a)(3) for a non-
inadvertent failure to submit a report or the non-inadvertent 
submission of a false or misleading report is $20,000 for each day the 
failure continues or such false or misleading information is not 
corrected. After the required adjustment for inflation in 2000, the 
maximum penalty was increased to $22,000 for each day. Multiplying the 
current penalty of $22,000 by 6.55 percent results in an increase of 
$1,441. When that number is rounded as required by the FCPIA Act,\8\ 
the inflation-adjusted maximum remains $22,000.
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    \8\ ``Any increase determined under this subsection shall be 
rounded to the nearest- * * * (4) multiple of $5,000 in the case of 
penalties greater than $10,000 but less than or equal to $100,000.'' 
Section 5(a), FCPIA Act. Therefore, $1,441 is rounded to the nearest 
multiple of $5,000 or to $0.
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    The maximum CMP authorized by 12 U.S.C. 1782a(a)(3) for a failure 
to submit a report or the submission of a false or misleading report 
done knowingly or with reckless disregard is $1,000,000 or 1 percent of 
the total assets of the credit union, whichever is less, for each day 
the failure continues or such false or misleading information is not 
corrected. After the required adjustment for inflation in 2000, the 
maximum penalty was increased to $1,100,000 for each day. Multiplying 
the current penalty of $1,100,000 by 6.55 percent results in an 
increase of $72,050. When that number is rounded as required by the 
FCPIA Act,\9\ the inflation-adjusted maximum becomes $1,175,000 or 1 
percent of the total assets of the credit union, whichever is less, per 
day.
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    \9\ ``Any increase determined under this subsection shall be 
rounded to the nearest- * * * (6) multiple of $25,000 in the case of 
penalties greater than $200,000.'' Section 5(a), FCPIA Act. 
Therefore, $72,050 is rounded to the nearest multiple of $75,000 or 
to $75,000.
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2. 12 U.S.C. 1782a(d)(2)

    In a provision similar to that discussed above, NCUA is authorized 
to require each credit union to provide periodic certified statements 
of the amount of insured shares in the credit union, as well as to pay 
required deposits into the National Credit Union Share Insurance Fund. 
The failure to submit a required certified statement or the submission 
of a false or misleading statement subjects a credit union to three 
levels or tiers of CMPs, depending upon the reasons for noncompliance.
Calculation of the Adjustment
    The CMPs authorized by 12 U.S.C. 1782a(d)(2) were last adjusted by 
NCUA in 2000. Therefore, these CMPs should be multiplied by 6.55 
percent to arrive at the new adjusted amounts (before required 
rounding).
First Tier CMPs
    The maximum CMP authorized by 12 U.S.C. 1782a(d)(2)(A) for an 
inadvertent failure to timely submit a certified statement or an 
inadvertent submission of a false or misleading certified statement is 
$2,000 for each day the failure continues or such false or misleading 
information is not corrected. After the required adjustment for 
inflation in 2000, the maximum penalty was increased to $2,200 for each 
day. Multiplying the current penalty of $2,200 by 6.55 percent results 
in an increase of $144.10. When that number is rounded as required by 
the FCPIA Act,\10\ the inflation-adjusted maximum remains $2,200.
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    \10\ ``Any increase determined under this subsection shall be 
rounded to the nearest- * * * (3) multiple of $1,000 in the case of 
penalties greater than $1,000 but less than or equal to $10,000.'' 
Section 5(a), FCPIA Act. Therefore, $144.10 is rounded to the 
nearest multiple of $1,000 or to $0.
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Second Tier CMPs
    The maximum CMP authorized by 12 U.S.C. 1782a(d)(2)(B) for a non-
inadvertent failure to timely submit a certified statement, or a non-
inadvertent submission of a false or misleading certified statement, or 
the failure or refusal to pay any required deposit or premium for 
insurance is $20,000 for each day the failure continues or such false 
or misleading information is not corrected. After the required 
adjustment for inflation in 2000, the maximum penalty was increased to 
$22,000 for each day. Multiplying the current penalty of $22,000 by 
6.55 percent results in an increase of $1,441. When that number is 
rounded as required by the FCPIA Act,\11\ the inflation-adjusted 
maximum remains $22,000.
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    \11\ ``Any increase determined under this subsection shall be 
rounded to the nearest- * * * (4) multiple of $5,000 in the case of 
penalties greater than $10,000 but less than or equal to $100,000.'' 
Section 5(a), FCPIA Act. Therefore, $1,441 is rounded to the nearest 
multiple of $5,000 or to $0.
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Third Tier CMPs
    The maximum CMP authorized by 12 U.S.C. 1782a(d)(2)(C) for a 
failure to submit a report or the submission of a false or misleading 
report done knowingly or with reckless disregard is $1,000,000 or 1 
percent of the total assets of the credit union, whichever is less, for 
each day the failure continues or such false or misleading information 
is not corrected. After the required adjustment for inflation in 2000, 
the maximum penalty was increased to $1,100,000 for each day. 
Multiplying the current penalty of $1,100,000 by 6.55 percent results 
in an increase of $72,050. When that number is rounded as required by 
the FCPIA Act,\12\ the inflation-adjusted maximum becomes $1,175,000 or 
1 percent of the total assets of the credit union, whichever is less, 
per day.
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    \12\ ``Any increase determined under this subsection shall be 
rounded to the nearest- * * * (6) multiple of $25,000 in the case of 
penalties greater than $200,000.'' Section 5(a), FCPIA Act. 
Therefore, $72,050 is rounded to the nearest multiple of $75,000 or 
to $75,000.
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3. 12 U.S.C. 1785(e)(3)

    Pursuant to 12 U.S.C. 1785(e)(1), NCUA is authorized to promulgate 
regulations to provide minimum standards with which each insured credit 
union must comply with respect to security devices and procedures to 
discourage robberies, burglaries and larcenies and to assist in the 
identification and apprehension of persons who commit such acts. A 
credit union that violates such a regulation is subject to a CMP for 
each day the violation continues.
Calculation of the Adjustment
    The CMPs authorized by 12 U.S.C. 1785(e)(3) were last adjusted by 
NCUA in 2000. Therefore, these CMPs should be multiplied by 6.55 
percent to arrive at the new adjusted amounts (before required 
rounding).
    The maximum CMP authorized by 12 U.S.C. 1785(e)(3) for non-
compliance with NCUA security regulations is $100 for each day the 
violation continues. After the required adjustment for inflation in 
2000, the maximum penalty was increased to $110 for each day. 
Multiplying the current penalty of $110 by 6.55 percent results in an 
increase of $7.21. When that number is rounded as required by the FCPIA 
Act,\13\ the inflation-adjusted maximum remains $110.
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    \13\ ``Any increase determined under this subsection shall be 
rounded to the nearest- * * * (2) multiple of $100 in the case of 
penalties greater than $100 but less than or equal to $1,000.'' 
Section 5(a), FCPIA Act. Therefore, $7.21 is rounded to the nearest 
multiple of $100 or to $0.
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4. 12 U.S.C. 1786(k)(2)

    NCUA is authorized to impose three levels or tiers of CMPs upon 
insured credit unions or institution-affiliated parties for certain 
conduct. First and second tier CMPs were not increased for inflation in 
2000 because the amount of the increase was not large enough as a 
result of the rounding rules. Because these CMPs were last adjusted for 
inflation in 1996, they should now be increased by 17.23 percent to 
arrive at the new adjusted amounts (before

[[Page 60079]]

required rounding). Third tier CMPs were increased for inflation in 
2000 and therefore, should now be increased by 6.55 percent (before 
required rounding).
First Tier CMPs
    First tier CMPs, 12 U.S.C. 1786(k)(2)(A), may be imposed for the 
violation of any law or regulation, the violation of certain final 
orders or temporary orders, the violation of conditions imposed in 
writing by the NCUA Board, or the violation of any written agreement 
between the credit union and NCUA. The statute provides that first tier 
CMPs shall not be more than $5,000 for each day the violation 
continues. After the required adjustment for inflation in 1996, the 
maximum penalty was increased to $5,500 for each day. Multiplying the 
current penalty of $5,500 by 17.23 percent results in an increase of 
$947.65. When that number is rounded as required by the FCPIA Act,\14\ 
the inflation-adjusted maximum for a first tier CMP becomes $6,500.
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    \14\ ``Any increase determined under this subsection shall be 
rounded to the nearest- * * * (3) multiple of $1,000 in the case of 
penalties greater than $1,000 but less than or equal to $10,000.'' 
Section 5(a), FCPIA Act. Therefore, $947.65 is rounded to the 
nearest multiple of $1,000 or to $1,000.
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Second Tier CMPs
    Second tier CMPs, 12 U.S.C. 1786(k)(2)(B), are authorized for 
violations described in first tier CMPs, the reckless engaging in an 
unsafe or unsound practice in conducting the affairs of a credit union, 
or the breach of any fiduciary duty, when the violation, practice or 
breach is part of a pattern of misconduct, or causes or is likely to 
cause more than a minimal loss to the credit union, or results in 
pecuniary gain or other benefit. The statute provides a maximum second 
tier CMP of $25,000 for each day the violation, practice or breach 
continues. After the required 1996 adjustment for inflation, the 
maximum penalty was increased to $27,500 per day. Multiplying the 
current penalty of $27,500 by 17.23 percent results in an increase of 
$4,738.25. When that number is rounded as required by the FCPIA 
Act,\15\ the inflation-adjusted maximum for a second tier CMP becomes 
$32,500.
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    \15\ ``Any increase determined under this subsection shall be 
rounded to the nearest- * * * (4) multiple of $5,000 in the case of 
penalties greater than $10,000 but less than or equal to $100,000.'' 
Section 5(a), FCPIA Act. Therefore, $4,738.25 is rounded to the 
nearest multiple of $5,000 or to $5,000.
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Third Tier CMPs
    Third tier CMPs, 12 U.S.C. 1786(k)(2)(C), may be imposed for any of 
the acts described in second tier CMPs that cause a substantial loss to 
the credit union or a substantial pecuniary gain or other benefit. The 
amount of third tier CMPs depends upon the status of the respondent 
required to pay the CMP, 12 U.S.C. 1786(k)(2)(D). For a person other 
than an insured credit union, under the statute, the maximum third tier 
CMP is $1,000,000 for each day the violation, practice or breach 
continues. For an insured credit union, the statute provides a daily 
maximum CMP of the lesser of $1,000,000 or 1 percent of the total 
assets of the credit union. In 2000, the maximum CMP for a person other 
than an insured credit union was increased for inflation to $1,175,000 
per day. At the same time, the maximum CMP for an insured credit union 
was increased to the lesser of $1,175,000 or 1 percent of the total 
assets of the credit union. Multiplying the current penalty of 
$1,175,000 by 6.55 percent results in an increase of $76,962.50. When 
that number is rounded as required by the FCPIA Act,\16\ the new 
maximum inflation-adjusted third tier CMP becomes $1,250,000.
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    \16\ ``Any increase determined under this subsection shall be 
rounded to the nearest- * * * (6) multiple of $25,000 in the case of 
penalties greater than $200,000.'' Section 5(a), FCPIA Act. 
Therefore, $76,962.50 is rounded to the nearest multiple of $25,000 
or to $75,000.
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5. 42 U.S.C. 4012a(f)

    Pursuant to 42 U.S.C. 4012a(f), NCUA is authorized to impose CMPs 
against a credit union that is found to have a pattern or practice of 
committing certain specified actions in violation of the National Flood 
Insurance Program.
Calculation of the Adjustment
    The CMPs authorized by 42 U.S.C. 4012a(f) were last adjusted by 
NCUA in 2000. Therefore, these CMPs should be multiplied by 6.55 
percent to arrive at the new adjusted amounts (before required 
rounding).
    The maximum CMP authorized by 42 U.S.C. 4012a(f) is $350 for each 
violation, up to a maximum of $100,000 per calendar year. After the 
required adjustments for inflation in 2000, the maximum penalty was 
increased to $385 for each day, up to a maximum of $110,000 per 
calendar year. Multiplying the current penalty of $385 by 6.55 percent 
results in an increase of $25.22. When that number is rounded as 
required by the FCPIA Act,\17\ the inflation-adjusted maximum remains 
$385. Multiplying the current annual maximum of $110,000 by 6.55 
percent results in an increase of $7,205. When that number is rounded 
as required by the FCPIA Act,\18\ the inflation-adjusted annual maximum 
penalty becomes $120,000 per calendar year.
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    \17\ ``Any increase determined under this subsection shall be 
rounded to the nearest- * * * (2) multiple of $100 in the case of 
penalties greater than $100 but less than or equal to $1,000.'' 
Section 5(a), FCPIA Act. Therefore, $25.22 is rounded to the nearest 
multiple of $100 or to $0.
    \18\ ``Any increase determined under this subsection shall be 
rounded to the nearest- * * * (5) multiple of $10,000 in the case of 
penalties greater than $100,000 but less than or equal to 
$200,000.'' Section 5(a), FCPIA Act. Therefore, $7,205 is rounded to 
the nearest multiple of $10,000 or to $10,000.
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    The NCUA Board now adopts this final rule to adjust the forgoing 
CMPs for the rate of inflation, as required by the FCPIA Act. As 
provided in the final rule, the revised CMP amounts will only apply to 
violations that occur after the effective date of the final rule.

C. Regulatory Procedures

Final Rule Under the Administrative Procedures Act

    The FCPIA Act requires adjustments of CMPs for inflation to occur 
at least every four years. Additionally, the FCPIA Act provides federal 
agencies with no discretion in the adjustment of CMPs for inflation. 
Thus, NCUA is unable to vary the amount of the adjustments to reflect 
any views or suggestions provided by commenters. Further, the 
regulation is ministerial and technical. For all of these reasons, the 
NCUA 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).

Regulatory Flexibility Act

    The Regulatory Flexibility Act requires NCUA to prepare an analysis 
to describe any significant economic impact a proposed rule may have on 
a substantial number of small credit unions (those under ten million 
dollars in assets). The proposed rule would not have a significant 
economic impact on a substantial number of small credit unions, and, 
therefore, a regulatory flexibility analysis is not required.

Paperwork Reduction Act

    NCUA has determined that the proposed rule would not increase 
paperwork requirements under the Paperwork Reduction Act of 1995 and 
regulations of the Office of Management and Budget.

Executive Order 13132

    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their regulatory

[[Page 60080]]

actions on state and local interests. In adherence to fundamental 
federalism principles, NCUA, an independent regulatory agency as 
defined in 44 U.S.C. 3502(5), voluntarily complies with the Executive 
Order. This final rule will apply to all federally-insured credit 
unions, but it will not have substantial direct effects on the states, 
on the relationship between the national government and the states, or 
on the distribution of power and responsibilities among the various 
levels of government. NCUA has determined the final rule does not 
constitute a policy that has federalism implications for purposes of 
the Executive Order.

The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    NCUA has determined that this rule will not affect family well-
being within the meaning of section 654 of the Treasury and General 
Government Appropriations Act, 1999, Pub. L. 105-277, 112 Stat. 2681 
(1998).

Small Business Regulatory Enforcement Fairness Act

    The Small Business Regulatory Enforcement Fairness Act of 1996 
(Pub. L. 104-21) provides generally for congressional review of agency 
rules. A reporting requirement is triggered in instances where NCUA 
issues a final rule as defined by Section 551 of the Administrative 
Procedures Act. 5 U.S.C. 551. The Office of Management and Budget has 
reviewed this rule and has determined that for purposes of the Small 
Business Regulatory Enforcement Fairness Act of 1996, it is not a major 
rule.

List of Subjects in 12 CFR Part 747

    Credit unions, Civil monetary penalties.

    By the National Credit Union Administration Board on September 
27, 2004.
Mary Rupp,
Secretary of the Board.


0
Accordingly, the NCUA amends 12 CFR part 747 as follows:

PART 747--ADMINISTRATIVE ACTIONS, ADJUDICATIVE HEARINGS, RULES OF 
PRACTICE AND PROCEDURE, AND INVESTIGATIONS

0
1. The authority citation for part 747 continues to read as follows:

    Authority: 12 U.S.C. 1766, 1782, 1784, 1785, 1786, 1787; 42 
U.S.C. 4012a; Pub. L. 101-410; Pub. L. 104-134.


0
2. Part 747, Subpart K is revised to read as follows:

Subpart K--Inflation Adjustment of Civil Monetary Penalties


Sec.  747.1001  Adjustment of civil money penalties by the rate of 
inflation.

    (a) NCUA is required by the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (Public Law 101-410, 104 Stat. 890, as amended 
(28 U.S.C. 2461 note)) to adjust the maximum amount of each civil money 
penalty within its jurisdiction by the rate of inflation. The following 
chart displays those adjustments, as calculated pursuant to the 
statute:

------------------------------------------------------------------------
     U.S. Code citation          CMP description     New maximum amount
------------------------------------------------------------------------
(1) 12 U.S.C. 1782(a)(3)....  Inadvertent failure   $22,000.
                               to submit a report
                               or the inadvertent
                               submission of a
                               false or misleading
                               report.
(2) 12 U.S.C. 1782(a)(3)....  Non-inadvertent       $22,000.
                               failure to submit a
                               report or the non-
                               inadvertent
                               submission of a
                               false or misleading
                               report.
(3) 12 U.S.C. 1782(a)(3)....  Failure to submit a   $1,175,000 or 1
                               report or the         percent of the
                               submission of a       total assets of the
                               false or misleading   credit union,
                               report done           whichever is less.
                               knowingly or with
                               reckless disregard.
(4) 12 U.S.C. 1782(d)(2)(A).  First tier..........  $2,200.
(5) 12 U.S.C. 1782(d)(2)(B).  Second tier.........  $22,000.
(6) 12 U.S.C. 1782(d)(2)(C).  Third tier..........  $1,175,000 or 1
                                                     percent of the
                                                     total assets of the
                                                     credit union,
                                                     whichever is less.
(7) 12 U.S.C. 1785(e)(3)....  Non-compliance with   $110.
                               NCUA security
                               regulations.
(8) 12 U.S.C. 1786(k)(2)(A).  First tier..........  $6,500.
(9) 12 U.S.C. 1786(k)(2)(B).  Second tier.........  $32,500.
(10) 12 U.S.C. 1786(k)(2)(C)  Third tier..........  For a person other
                                                     than an insured
                                                     credit union:
                                                     $1,250,000; For an
                                                     insured credit
                                                     union $1,250,000 or
                                                     1 percent of the
                                                     total assets of the
                                                     credit union,
                                                     whichever is less.
(11) 42 U.S.C. 4012a(f).....  Per violation.......  $385
                              Per calendar year...  $120,000.
------------------------------------------------------------------------


[[Page 60081]]

    (b) The adjustments displayed in paragraph (a) of this section 
apply to acts occurring beginning on November 1, 2004.
[FR Doc. 04-22537 Filed 10-6-04; 8:45 am]
BILLING CODE 7535-01-P