[Federal Register Volume 73, Number 218 (Monday, November 10, 2008)]
[Rules and Regulations]
[Pages 66493-66497]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-26654]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 19

[Docket ID OCC-2008-0020]
RIN 1557-AD11


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, set forth at 12 CFR part 
19, to adjust the maximum amount of each civil money penalty (CMP) 
within its jurisdiction to administer to account for inflation. This 
action, including the amount of the adjustment, 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. The OCC is also amending part 19 to add to our list of penalties 
a new CMP, which was authorized after the OCC last adjusted its CMPs.

DATES: Effective Date: December 10, 2008.

FOR FURTHER INFORMATION CONTACT: Michele Meyer, Assistant Director, or 
Jean Campbell, Senior Attorney, Legislative and Regulatory Activities 
Division, (202) 874-5090, or David Weber, Counsel, Enforcement and 
Compliance Division, (202) 874-4800, Office of the Comptroller of the 
Currency, 250 E Street, SW., Washington, DC 20219.

SUPPLEMENTARY INFORMATION:

Background

    The Inflation Adjustment Act, 28 U.S.C. 2461 note, requires the 
OCC, as well as other Federal agencies with CMP authority, periodically 
to publish regulations adjusting for inflation 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 November 10, 2004, 69 FR 65067, 
and became effective on December 10, 2004.
    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 year in which the adjustment will be made 
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 (CPI-U) published 
by the Department of Labor.\1\ See 28 U.S.C. 2461 note. In addition, 
the Inflation Adjustment Act provides rules for rounding off 
increases,\2\ and requires that any increase in a CMP apply only to 
violations that occur after the date of the adjustment. Finally, 
section 2 of the Debt Collection Improvement Act amended the Inflation 
Adjustment Act by limiting the initial adjustment of a CMP pursuant to 
the Inflation Adjustment Act to no more than 10 percent of the amount 
set by statute. See 28 U.S.C. 2461 note.
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    \1\ The Department of Labor computes the CPI-U using two 
different base time periods, 1967 and 1982-1984, and the Act does 
not specify which of these base periods should be used to calculate 
the inflation adjustment. The OCC, consistent with the other Federal 
banking agencies, has used the CPI-U with 1982-84 as the base 
period. Data on the CPI-U is available at http://bls.gov.
    \2\ The Act'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. See 28 U.S.C. 2461 note.
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Description of the Final Rule

Inflation Adjustment

    This final rule adjusts the amount for each CMP that the OCC has 
jurisdiction to impose in accordance with the statutory requirements by 
revising the table contained in subpart O of 12 CFR part 19. 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 Act requires that we compute the inflation adjustment by 
comparing the CPI-U for June of the calendar year preceding the 
adjustment with the CPI-U for June of the year in which the CMPs were 
last set or adjusted. See 28 U.S.C. 2461 note. The majority of CMPs 
were adjusted in 2004. For those CMPs, we compared the CPI-U for June 
2007 (208.352) with the CPI-U for June 2004 (189.7). This resulted in 
an inflation adjustment of 9.8 percent. Two penalties were last 
adjusted in 2000.\3\ For those penalties, we compared the CPI-U for 
June 2007 (208.352) with the CPI-U for June 2000 (172.4). This resulted 
in an inflation increase of 20.9 percent. Three penalties were last 
adjusted in 1997.\4\ For those penalties, we compared the CPI-U for 
June 1997 (160.3) with the CPI-U for June 2007 (208.352). This resulted 
in an inflation increase of 30.0 percent.
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    \3\ Those penalties last adjusted in 2000 are authorized by 12 
U.S.C. 164 and 3110(c), Tier 1. See 65 FR 66250 (Dec. 11, 2000).
    \4\ Those penalties last adjusted in 1997 are authorized by 12 
U.S.C. 1832(c), 12 U.S.C. 3909(d)(1), and 12 U.S.C. 1884. See 62 FR 
3199 (Jan. 22, 1997).
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    We multiplied the amount of each CMP by the appropriate percentage 
inflation adjustment, added that amount to the current penalty, and 
rounded the

[[Page 66494]]

resulting dollar amount up or down according to the rounding 
requirements of the Act. In some cases, rounding resulted in no 
adjustment to the CMP. The following table shows both the present CMPs 
and the inflation adjusted CMPs. The table published in Sec.  19.240(a) 
is shorter and shows only the adjusted CMPs, not the calculations.
    Section 19.240(b) is amended, consistent with the statute, to state 
that the adjustments made in Sec.  19.240(a) apply only to violations 
that occur after the effective date of this final rule.
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New CMP

    The OCC is adding to its list of penalties a new CMP, as authorized 
by 12 U.S.C. 1820(k).\5\ Section 1820(k) applies to senior examiners, 
or functionally equivalent positions, at a Federal banking agency or 
Federal Reserve Bank. It prohibits a senior examiner from knowingly 
accepting compensation as an employee, officer, director, or 
consultant, from certain depository institutions or depository 
institution holding companies he or she examined, or from certain 
related entities, for one year after the examiner leaves the employment 
or service of the Federal banking agency or Federal Reserve Bank. The 
statute and its implementing regulation\6\ permit the OCC to assess a 
penalty of not more than $250,000 for a violation of the one-year 
restriction. Section 1820(k) became effective on December 17, 2005.\7\ 
To adjust this CMP, we compared the CPI-U for June 2007 (208.352) with 
the CPI-U for June 2005 (194.5). This resulted in an inflation increase 
of 7.1 percent.
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    \5\ Pub. L. 108-458, Title VI, section 6303(b), 118 Stat. 3638, 
3751 (Dec. 17, 2004).
    \6\ See 12 U.S.C. 1820(k)(6)(A)(ii); 12 CFR part 4, subpart E.
    \7\ See 12 U.S.C. 1820 note and 12 CFR 4.75.
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Clarifying Change

    The OCC is revising the chart format at 12 CFR 19.240(a) to be more 
readable. The revised chart separately identifies each statute and the 
different tiers of penalties provided in each statute (as applicable) 
rather than combining multiple statutes that assess identical CMPs.

Procedural Issues

1. Notice and Comment Procedure
    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. 5 
U.S.C. 553(b)(B). The Act provides the OCC no discretion in calculating 
the amount of the civil penalty adjustment. The OCC, accordingly, 
cannot vary the methodology used to calculate the adjustment or the 
amount of the adjustment to reflect any views or suggestions provided 
by commenters. For this reason, the OCC has concluded that notice and 
comment procedures are unnecessary and that good cause exists for 
dispensing with them.
2. Delayed Effective Date
    The Riegle Community Development and Regulatory Improvement Act of 
1994 requires that the effective date of new regulations and amendments 
to regulations that impose additional reporting, disclosures, or other 
new requirements on insured depository institutions shall be the first 
day of a calendar quarter that begins on or after the date the 
regulations are published in final form. See 12 U.S.C. 4802(b)(1). The 
RCDRIA does not apply to this final rule because the rule merely 
increases the amount of CMPs that already exist and does not impose any 
additional reporting, disclosures, or other new requirements.

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). See 5 U.S.C. 601(2). 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.

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 $133 million or more in any one year.\8\ Accordingly, a 
budgetary impact statement is not required under section 202 of the 
Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1532(a).
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    \8\ The Unfunded Mandates Reform Act of 1995 sets a threshold of 
$100 million and requires that threshold to be adjusted annually for 
inflation. See 2 U.S.C. 1532(a). The OCC has calculated that the 
inflation-adjusted amount for 2009 is $133 million.
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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

0
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

0
1. The authority citation for part 19 continues to read as follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 93a, 164, 
505, 1817, 1818, 1820, 1831m, 1831o, 1972, 3102, 3108(a), 3909, and 
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 and 5321; 
and 42 U.S.C. 4012a.


0
2. Section 19.240 is revised to read as follows:


Sec.  19.240  Inflation adjustments.

    (a) 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:
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    (b) The adjustments in paragraph (a) of this section apply to 
violations that occur after December 10, 2008.

    Dated: October 31, 2008.
John C. Dugan,
Comptroller of the Currency.
[FR Doc. E8-26654 Filed 11-7-08; 8:45 am]
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