[Federal Register Volume 82, Number 8 (Thursday, January 12, 2017)]
[Rules and Regulations]
[Pages 3601-3603]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00521]



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  Federal Register / Vol. 82, No. 8 / Thursday, January 12, 2017 / 
Rules and Regulations  

[[Page 3601]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1083


Civil Penalty Inflation Adjustments

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Final rule.

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SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
adjusting for inflation the maximum amount of each civil penalty within 
the Bureau's jurisdiction. These adjustments are required by the 
Federal Civil Penalties Inflation Adjustment Act of 1990 (the Inflation 
Adjustment Act), as amended by the Debt Collection Improvement Act of 
1996 and further amended by the Federal Civil Penalties Inflation 
Adjustment Act Improvements Act of 2015. The inflation adjustments 
mandated by the Inflation Adjustment Act serve to maintain the 
deterrent effect of civil penalties and to promote compliance with the 
law.

DATES: This final rule is effective January 15, 2017.

FOR FURTHER INFORMATION CONTACT: Jaclyn Maier, Counsel, Office of 
Regulations, Consumer Financial Protection Bureau, 1700 G Street NW., 
Washington, DC 20552, at (202) 435-7700.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Inflation Adjustment Act,\1\ as amended by the Debt Collection 
Improvement Act of 1996 \2\ and further amended by the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015,\3\ directs 
Federal agencies to adjust for inflation the civil penalty amounts 
within their jurisdiction not later than July 1, 2016, and then not 
later than January 15 every year thereafter.\4\ 28 U.S.C. 2461 note. 
Each agency was required to make the 2016 one-time catch-up adjustments 
through an interim final rule published in the Federal Register. On 
June 14, 2016, the Bureau published its interim final rule to make the 
initial catch-up adjustments to civil penalties within the Bureau's 
jurisdiction.\5\ The June 2016 interim final rule created a new part 
1083 and in Sec.  1083.1 established the inflation-adjusted maximum 
amounts for each civil penalty within the Bureau's jurisdiction.\6\ The 
Inflation Adjustment Act also requires subsequent adjustments to be 
made annually, not later than January 15, and notwithstanding section 
553 of the Administrative Procedure Act (APA).\7\
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    \1\ Public Law 101-410, 104 Stat. 890.
    \2\ Public Law 104-134, section 31001(s)(1), 110 Stat. 1321, 
1321-373.
    \3\ Public Law 114-74, section 701, 129 Stat. 584, 599.
    \4\ Section 1301(a) of the Federal Reports Elimination Act of 
1998, Public Law 105-362, 112 Stat. 3293, also amended the Inflation 
Adjustment Act by striking section 6, which contained annual 
reporting requirements, and redesignating section 7 as section 6, 
but did not alter the civil penalty adjustment requirements.
    \5\ 81 FR 38569 (June 14, 2016). Although the Bureau was not 
obligated to solicit comments for the interim final rule, the Bureau 
invited public comment and received none.
    \6\ See 12 CFR 1083.1.
    \7\ Inflation Adjustment Act section 4, codified at 28 U.S.C. 
2461 note.
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    Specifically, Federal agencies are directed to adjust annually each 
civil penalty provided by law within the jurisdiction of the agency by 
the ``cost-of-living adjustment.'' \8\ For annual adjustments after the 
initial catch up adjustments, the ``cost-of-living adjustment'' is 
defined as the percentage (if any) by which the Consumer Price Index 
for All Urban Consumers (CPI-U) for the month of October preceding the 
date of the adjustment, exceeds the CPI-U for October of the prior 
year.\9\ The Director of the Office of Management and Budget (OMB) is 
required to issue guidance (OMB Guidance) to agencies on implementing 
the annual civil penalty inflation adjustments by December 15, 2016, 
and December 15 every subsequent year.\10\ Pursuant to the Inflation 
Adjustment Act and OMB Guidance, agencies must apply the multiplier 
reflecting the ``cost-of-living adjustment'' to the current penalty 
amount and then round that amount to the nearest dollar to determine 
the annual adjustments.\11\
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    \8\ Inflation Adjustment Act sections 4 and 5, codified at 28 
U.S.C. 2461 note.
    \9\ Inflation Adjustment Act sections 3 and 5, codified at 28 
U.S.C. 2461 note.
    \10\ Memorandum from Shaun Donovan, Director, Office of 
Management and Budget, to the Heads of Executive Departments and 
Agencies (Dec. 16, 2016), https://www.whitehouse.gov/sites/default/files/omb/memoranda/2017/m-17-11_0.pdf.
    \11\ Inflation Adjustment Act section 5, codified at 28 U.S.C. 
2461 note; Memorandum from Shaun Donovan, Director, Office of 
Management and Budget, to the Heads of Executive Departments and 
Agencies (Dec. 16, 2016), https://www.whitehouse.gov/sites/default/files/omb/memoranda/2017/m-17-11_0.pdf.
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    For the 2017 annual adjustment, the multiplier reflecting the 
``cost-of-living adjustment'' is 1.01636.\12\ Pursuant to the Inflation 
Adjustment Act and OMB Guidance, the Bureau multiplied each of its 
civil penalty amounts by the ``cost-of-living adjustment'' multiplier 
and rounded to the nearest dollar.\13\
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    \12\ Memorandum from Shaun Donovan, Director, Office of 
Management and Budget, to the Heads of Executive Departments and 
Agencies (Dec. 16, 2016), https://www.whitehouse.gov/sites/default/files/omb/memoranda/2017/m-17-11_0.pdf. The multiplier reflecting 
the ``cost-of-living adjustment'' that OMB provides is rounded to 
five decimal places.
    \13\ In rounding to the nearest dollar, the Bureau has rounded 
down where the digit immediately following the decimal point is less 
than 5 and has rounded up where the digit immediately following the 
decimal point is 5 or greater.
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    The new penalty amounts that apply to civil penalties assessed 
after January 15, 2017 are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                    Penalty amounts
                                                                      established    OMB ``Cost-of-
                  Law                      Penalty description      under June 2016      living      New penalty
                                                                     interim final    adjustment''      amount
                                                                         rule          multiplier
----------------------------------------------------------------------------------------------------------------
Consumer Financial Protection Act, 12   Tier 1 penalty...........            $5,437         1.01636       $5,526
 U.S.C. 5565(c)(2)(A).
Consumer Financial Protection Act, 12   Tier 2 penalty...........            27,186         1.01636       27,631
 U.S.C. 5565(c)(2)(B).

[[Page 3602]]

 
Consumer Financial Protection Act, 12   Tier 3 penalty...........         1,087,450         1.01636    1,105,241
 U.S.C. 5565(c)(2)(C).
Interstate Land Sales Full Disclosure   Per violation............             1,894         1.01636        1,925
 Act, 15 U.S.C. 1717a(a)(2).
Interstate Land Sales Full Disclosure   Annual cap...............         1,893,610         1.01636    1,924,589
 Act, 15 U.S.C. 1717a(a)(2).
Real Estate Settlement Procedures Act,  Per failure..............                89         1.01636           90
 12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act,  Annual cap...............           178,156         1.01636      181,071
 12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act,  Per failure, where                      178         1.01636          181
 12 U.S.C. 2609(d)(2)(A).                intentional.
SAFE Act, 12 U.S.C. 5113(d)(2)........  Per violation............            27,455         1.01636       27,904
Truth in Lending Act, 15 U.S.C.         First violation..........            10,875         1.01636       11,053
 1639e(k)(1).
Truth in Lending Act, 15 U.S.C.         Subsequent violations....            21,749         1.01636       22,105
 1639e(k)(2).
----------------------------------------------------------------------------------------------------------------

II. Legal Authority

    The Bureau issues this final rule under the Inflation Adjustment 
Act,\14\ as amended by the Debt Collection Improvement Act of 1996 \15\ 
and further amended by the Federal Civil Penalties Inflation Adjustment 
Act Improvements Act of 2015,\16\ which requires the Bureau to adjust 
for inflation the civil penalties within its jurisdiction according to 
a statutorily prescribed formula.
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    \14\ Public Law 101-410, 104 Stat. 890.
    \15\ Public Law 104-134, section 31001(s)(1), 110 Stat. 1321, 
1321-373.
    \16\ Public Law 114-74, section 701, 129 Stat. 584, 599.
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III. Procedural Requirements

A. Administrative Procedure Act

    Under the APA, notice and opportunity for public comment are not 
required if the Bureau finds that notice and public comment are 
impracticable, unnecessary, or contrary to the public interest.\17\ 
Pursuant to this final rule, Sec.  1083.1 is amended to update the 
civil penalty amounts. The 2017 adjustments to the civil penalty 
amounts are technical and non-discretionary, and they merely apply the 
statutory method for adjusting civil penalty amounts. These adjustments 
are required by the Inflation Adjustment Act. Moreover, the Inflation 
Adjustment Act directs agencies to adjust the civil penalties annually 
notwithstanding section 553 of the APA,\18\ and OMB Guidance reaffirms 
that agencies need not complete a notice-and-comment process before 
making the annual adjustments for inflation.\19\ For these reasons, the 
Bureau has determined that publishing a notice of proposed rulemaking 
and providing opportunity for public comment are unnecessary. 
Therefore, the amendment is adopted in final form.
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    \17\ 5 U.S.C. 553(b)(B).
    \18\ Inflation Adjustment Act section 4, codified at 28 U.S.C. 
2461 note.
    \19\ Memorandum from Shaun Donovan, Director, Office of 
Management and Budget, to the Heads of Executive Departments and 
Agencies (Dec. 16, 2016), https://www.whitehouse.gov/sites/default/files/omb/memoranda/2017/m-17-11_0.pdf.
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    Section 553(d) of the APA generally requires publication of a final 
rule not less than 30 days before its effective date, except (1) a 
substantive rule which grants or recognizes an exemption or relieves a 
restriction; (2) interpretive rules and statements of policy; or (3) as 
otherwise provided by the agency for good cause found and published 
with the rule.\20\ At a minimum, the Bureau believes the annual 
adjustments to the civil penalty amounts in Sec.  1083.1 fall under the 
third exception to section 553(d). The Bureau finds that there is good 
cause to make the amendments effective on January 15, 2017. The 
amendments to Sec.  1083.1 in this final rule are technical and non-
discretionary, and they merely apply the statutory method for adjusting 
civil penalty amounts and follow the statutory directive to make annual 
adjustments by January 15 of each year. Moreover, the Inflation 
Adjustment Act directs agencies to adjust the civil penalties annually 
notwithstanding section 553 of the APA,\21\ and OMB Guidance reaffirms 
that agencies need not provide a delay in effective date for the annual 
adjustments for inflation.\22\
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    \20\ 5 U.S.C. 553(d).
    \21\ Inflation Adjustment Act section 4, codified at 28 U.S.C. 
2461 note.
    \22\ Memorandum from Shaun Donovan, Director, Office of 
Management and Budget, to the Heads of Executive Departments and 
Agencies (Dec. 16, 2016), https://www.whitehouse.gov/sites/default/files/omb/memoranda/2017/m-17-11_0.pdf.
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B. Regulatory Flexibility Act

    Because no notice of proposed rulemaking is required, the 
Regulatory Flexibility Act does not require an initial or final 
regulatory flexibility analysis.\23\
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    \23\ 5 U.S.C. 603(a), 604(a).
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C. Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995,\24\ the 
Bureau reviewed this final rule. No collections of information pursuant 
to the Paperwork Reduction Act are contained in the final rule.
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    \24\ 44 U.S.C. 3506; 5 CFR 1320.
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List of Subjects in 12 CFR Part 1083

    Administrative practice and procedure, Consumer protection, 
Penalties.

Authority and Issuance

0
For the reasons set forth above, the Bureau amends 12 CFR part 1083, as 
set forth below:

PART 1083--CIVIL PENALTY ADJUSTMENTS

0
1. The authority citation for part 1083 continues to read as follows:

    Authority:  12 U.S.C. 2609(d); 12 U.S.C. 5113(d)(2); 12 U.S.C. 
5565(c); 15 U.S.C. 1639e(k); 15 U.S.C. 1717a(a); 28 U.S.C. 2461 
note.


0
2. Section 1083.1 is revised to read as follows:


Sec.  1083.1  Adjustments of civil penalty amounts.

    (a) The maximum amount of each civil penalty within the 
jurisdiction of the Consumer Financial Protection Bureau to impose is 
adjusted in accordance with the Federal Civil Penalties Inflation 
Adjustment Act of 1990, as amended by the Debt Collection Improvement 
Act of 1996 and further amended by the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015, (28 U.S.C. 2461 
note) as follows:

[[Page 3603]]



------------------------------------------------------------------------
                                                             Adjusted
       U.S. Code citation             Civil penalty       maximum civil
                                       description        penalty amount
------------------------------------------------------------------------
12 U.S.C. 5565(c)(2)(A)........  Tier 1 penalty........           $5,526
12 U.S.C. 5565(c)(2)(B)........  Tier 2 penalty........           27,631
12 U.S.C. 5565(c)(2)(C)........  Tier 3 penalty........        1,105,241
15 U.S.C. 1717a(a)(2)..........  Per violation.........            1,925
15 U.S.C. 1717a(a)(2)..........  Annual cap............        1,924,589
12 U.S.C. 2609(d)(1)...........  Per failure...........               90
12 U.S.C. 2609(d)(1)...........  Annual cap............          181,071
12 U.S.C. 2609(d)(2)(A)........  Per failure, where                  181
                                  intentional.
12 U.S.C. 5113(d)(2)...........  Per violation.........           27,904
15 U.S.C. 1639e(k)(1)..........  First violation.......           11,053
15 U.S.C. 1639e(k)(2)..........  Subsequent violations.           22,105
------------------------------------------------------------------------

    (b) The adjustments in paragraph (a) of this section shall apply to 
civil penalties assessed after January 15, 2017, regardless of when the 
violation for which the penalty is assessed occurred.

    Dated: January 4, 2017.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2017-00521 Filed 1-9-17; 4:15 pm]
 BILLING CODE 4810-AM-P