[Federal Register Volume 81, Number 125 (Wednesday, June 29, 2016)]
[Rules and Regulations]
[Pages 42235-42243]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-15027]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 308 and 327

RIN 3064-AE43


Rules of Practice and Procedure

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Interim final rule and request for comment.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is amending 
its rules of practice and procedure under to adjust the maximum amount 
of each civil money penalty (CMP) within its jurisdiction to account 
for inflation. This action is required by the Federal Civil Penalties 
Inflation

[[Page 42236]]

Adjustment Act Improvements Act of 2015 (2015 Adjustment Act).

DATES: This rule is effective on August 1, 2016. Comments must be 
received by September 1, 2016.

ADDRESSES: You may submit comments, identified by RIN 3064-AE43, by any 
of the following methods:
     Agency Web site: http://www.fdic.gov/regulations/laws/federal/. Follow instructions for submitting comments on the Agency Web 
site.
     Email: [email protected]. Include the RIN 3064-AE43 on the 
subject line of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments, Federal Deposit Insurance Corporation, 550 17th Street NW., 
Washington, DC 20429.
     Hand Delivery: Comments may be hand-delivered to the guard 
station at the rear of the 550 17th Street Building (located on F 
Street) on business days between 7:00 a.m. and 5:00 p.m.
    Public Inspection: All comments received must include the agency 
name and RIN for this rulemaking. All comments received will be posted 
without change to http://www.fdic.gov/regulations/laws/federal/, 
including any personal information provided. Paper copies of public 
comments may be ordered from the FDIC Public Information Center, 3501 
North Fairfax Drive, Room E-1002, Arlington, VA 22226 by telephone at 
(877) 275-3342 or (703) 562-2200.

FOR FURTHER INFORMATION CONTACT: Seth P. Rosebrock, Supervisory 
Counsel, Legal Division (202) 898-6609, or Graham N. Rehrig, Senior 
Attorney, Legal Division (202) 898-3829.

SUPPLEMENTARY INFORMATION:

I. Policy Objectives

    This interim final rule adjusts the maximum limit for CMPs 
according to inflation as mandated by Congress in the 2015 Adjustment 
Act.\1\ The intended effect of annually adjusting maximum civil money 
penalties in accordance with changes in the Consumer Price Index is to 
minimize any distortion in the real value of those maximums due to 
inflation, thereby promoting a more consistent deterrent effect in the 
structure of CMPs. Other technical changes to 12 CFR part 308 are 
intended to improve the transparency of the regulation and to assist 
readers in quickly identifying the applicable CMP amounts.
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    \1\ Public Law 114-74, sec. 701, 129 Stat. 584.
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II. Background: Current Regulatory Approach

    The FDIC assesses CMPs under section 8(i) of the Federal Deposit 
Insurance Act (FDIA), 12 U.S.C. 1818, and a variety of other 
statutes.\2\ Congress established maximum penalties that could be 
assessed under these statutes. In many cases, these statutes contain 
multiple penalty tiers, permitting the assessment of penalties at 
various levels depending upon the severity of the misconduct at 
issue.\3\
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    \2\ See, e.g., 12 U.S.C. 1972(2)(F) (authorizing the FDIC to 
impose CMPs for violations of the Bank Holding Company Act of 1970 
related to prohibited tying arrangements); 15 U.S.C. 78u-2 
(authorizing the FDIC to impose CMPs for violations of certain 
provisions of the Securities Exchange Act of 1934); 42 U.S.C. 
4012a(f) (authorizing the FDIC to impose CMPs for pattern or 
practice violations of the Flood Disaster Protection Act).
    \3\ For example, Section 8(i)(2) of the FDIA, 12 U.S.C. 
1818(i)(2), provides for three tiers of CMPs, with the size of such 
CMPs increasing with the gravity of the misconduct.
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    In 1990, Congress determined that the assessment of CMPs plays ``an 
important role in deterring violations and furthering the policy goals 
embodied in such laws and regulations'' and concluded that ``the impact 
of many civil monetary penalties has been and is diminished due to the 
effect of inflation.'' \4\ Consequently, Congress required federal 
agencies with authority to impose CMPs to periodically adjust by 
rulemaking the maximum CMPs which these agencies were authorized to 
impose in order to ``maintain the deterrent effect of civil monetary 
penalties and promote compliance with the law.'' \5\ Under the 1990 
Adjustment Act, the FDIC adjusted its CMP amounts every four years, 
most recently in 2012.\6\
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    \4\ Section 2 of the Federal Civil Penalties Inflation 
Adjustment Act of 1990 (1990 Adjustment Act). Public Law 101-410, 
104 Stat. 890 (amended 2015) (codified as amended at 28 U.S.C. 2461 
note).
    \5\ Id.
    \6\ See 77 FR 74,573 (Dec. 17, 2012).
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    In 2015, Congress revised the process by which federal agencies 
adjust applicable CMPs for inflation.\7\ Under the 2015 Adjustment Act, 
the FDIC is required to (1) adjust the CMP levels with an initial 
catch-up adjustment through an interim final rulemaking and (2) make 
subsequent annual adjustments for inflation. The FDIC must publish an 
interim final rule with initial penalty adjustment amounts by July 1, 
2016, and the new maximum penalty levels must take effect no later than 
August 1, 2016. These adjustments will apply to all CMPs covered by the 
2015 Adjustment Act.\8\
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    \7\ Public Law 114-74, 129 Stat. 584.
    \8\ The 2015 Adjustment Act defines ``civil monetary penalty'' 
as ``any penalty, fine, or other sanction that is for a specific 
monetary amount as provided by Federal law; or has a maximum amount 
provided for by Federal law; and is assessed or enforced by an 
agency pursuant to Federal law; and is assessed or enforced pursuant 
to an administrative proceeding or a civil action in the Federal 
courts[.]'' Public Law 101-410, sec. 3(2), 104 Stat. 890 (amended 
2015) (codified as amended at 28 U.S.C. 2461 note).
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    Although the 2015 Adjustment Act increases the maximum penalty that 
may be assessed under each applicable statute, the FDIC possesses 
discretion to impose CMP amounts below the maximum level in accordance 
with the severity of the misconduct at issue. When making a 
determination as to the appropriate level of any given penalty, the 
FDIC is guided by statutory factors set forth in section 8(i)(2)(G) of 
the FDIA, 12 U.S.C. 1818(i)(2)(G), and those factors identified in the 
Interagency Policy Statement Regarding the Assessment of CMPs by the 
Federal Financial Institutions Regulatory Agencies.\9\ Such factors 
include, but are not limited to, the gravity and duration of the 
misconduct, and the intent related to the misconduct.
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    \9\ 63 FR 30227 (June 3, 1998).
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III. Description of the Rule

    This interim final rule adjusts the maximum limit for CMPs 
according to inflation as mandated by Congress in the 2015 Adjustment 
Act. Additionally, other technical changes to 12 CFR part 308 are being 
made to correct typographical errors, to supplement 12 CFR 308.132 to 
include references to previously omitted CMPs, and to reorder the 
provisions of 12 CFR 308.132 to assist readers in quickly identifying 
applicable CMP amounts.

The New CMP-Adjustment System

    The 2015 Adjustment Act directs federal agencies to follow guidance 
issued by the Office of Management and Budget (OMB) on February 24, 
2016 (OMB Guidance) when calculating new maximum penalty levels.\10\ 
Initial catch-up adjustments are to be based on the percent change 
between the Consumer Price Index for all Urban Consumers (CPI-U) \11\ 
for the month of October in the year for which the CMP was established 
by Congress or last adjusted for inflation (other than through the 1990 
Adjustment Act), and the October 2015 CPI-U.\12\ In addition, the OMB

[[Page 42237]]

Guidance provides a table of CMP-adjustment multipliers for each 
year.\13\
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    \10\ See OMB, Implementation of the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015, M-16-06 available 
at https://www.whitehouse.gov/sites/default/files/omb/memoranda/2016/m-16-06.pdf.
    \11\ The CPI-U is compiled by the Bureau of Statistics of the 
Department of Labor.
    \12\ The OMB Guidance directs agencies to identify, for each 
CMP, the year and corresponding amount(s) for which the maximum 
penalty level or range of minimum and maximum penalties was 
established (i.e., as originally enacted by Congress), or last 
adjusted (i.e., by Congress in statute, or by the agency through 
regulation), whichever is later, other than under the Inflation 
Adjustment Act. OMB Guidance at 3.
    \13\ OMB Guidance at 6.
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Summary of the FDIC's Calculations

    In keeping with the OMB Guidance, the FDIC multiplied each of its 
CMP amounts by the relevant inflation factor.\14\ After applying the 
multiplier, the FDIC rounded each penalty level to the nearest dollar. 
In accordance with the 2015 Adjustment Act, the FDIC did not increase 
penalty levels by more than 150 percent of the corresponding levels in 
effect on November 2, 2015. In making these calculations, the FDIC 
consulted with staff from the Office of the Comptroller of the 
Currency, the Board of Governors for the Federal Reserve System, the 
National Credit Union Administration, and the Bureau of Consumer 
Financial Protection to ensure that the FDIC's calculations and 
adjustments are consistent with those being proposed by other federal 
financial regulators for the same statutes.
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    \14\ Under the 1990 Adjustment Act, adjustments have been made 
only to CMPs that are for specific dollar amounts or maximums. CMPs 
that are assessed based upon a fixed percentage of an institution's 
total assets are not subject to adjustment.
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Summary of Adjustments

    The following chart displays the adjusted CMP amounts for each CMP 
identified in 12 CFR part 308.\15\ The following chart reflects the 
maximum CMPs that may be assessed through July 31, 2016, and the 
maximum CMPs that may be assessed on or after August 1, 2016, after the 
required inflation adjustment:
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    \15\ As noted previously, the FDIC retains discretion to impose 
CMPs in amounts below the referenced maximums.

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                                                           Current maximum CMP          Adjusted maximum CMP
                 U.S. Code citation                      (through July 31, 2016)     (beginning August 1, 2016)
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12 U.S.C. 1464(v):
    Tier One CMP....................................                        $3,200                        $3,787
    Tier Two CMP....................................                        32,000                        37,872
    Tier Three CMP..................................                     1,425,000                     1,893,610
12 U.S.C. 1467(d)...................................                         7,500                         9,468
12 U.S.C. 1817(a):
    Tier One CMP....................................                         3,200                         3,787
    Tier Two CMP....................................                        32,000                        37,872
    Tier Three CMP..................................                     1,425,000                     1,893,610
12 U.S.C. 1817(c):
    Tier One CMP....................................                         3,200                         3,462
    Tier Two CMP....................................                        32,000                        34,620
    Tier Three CMP..................................                     1,425,000                     1,730,990
12 U.S.C. 1818(i)(2):
    Tier One CMP....................................                         7,500                         9,468
    Tier Two CMP....................................                        37,500                        47,340
    Tier Three CMP..................................                     1,425,000                     1,893,610
12 U.S.C. 1820(e)(4)................................                         7,500                         8,655
12 U.S.C. 1820(k)(6)................................                       275,000                       311,470
12 U.S.C. 1828(a)(3)................................                           100                           118
12 U.S.C. 1828(h):
    For assessments <$10,000........................                           100                           118
12 U.S.C. 1829b(j)..................................                        16,000                        19,787
12 U.S.C. 1832(c)...................................                         1,100                         2,750
12 U.S.C. 1884......................................                           110                           275
12 U.S.C. 1972(2)(F):
    Tier One CMP....................................                         7,500                         9,468
    Tier Two CMP....................................                        37,500                        47,340
    Tier Three CMP..................................                     1,425,000                     1,893,610
12 U.S.C. 3909(d)...................................                         1,100                         2,355
15 U.S.C. 78u-2:
    Tier One CMP (individuals)......................                         7,500                         8,908
    Tier One CMP (others)...........................                        70,000                        89,078
    Tier Two CMP (individuals)......................                        70,000                        89,078
    Tier Two CMP (others)...........................                       350,000                       445,390
    Tier Three CMP (individuals)....................                       140,000                       178,156
    Tier Three penalty (others).....................                       700,000                       890,780
15 U.S.C. 1639e(k):
    First violation.................................                        10,000                        10,875
    Subsequent violations...........................                        20,000                        21,749
31 U.S.C. 3802......................................                         7,500                        10,781
42 U.S.C. 4012a(f)..................................                         2,000                         2,056
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                                                         Current maximum amount          New maximum amount
                    CFR Citation                         (through July 31, 2016)     (beginning August 1, 2016)
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12 CFR 308.132(c)--Late or Misleading Reports of Condition and Income (Call Reports)
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    First Offense:
    $25 million or more assets:
        1 to 15 days late...........................                          $330                          $519
        16 or more days late........................                           660                         1,039
    Less than $25 million assets:

[[Page 42238]]

 
        1 to 15 days late...........................                           110                           173
        16 or more days late........................                           220                           346
    Subsequent Offenses
    $25 million or more assets:
        1 to 15 days late...........................                           550                           865
        16 or more days late........................                         1,100                         1,731
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Addition to Part 308 of CMPs Previously Omitted

    This interim final rule incorporates adjustments to two categories 
of CMPs previously inadvertently omitted from the FDIC's last 
inflation-adjustment rulemaking in 2012. The Dodd-Frank Act \16\ 
amended the Truth in Lending Act to establish independence standards 
for property appraisals and authorized the FDIC and other federal 
agencies to assess specified CMPs against persons who violate these 
provisions (Appraisal Independence CMP).\17\ Title III of the Dodd-
Frank Act also transferred the functions, powers, and duties of the 
Office of Thrift Supervision relating to State savings associations to 
the FDIC and amended section 3 of the Federal Deposit Insurance Act to 
designate the FDIC as the ``appropriate Federal banking agency'' for 
State savings associations. Among the transferred authorities was the 
authority to impose CMPs against any State savings association under 
section 9(d) of the Home Owners' Loan Act (HOLA) (12 U.S.C. 1467(d)) if 
an affiliate of such an institution refuses to permit a duly-appointed 
examiner to conduct an examination or refuses to provide information 
during the course of an examination (Savings Association CMP).
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    \16\ Public Law 111-203, tit. XIV, sec. 1472(a), 124 Stat. 2187.
    \17\ 15 U.S.C. 1639e(k).
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    Neither the Appraisal Independence CMP nor the Savings Association 
CMP was previously included in part 308. Nonetheless, the FDIC is 
required by the 2015 Adjustment Act to adjust all CMPs under the FDIC's 
jurisdiction in the agency's inflation-adjustment rulemaking. 
Consequently, the present amendment to part 308 specifically 
incorporates provisions in 12 CFR 308.132 related to the Appraisal 
Independence CMP and Savings Association CMP in 12 CFR 308.132, 
applying the adjustments required under the 2015 Adjustment Act and the 
OMB Guidance to these penalties.

Other Technical Changes to 12 CFR Part 308

    The FDIC corrected a typographical error in 12 CFR 308.132(c) by 
indicating that the FDIC's Board of Directors or its designee may 
assess CMPs under 12 CFR 308.1(e) rather than the incorrect 
``308.01(e)(1).''
    The FDIC reorganized 12 CFR 308.132, listing all statutes cited 
that give rise to CMPs in ascending alpha-numeric order by title and 
section to assist readers in quickly identifying the applicable CMP 
amounts.
    Finally, the FDIC revised existing cross-references to 12 CFR 
308.132 that are found in Chapter III of Title 12 of the Code of 
Federal Regulations to reflect the resultant reorganization of 12 CFR 
308.132.

IV. Expected Effects of the Rule

    The interim final rule is expected to more precisely adjust CMP 
maximums relative to inflation. These adjustments are expected to 
minimize any year-to-year distortions in the real value of the CMP 
maximums. These adjustments will promote a more consistent deterrent 
effect in the structure of CMPs. As previously noted, the FDIC retains 
discretion to impose CMP amounts below the maximum level. The actual 
number and size of CMPs assessed in the future will depend on the 
propensity and severity of the violations committed by banks and 
institution-affiliated parties, as well as the particular statute that 
is at issue. Such future violations cannot be reliably forecast. It is 
expected that the FDIC will continue to exercise its discretion to 
impose CMPs that are appropriate to their severity.
    The 2015 Adjustment Act will likely result in a minimal increase in 
administrative costs for the FDIC in order to establish new inflation-
adjusted maximum CMPs each year. Because these calculations are 
relatively simple, the number of labor hours necessary to perform this 
task is likely to be insignificant relative to total enforcement labor 
hours for the Corporation.

V. Alternatives Considered

    The 2015 Act mandates the frequency of the inflation adjustment and 
the measure of inflation to be used in making these adjustments; 
accordingly, the FDIC is not statutorily authorized to consider or 
pursue alternative approaches. The other technical changes to 12 CFR 
part 308 were relatively minor and designed to improve the transparency 
and readability of the CFR, and therefore the FDIC did not actively 
consider alternative approaches to these changes.

VI. Request for Comment

    The 2015 Adjustment Act requires the FDIC to amend its rules 
through an interim final rulemaking and provides the specific 
adjustments to be made. These changes are ministerial and technical. 
Under the OMB Guidance, the FDIC is not required to complete a notice-
and-comment process prior to publication of this interim final rule in 
the Federal Register.\18\ Nonetheless, although notice and comment 
rulemaking procedures are not required, the FDIC invites comments on 
all aspects of this interim final rule. Commenters are specifically 
encouraged to identify any technical issues raised by the rule, 
including identifying any potential CMPs that may have been 
unintentionally omitted from this adjustment rulemaking.
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    \18\ OMB Guidance at 3.
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VII. Regulatory Analysis

Riegle Community Development and Regulatory Improvement Act

    Section 302 of the Riegle Community Development and Regulatory 
Improvement Act \19\ generally requires that regulations prescribed by 
federal banking agencies which impose additional reporting, 
disclosures, or other new requirements on insured depository 
institutions take effect on the first day of a calendar quarter unless 
the regulation is required to take effect on another date pursuant to 
another act of Congress or the agency determines for good cause that 
the regulation should become effective on an earlier date.
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    \19\ 12 U.S.C. 4802.
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    This interim final rule merely adjusts the maximum CMPs which the 
FDIC may assess. It does not impose any new or additional reporting, 
disclosures, or other requirements on insured depository institutions. 
Additionally, as previously noted, the 2015 Adjustment

[[Page 42239]]

Act requires the interim final rule to take effect no later than August 
1, 2016.\20\ Accordingly, this interim final rule will be effective 
August 1, 2016.
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    \20\ Public Law 114-74, 129 Stat. 584.
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Regulatory Flexibility Act

    An initial regulatory flexibility analysis under the Regulatory 
Flexibility Act \21\ (RFA) is required only when an agency must publish 
a general notice of proposed rulemaking. As noted above, the FDIC 
determined that publication of a notice of proposed rulemaking is not 
necessary for this interim final rule. Accordingly, the RFA does not 
require an initial regulatory flexibility analysis. Nevertheless, the 
FDIC considered the likely impact of the rule on small entities. From 
2011 through 2015, on average, only 1.6 percent of FDIC-supervised 
institutions were ordered to pay a CMP each year. Accordingly, the FDIC 
believes that the rule will not have a significant impact on a 
substantial number of small entities.
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    \21\ 5 U.S.C. 603.
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Small Business Regulatory Enforcement Fairness Act

    The OMB has determined that the interim final rule is not a ``major 
rule'' within the meaning of the relevant sections of the Small 
Business Regulatory Enforcement Act of 1996 (SBREFA).\22\ As required 
by SBREFA, the FDIC will submit the interim final rule and other 
appropriate reports to Congress and the Government Accountability 
Office for review.
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    \22\ 5 U.S.C. 801 et seq.
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The Omnibus Consolidated and Emergency Supplemental Appropriations Act, 
1999: Assessment of Federal Regulations and Policies on Families

    The FDIC determined that this final rule will not affect family 
wellbeing within the meaning of section 654 of the Omnibus Consolidated 
and Emergency Supplemental Appropriations Act, 1999.\23\
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    \23\ Public Law 105-277, 112 Stat. 2681 (1998).
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Paperwork Reduction Act

    The interim rule will implement statutory changes to the FDIC's CMP 
regulations. It does not create any new, or revise any existing, 
collections of information under section 3504(h) of the Paperwork 
Reduction Act of 1980.\24\ Consequently, no information collection 
request will be submitted to the OMB for review.
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    \24\ 44 U.S.C. 3501 et seq.
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Plain Language Act

    Section 722 of the Gramm-Leach-Bliley Act requires the FDIC to use 
plain language in all proposed and final rules published after January 
1, 2000.\25\ The FDIC invites comment on how to make this rule easier 
to understand. For example:
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    \25\ Public Law 106-102, 113 Stat. 1338 (Nov. 12, 1999).

     Has the FDIC organized the material to suit your needs? 
If not, how could the FDIC present the rule more clearly?
     Are the requirements in the rule clearly stated? If 
not, how could the rule be more clearly stated?
     Do the regulations contain technical language or jargon 
that is not clear? If so, which language requires clarification?
     Would a different format (grouping and order of 
sections, use of headings, paragraphing) make the regulation easier 
to understand? If so, what changes would achieve that?
     Is this section format adequate? If not, which of the 
sections should be changed and how?
     What other changes can the FDIC incorporate to make the 
regulation easier to understand?

List of Subjects

12 CFR Part 308

    Administrative practice and procedure, Banks, banking, Claims, 
Crime, Equal access to justice, Ex parte communications, Hearing 
procedure, Lawyers, Penalties, State nonmember banks.

12 CFR Part 327

    Bank deposit insurance, Banks, banking, Savings associations.

    For the reasons set forth in the preamble, the FDIC amends 12 CFR 
parts 308 and 327 to read as follows:

PART 308--RULES OF PRACTICE AND PROCEDURE

0
1. Revise the authority citation for 12 CFR part 308 to read as 
follows:

    Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505, 
1464, 1467(d), 1467a, 1468, 1815(e), 1817, 1818, 1819, 1820, 1828, 
1829, 1829(b), 1831i, 1831m(g)(4), 1831o, 1831p-1, 1832(c), 1884(b), 
1972, 3102, 3108(a), 3349, 3909, 4717, 5412(b)(2)(C), 5414(b)(3); 15 
U.S.C. 78(h) and (i), 78o(c)(4), 78o-4(c), 78o-5, 78q-1, 78s, 78u, 
78u-2, 78u-3, 78w, 6801(b), 6805(b)(1); 28 U.S.C. 2461 note; 31 
U.S.C. 330, 5321; 42 U.S.C. 4012a; Pub. L. 104-134, sec. 31001(s), 
110 Stat. 1321; Pub. L. 109-351, 120 Stat. 1966; Pub. L. 111-203, 
124 Stat. 1376; Pub. L. 114-74, sec. 701, 129 Stat. 584.


0
2. Revise Sec.  308.116(b)(4) to read as follows:


Sec.  308.116  Assessment of penalties.

* * * * *
    (b) * * *
    (4) Adjustment of civil money penalties by the rate of inflation 
pursuant to the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015. On or after August 1, 2016:
    (i) Any person who has engaged in a violation as set forth in 
paragraph (b)(1) of this section shall forfeit and pay a civil money 
penalty of not more than $9,468 for each day the violation continued.
    (ii) Any person who has engaged in a violation, unsafe or unsound 
practice or breach of fiduciary duty, as set forth in paragraph (b)(2) 
of this section, shall forfeit and pay a civil money penalty of not 
more than $47,340 for each day such violation, practice or breach 
continued.
    (iii) Any person who has knowingly engaged in a violation, unsafe 
or unsound practice or breach of fiduciary duty, as set forth in 
paragraph (b)(3) of this section, shall forfeit and pay a civil money 
penalty not to exceed:
    (A) In the case of a person other than a depository institution--
$1,893,610 per day for each day the violation, practice or breach 
continued; or
    (B) In the case of a depository institution--an amount not to 
exceed the lesser of $1,893,610 or one percent of the total assets of 
such institution for each day the violation, practice or breach 
continued.
* * * * *

0
3. Amend Sec.  308.132 by revising paragraph (c)(1) and adding 
paragraph (d) to read as follows:


Sec.  308.132  Assessment of penalties.

* * * * *
    (c)
    (1) Authority of the Board of Directors. The Board of Directors or 
its designee may assess civil money penalties pursuant to section 8(i) 
of the FDIA (12 U.S.C. 1818(i)), and Sec.  308.1(e) of the Uniform 
Rules (this part).
* * * * *
    (d) Maximum civil money penalty amounts. Pursuant to the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015, on 
or after August 1, 2016, the Board of Directors or its designee may 
assess civil money penalties in the maximum amounts as follows:
    (1) Civil money penalties assessed pursuant to 12 U.S.C. 1464(v) 
for late filing or the submission of false or misleading certified 
statements by State savings associations. Pursuant to section 5(v) of 
the Home Owners' Loan Act (12 U.S.C. 1464(v)), the Board of Directors 
or its designee may assess civil money penalties as follows:

[[Page 42240]]

    (i) Late filing--Tier One penalties. In cases in which an 
institution fails to make or publish its Report of Condition and Income 
(Call Report) within the appropriate time periods, a civil money 
penalty of not more than $3,787 per day may be assessed where the 
institution maintains procedures in place reasonably adapted to avoid 
inadvertent error and the late filing occurred unintentionally and as a 
result of such error; or the institution inadvertently transmitted a 
Call Report that is minimally late. For penalties assessed on or after 
August 1, 2016, for violations of this paragraph (d)(1)(i), the 
following maximum Tier One penalty amounts contained in paragraphs 
(d)(1)(i)(A) and (B) of this section shall apply for each day that the 
violation continues.
    (A) First offense. Generally, in such cases, the amount assessed 
shall be $519 per day for each of the first 15 days for which the 
failure continues, and $1,039 per day for each subsequent day the 
failure continues, beginning on the sixteenth day. For institutions 
with less than $25,000,000 in assets, the amount assessed shall be the 
greater of $173 per day or 1/1000th of the institution's total assets 
(1/10th of a basis point) for each of the first 15 days for which the 
failure continues, and $346 or 1/500th of the institution's total 
assets, 1/5 of a basis point) for each subsequent day the failure 
continues, beginning on the sixteenth day.
    (B) Subsequent offense. Where the institution has been delinquent 
in making or publishing its Call Report within the preceding five 
quarters, the amount assessed for the most current failure shall 
generally be $865 per day for each of the first 15 days for which the 
failure continues, and $1,731 per day for each subsequent day the 
failure continues, beginning on the sixteenth day. For institutions 
with less than $25,000,000 in assets, those amounts, respectively, 
shall be 1/500th of the bank's total assets and 1/250th of the 
institution's total assets.
    (C) Lengthy or repeated violations. The amounts set forth in this 
paragraph (d)(1)(i) will be assessed on a case by case basis where the 
amount of time of the institution's delinquency is lengthy or the 
institution has been delinquent repeatedly in making or publishing its 
Call Reports.
    (D) Waiver. Absent extraordinary circumstances outside the control 
of the institution, penalties assessed for late filing shall not be 
waived.
    (ii) Late-filing--Tier Two penalties. Where an institution fails to 
make or publish its Call Report within the appropriate time period, the 
Board of Directors or its designee may assess a civil money penalty of 
not more than $37,872 per day for each day the failure continues.
    (iii) False or misleading reports or information--(A) Tier One 
penalties. In cases in which an institution submits or publishes any 
false or misleading Call Report or information, the Board of Directors 
or its designee may assess a civil money penalty of not more than 
$3,787 per day for each day the information is not corrected, where the 
institution maintains procedures in place reasonably adapted to avoid 
inadvertent error and the violation occurred unintentionally and as a 
result of such error; or the institution inadvertently transmits a Call 
Report or information that is false or misleading.
    (B) Tier Two penalties. Where an institution submits or publishes 
any false or misleading Call Report or other information, the Board of 
Directors or its designee may assess a civil money penalty of not more 
than $37,872 per day for each day the information is not corrected.
    (C) Tier Three penalties. Where an institution knowingly or with 
reckless disregard for the accuracy of any Call Report or information 
submits or publishes any false or misleading Call Report or other 
information, the Board of Directors or its designee may assess a civil 
money penalty of not more than the lesser of $1,893,610 or 1 percent of 
the institution's total assets per day for each day the information is 
not corrected.
    (iv) Mitigating factors. The amounts set forth in this paragraph 
(d)(1) may be reduced based upon the factors set forth in paragraph (b) 
of this section.
    (2) Civil money penalties assessed pursuant to 12 U.S.C. 1467(d) 
for refusal by an affiliate of a State savings association to allow 
examination or to provide required information during an examination. 
Pursuant to section 9(d) of the Home Owners' Loan Act (12 U.S.C. 
1467(d)), civil money penalties may be assessed against any State 
savings association if an affiliate of such an institution refuses to 
permit a duly-appointed examiner to conduct an examination or refuses 
to provide information during the course of an examination as set forth 
12 U.S.C. 1467(d), in an amount not to exceed $9,486 for each day the 
refusal continues.
    (3) Civil money penalties assessed pursuant to 12 U.S.C. 1817(a) 
for late filings or the submission of false or misleading reports of 
condition. Pursuant to section 7(a) of the FDIA (12 U.S.C. 1817(a)), 
the Board of Directors or its designee may assess civil money penalties 
as follows:
    (i) Late filing--Tier One penalties. In cases in which an 
institution fails to make or publish its Report of Condition and Income 
(Call Report) within the appropriate time periods, a civil money 
penalty of not more than $3,787 per day may be assessed where the 
institution maintains procedures in place reasonably adapted to avoid 
inadvertent error and the late filing occurred unintentionally and as a 
result of such error; or the institution inadvertently transmitted a 
Call Report that is minimally late. For penalties assessed on or after 
August 1, 2016, for violations of this paragraph (d)(3)(i), the 
following maximum Tier One penalty amounts contained in paragraphs 
(d)(3)(i)(A) and (B) of this section shall apply for each day that the 
violation continues.
    (A) First offense. Generally, in such cases, the amount assessed 
shall be $519 per day for each of the first 15 days for which the 
failure continues, and $1,039 per day for each subsequent day the 
failure continues, beginning on the sixteenth day. For institutions 
with less than $25,000,000 in assets, the amount assessed shall be the 
greater of $173 per day or 1/1000th of the institution's total assets 
(1/10th of a basis point) for each of the first 15 days for which the 
failure continues, and $346 or 1/500th of the institution's total 
assets, 1/5 of a basis point) for each subsequent day the failure 
continues, beginning on the sixteenth day.
    (B) Subsequent offense. Where the institution has been delinquent 
in making or publishing its Call Report within the preceding five 
quarters, the amount assessed for the most current failure shall 
generally be $865 per day for each of the first 15 days for which the 
failure continues, and $1,731 per day for each subsequent day the 
failure continues, beginning on the sixteenth day. For institutions 
with less than $25,000,000 in assets, those amounts, respectively, 
shall be 1/500th of the bank's total assets and 1/250th of the 
institution's total assets.
    (C) Lengthy or repeated violations. The amounts set forth in this 
paragraph (d)(3)(i) will be assessed on a case by case basis where the 
amount of time of the institution's delinquency is lengthy or the 
institution has been delinquent repeatedly in making or publishing its 
Call Reports.
    (D) Waiver. Absent extraordinary circumstances outside the control 
of the institution, penalties assessed for late filing shall not be 
waived.
    (ii) Late-filing--Tier Two penalties. Where an institution fails to 
make or publish its Call Report within the appropriate time period, the 
Board of Directors or its designee may assess a

[[Page 42241]]

civil money penalty of not more than $34,620 per day for each day the 
failure continues.
    (iii) False or misleading reports or information--(A) Tier One 
penalties. In cases in which an institution submits or publishes any 
false or misleading Call Report or information, the Board of Directors 
or its designee may assess a civil money penalty of not more than 
$3,787 per day for each day the information is not corrected, where the 
institution maintains procedures in place reasonably adapted to avoid 
inadvertent error and the violation occurred unintentionally and as a 
result of such error; or the institution inadvertently transmits a Call 
Report or information that is false or misleading.
    (B) Tier Two penalties. Where an institution submits or publishes 
any false or misleading Call Report or other information, the Board of 
Directors or its designee may assess a civil money penalty of not more 
than $37,872 per day for each day the information is not corrected.
    (C) Tier Three penalties. Where an institution knowingly or with 
reckless disregard for the accuracy of any Call Report or information 
submits or publishes any false or misleading Call Report or other 
information, the Board of Directors or its designee may assess a civil 
money penalty of not more than the lesser of $1,893,610 or 1 percent of 
the institution's total assets per day for each day the information is 
not corrected.
    (iv) Mitigating factors. The amounts set forth in this paragraph 
(d)(3) may be reduced based upon the factors set forth in paragraph (b) 
of this section.
    (4) Civil money penalties assessed pursuant to 12 U.S.C. 1817(c) 
for late filing or the submission of false or misleading certified 
statements. Tier One civil money penalties may be assessed pursuant to 
section 7(c)(4)(A) of the FDIA (12 U.S.C. 1817(c)(4)(A)) in an amount 
not to exceed $3,462 for each day during which the failure to file 
continues or the false or misleading information is not corrected. Tier 
Two civil money penalties may be assessed pursuant to section 
7(c)(4)(B) of the FDIA (12 U.S.C. 1817(c)(4)(B)) in an amount not to 
exceed $34,620 for each day during which the failure to file continues 
or the false or misleading information is not corrected. Tier Three 
civil money penalties may be assessed pursuant to section 7(c)(4)(C) in 
an amount not to exceed the lesser of $1,730,990 or 1 percent of the 
total assets of the institution for each day during which the failure 
to file continues or the false or misleading information is not 
corrected.
    (5) Civil money penalties assessed pursuant to section 8(i)(2) of 
the FDIA. Tier One civil money penalties may be assessed pursuant to 
section 8(i)(2)(A) of the FDIA (12 U.S.C. 1818(i)(2)(A)) in an amount 
not to exceed $9,468 for each day during which the violation continues. 
Tier Two civil money penalties may be assessed pursuant to section 
8(i)(2)(B) of the FDIA (12 U.S.C. 1818(i)(2)(B)) in an amount not to 
exceed $47,340 for each day during which the violation, practice or 
breach continues. Tier Three civil money penalties may be assessed 
pursuant to section 8(i)(2)(C) (12 U.S.C. 1818(i)(2)(C)) in an amount 
not to exceed, in the case of any person other than an insured 
depository institution $1,893,610 or, in the case of any insured 
depository institution, an amount not to exceed the lesser of 
$1,893,610 or 1 percent of the total assets of such institution for 
each day during which the violation, practice, or breach continues.
    (i) Pursuant to 7(j)(16) of the FDIA (12 U.S.C. 1817(j)(16)), a 
civil money penalty may be assessed for violations of change in control 
of insured depository institution provisions pursuant to section 
8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)) in the amounts set forth in 
paragraph (d)(5) of this section.
    (ii) Pursuant to the International Banking Act of 1978 (IBA) (12 
U.S.C. 3108(b)), civil money penalties may be assessed for failure to 
comply with the requirements of the IBA pursuant to section 8(i)(2) of 
the FDIA (12 U.S.C. 1818(i)(2)), in the amounts set forth in paragraph 
(d)(5).
    (iii) Pursuant to section 1120(b) of the Financial Institutions 
Recovery, Reform, and Enforcement Act of 1989 (FIRREA) (12 U.S.C. 
3349(b)), where a financial institution seeks, obtains, or gives any 
other thing of value in exchange for the performance of an appraisal by 
a person that the institution knows is not a state certified or 
licensed appraiser in connection with a federally related transaction, 
a civil money penalty may be assessed pursuant to section 8(i)(2) of 
the FDIA (12 U.S.C. 1818(i)(2)) in the amounts set forth in paragraph 
(d)(5) of this section.
    (iv) Pursuant to the Community Development Banking and Financial 
Institution Act (Community Development Banking Act) (12 U.S.C. 4717(b)) 
a civil money penalty may be assessed for violations of the Community 
Development Banking Act pursuant to section 8(i)(2) of the FDIA (12 
U.S.C. 1818(i)(2)), in the amount set forth in paragraph (d)(5) of this 
section.
    (v) Civil money penalties may be assessed pursuant to section 
8(i)(2) of the FDIA in the amounts set forth in this paragraph (d)(5) 
for violations of various consumer laws, including, but not limited to, 
the Home Mortgage Disclosure Act (12 U.S.C. 2804 et seq. and 12 CFR 
203.6), the Expedited Funds Availability Act (12 U.S.C. 4001 et seq.), 
the Truth in Savings Act (12 U.S.C. 4301 et seq.), the Real Estate 
Settlement Procedures Act (12 U.S.C. 2601 et seq.), the Truth in 
Lending Act (15 U.S.C. 1601 et seq.), the Fair Credit Reporting Act (15 
U.S.C. 1681 et seq.), the Equal Credit Opportunity Act (15 U.S.C. 1691 
et seq.), the Fair Debt Collection Practices Act (15 U.S.C. 1692 et 
seq.), the Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.) and 
the Fair Housing Act (42 U.S.C. 3601 et seq.).
    (6) Civil money penalties assessed pursuant to 12 U.S.C. 1820(e) 
for refusal to allow examination or to provide required information 
during an examination. Pursuant to section 10(e)(4) of the FDIA (12 
U.S.C. 1820(e)(4)), civil money penalties may be assessed against any 
affiliate of an insured depository institution that refuses to permit a 
duly-appointed examiner to conduct an examination or to provide 
information during the course of an examination as set forth in section 
20(b) of the FDIA (12 U.S.C. 1820(b)), in an amount not to exceed 
$8,655 for each day the refusal continues.
    (7) Civil money penalties assessed pursuant to 12 U.S.C. 1820(k) 
for violation of one-year restriction on Federal examiners of financial 
institutions. Pursuant to section 10(k) of the FDIA (12 U.S.C. 
1820(k)), the Board of Directors or its designee may assess a civil 
money penalty of up to $311,470 against any covered former Federal 
examiner of a financial institution who, in violation of section 10(k) 
of the FDIA (12 U.S.C. 1820(k)) and within the one-year period 
following termination of government service as an employee, serves as 
an officer, director, or consultant of a financial or depository 
institution, a holding company, or of any other entity listed in 
section 10(k) of the FDIA (12 U.S.C. 1820(k)), without the written 
waiver or permission by the appropriate Federal banking agency or 
authority under section 10(k)(5) of the FDIA (12 U.S.C. 1820(k)(5)).
    (8) Civil money penalties assessed pursuant to 12 U.S.C. 1828(a) 
for incorrect display of insurance logo. Pursuant to section 18(a)(3) 
of the FDIA (12 U.S.C. 1828(a)(3)), civil money penalties may be 
assessed against an insured depository institution that fails to 
correctly display its insurance logo pursuant to that section, in an 
amount

[[Page 42242]]

not to exceed $118 for each day the violation continues.
    (9) Civil money penalties assessed pursuant to 12 U.S.C. 1828(h) 
for failure to timely pay assessment.
    (i) In general. Subject to paragraph (d)(9)(iii) of this section, 
any insured depository institution that fails or refuses to pay any 
assessment shall be subject to a penalty in an amount of not more than 
1 percent of the amount of the assessment due for each day that such 
violation continues.
    (ii) Exception in case of dispute. Paragraph (d)(9)(i) of this 
section shall not apply if--
    (A) The failure to pay an assessment is due to a dispute between 
the insured depository institution and the Corporation over the amount 
of such assessment; and
    (B) The insured depository institution deposits security 
satisfactory to the Corporation for payment upon final determination of 
the issue.
    (iii) Special rule for small assessment amounts. If the amount of 
the assessment that an insured depository institution fails or refuses 
to pay is less than $10,000 at the time of such failure or refusal, the 
amount of any penalty to which such institution is subject under 
paragraph (d)(9)(i) of this section shall not exceed $118 for each day 
that such violation continues.
    (iv) Authority to modify or remit penalty. The Corporation, in the 
sole discretion of the Corporation, may compromise, modify, or remit 
any penalty that the Corporation may assess or has already assessed 
under paragraph (d)(9)(i) of this section upon a finding that good 
cause prevented the timely payment of an assessment.
    (10) Civil money penalties assessed pursuant to 12 U.S.C. 1829b(j) 
for recordkeeping violations. Pursuant to section 19b(j) of the FDIA 
(12 U.S.C. 1829b(j)), civil money penalties may be assessed against an 
insured depository institution and any director, officer or employee 
thereof who willfully or through gross negligence violates or causes a 
violation of the recordkeeping requirements of that section or its 
implementing regulations in an amount not to exceed $19,787 per 
violation.
    (11) Civil money penalties pursuant to 12 U.S.C. 1832(c) for 
violation of provisions regarding interest-bearing demand deposit 
accounts. Pursuant to 12 U.S.C. 1832(c), any depository institution 
that violates the prohibition regarding interest-bearing demand deposit 
accounts shall be subject to a fine of $2,750 per violation.
    (12) Civil penalties for violations of security measure 
requirements under 12 U.S.C. 1884. Pursuant to 12 U.S.C. 1884, an 
institution that violates a rule establishing minimum security 
requirements as set forth in 12 U.S.C. 1882, shall be subject to a 
civil penalty not to exceed $275 for each day of the violation.
    (13) Civil money penalties assessed pursuant to 12 U.S.C. 
1972(2)(F) for prohibited tying arrangements. Pursuant to the Bank 
Holding Company Act of 1970, Tier One civil money penalties may be 
assessed pursuant to 12 U.S.C. 1972(2)(F)(i) in an amount not to exceed 
$9,468 for each day during which the violation continues. Tier Two 
civil money penalties may be assessed pursuant to 12 U.S.C. 
1972(2)(F)(ii) in an amount not to exceed $47,340 for each day during 
which the violation, practice or breach continues. Tier Three civil 
money penalties may be assessed pursuant to 12 U.S.C. 1972(2)(F)(iii) 
in an amount not to exceed, in the case of any person other than an 
insured depository institution $1,893,610 for each day during which the 
violation, practice, or breach continues or, in the case of any insured 
depository institution, an amount not to exceed the lesser of 
$1,893,610 or 1 percent of the total assets of such institution for 
each day during which the violation, practice, or breach continues.
    (14) Civil money penalties assessed pursuant to 12 U.S.C. 3909(d). 
Pursuant to the International Lending Supervision Act (ILSA) (12 U.S.C. 
3909(d)), civil money penalties may be assessed against any institution 
or any officer, director, employee, agent or other person participating 
in the conduct of the affairs of such institution is an amount not to 
exceed $2,355 for each day a violation of the ILSA or any rule, 
regulation or order issued pursuant to ILSA continues.
    (15) Civil money penalties assessed for violations of 15 U.S.C. 
78u-2. Pursuant to section 21B of the Securities Exchange Act of 1934 
(Exchange Act) (15 U.S.C. 78u-2), civil money penalties may be assessed 
for violations of certain provisions of the Exchange Act, where such 
penalties are in the public interest. Tier One civil money penalties 
may be assessed pursuant to 15 U.S.C. 78u-2(b)(1) in an amount not to 
exceed $8,908 for a natural person or $89,078 for any other person for 
violations set forth in 15 U.S.C. 78u-2(a). Tier Two civil money 
penalties may be assessed pursuant to 15 U.S.C. 78u-2(b)(2) in an 
amount not to exceed--for each violation set forth in 15 U.S.C. 78u-
2(a)--$89,078 for a natural person or $445,390 for any other person if 
the act or omission involved fraud, deceit, manipulation, or deliberate 
or reckless disregard of a regulatory requirement. Tier Three civil 
money penalties may be assessed pursuant to 15 U.S.C. 78u-2(b)(3) for 
each violation set forth in 15 U.S.C. 78u-2(a), in an amount not to 
exceed $178,156 for a natural person or $890,780 for any other person, 
if the act or omission involved fraud, deceit, manipulation, or 
deliberate or reckless disregard of a regulatory requirement; and such 
act or omission directly or indirectly resulted in substantial losses, 
or created a significant risk of substantial losses to other persons or 
resulted in substantial pecuniary gain to the person who committed the 
act or omission.
    (16) Civil money penalties assessed pursuant to 15 U.S.C. 1639e(k) 
for appraisal independence violations. Pursuant to section 1472(a) of 
the Dodd-Frank Wall Street Reform and Consumer Protection Act 
(Appraisal Independence Rule) (15 U.S.C. 1639e(k)), civil money 
penalties may be assessed for an initial violation of the Appraisal 
Independence Rule in an amount not to exceed $10,875 for each day 
during which the violation continues and, for subsequent violations, 
$21,749 for each day during which the violation continues.
    (17) Civil money penalties assessed for false claims and statements 
pursuant to 31 U.S.C. 3802. Pursuant to the Program Fraud Civil 
Remedies Act (31 U.S.C. 3802), civil money penalties of not more than 
$10,781 per claim or statement may be assessed for violations involving 
false claims and statements.
    (18) Civil money penalties assessed for violations of 42 U.S.C. 
4012a(f). Pursuant to the Flood Disaster Protection Act (FDPA) (42 
U.S.C. 4012a(f)), civil money penalties may be assessed against any 
regulated lending institution that engages in a pattern or practice of 
violations of the FDPA in an amount not to exceed $2,056 per violation.

0
3. Revise 12 CFR 308.502(a)(6), (b)(4), and (d) to read as follows:


Sec.  308.502  Basis for civil penalties and assessments.

* * * * *
    (a) * * *
    (6) The amount of any penalty assessed under paragraph (a)(1) of 
this section will be adjusted for inflation in accordance with Sec.  
308.132(d)(17) of this part.
* * * * *
    (b) * * *
    (4) The amount of any penalty assessed under paragraph (a)(1) of 
this section will be adjusted for inflation in accordance with Sec.  
308.132(d)(17) of this part.
* * * * *

[[Page 42243]]

    (d) Civil money penalties that are assessed under this subpart are 
subject to annual adjustments to account for inflation as required by 
the Federal Civil Penalties Inflation Adjustment Act Improvements Act 
of 2015 (Pub. L. 114-74, sec. 701, 129 Stat. 584) (see also 12 CFR 
308.132(d)(17)).
* * * * *

PART 327--ASSESSMENTS

0
4. The authority citation for part 327 continues to read as follows:

    Authority:  12 U.S.C. 1441, 1813, 1815, 1817-19, 1821.


0
5. Revise Sec.  327.3(c) to read as follows:


Sec.  327.3  Payment of assessments.

* * * * *
    (c) Necessary action, sufficient funding by institution. Each 
insured depository institution shall take all actions necessary to 
allow the Corporation to debit assessments from the insured depository 
institution's designated deposit account. Each insured depository 
institution shall, prior to each payment date indicated in paragraph 
(b)(2) of this section, ensure that funds in an amount at least equal 
to the amount on the quarterly certified statement invoice are 
available in the designated account for direct debit by the 
Corporation. Failure to take any such action or to provide such funding 
of the account shall be deemed to constitute nonpayment of the 
assessment. Penalties for failure to timely pay assessments are 
provided for at 12 CFR 308.132(d)(9).
* * * * *

    Dated at Washington, DC, this 21st day of June, 2016.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2016-15027 Filed 6-28-16; 8:45 am]
 BILLING CODE 6714-01-P