[Federal Register Volume 72, Number 8 (Friday, January 12, 2007)]
[Notices]
[Pages 1514-1515]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-359]
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FARM CREDIT SYSTEM INSURANCE CORPORATION
Adjusting Civil Money Penalties for Inflation
AGENCY: Farm Credit System Insurance Corporation.
ACTION: Notice.
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SUMMARY: This notice assesses the need for cost-of-living adjustments
to the civil money penalties (CMPs) that the Farm Credit System
Insurance Corporation (FCSIC) may impose under the Farm Credit Act of
1971, as amended. The Federal Civil Penalties Inflation Adjustment Act
of 1990, as amended by the Debt Collection Improvement Act of 1996,
requires all Federal agencies with statutory authority to impose CMPs,
to regularly evaluate those CMPs and to adjust them periodically for
inflation, so they continue to maintain their deterrent value.
Consequently, FCSIC is issuing this notice concerning any required
adjustments to the CMPs.
FOR FURTHER INFORMATION CONTACT: Alan Glenn, Director of Risk
Management, Farm Credit System Insurance Corporation, McLean, VA 22102,
(703) 883-4384, TTY (703) 883-4390; or Jane M. Virga, Senior Counsel,
Office of General Counsel, Farm Credit Administration, McLean, VA
22102-5090, (703) 883-4020, TTY (703) 883-4020.
SUPPLEMENTARY INFORMATION:
Background
A. Statutes Concerning Inflation Adjustment of Civil Money Penalties
The Federal Civil Penalties Inflation Adjustment Act of 1990 (FCPIA
Act),\1\ as amended by the Debt Collection Improvement Act of 1996
(DCIA),\2\ provides for the regular evaluation of CMPs and requires
FCSIC, and every Federal agency with authority to impose CMPs,\3\ to
ensure that CMPs continue to
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maintain their deterrent values. An agency must enact regulations that
adjust its CMPs pursuant to the inflation adjustment formula of the
FCPIA Act. The amended FCPIA Act specifies that inflation-adjusted CMPs
will apply only to violations that occur after the effective date of
the adjustment.
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\1\ Pub. L. 101-410, 104 Stat. 890 (October 5, 1990), codified
at 28 U.S.C. 2461 note.
\2\ Pub. L. 104-134, title III, section 31001(s), 110 Stat.
1321-373 (April 26, 1996), codified at 28 U.S.C. 2461 note.
\3\ Under the amended FCPIA Act, a CMP is defined 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. All three requirements must be met for a fine to be
defined as a CMP.
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The inflation adjustment is based on the percentage increase in the
Consumer Price Index (CPI) for all consumers (CPI-U).\4\ Specifically,
the term cost-of-living adjustment is defined as the percentage (if
any) for each civil monetary penalty by which the Consumer Price Index
for the month of June of the calendar year preceding the adjustment,
exceeds 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, any increase to a CMP that is
adjusted for inflation must be rounded using a method prescribed by the
FCPIA Act. Agencies do not have discretion in choosing whether to
adjust a CMP, by how much to adjust a CMP, or the methods used to
determine the adjustment.
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\4\ The CPI is published by the Department of Labor, Bureau of
Labor Statistics, and is available at its Web site: ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt.
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B. CMPs Imposed Pursuant to Section 5.65 of the Farm Credit Act
First, section 5.65(c) of the Farm Credit Act, as amended (Act)
provides that any insured Farm Credit System bank that willfully fails
or refuses to file any certified statement or pay any premium required
under this part shall be subject to a penalty of not more than $100 for
each day that such violations continue, which penalty the Corporation
may recover for its use. 12 U.S.C. 2277a-14(c). Second, section 5.65(d)
of the Act provides that, except with the prior written consent of the
Farm Credit Administration, it shall be unlawful for any person
convicted of any criminal offense involving dishonesty or a breach of
trust to serve as a director, officer, or employee of any System
institution. 12 U.S.C. 2277a-14(d). For each willful violation of
section 5.65(d), the institution involved shall be subject to a penalty
of not more than $100 for each day during which the violation
continues, which the Corporation may recover for its use.
As adjusted for inflation pursuant to the requirements of the DCIA,
the current regulation at 12 CFR 1411.1, which was promulgated in 2001,
provides that FCSIC can impose a maximum penalty of $117 per day for a
violation under section 5.65(c) and (d) of the Act.
1. Mathematical Calculation
The adjustment calculation will be based on the percentage by which
the CPI for June 2006 exceeds the CPI for June 2001.
According to the Bureau of Labor Statistics, the CPI for June 2001
was 178, and the CPI for June 2006 was 202.9, resulting in a percentage
change of 14.0 percent.
2. Penalty Amounts Remain the Same in Sec. 1411.1
The maximum CMP in 12 CFR 1411.1 for a violation of section 5.65(c)
or (d) of the Act is currently $117. Multiplying $117 by 14 percent
results in $16.38. When that number is rounded as required by the FCPIA
Act,\5\ the inflation-adjusted maximum remains the same.
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\5\ Any increase must be rounded to the nearest multiple of $100
in the case of penalties greater than $100 but less than or equal to
$1,000. Therefore, $16.38 is rounded to the nearest multiple of
$100, which is $0.
Dated: January 9, 2007.
Roland Smith,
Secretary, Farm Credit System Insurance Corporation Board.
[FR Doc. E7-359 Filed 1-11-07; 8:45 am]
BILLING CODE 6710-01-P