[Federal Register Volume 83, Number 9 (Friday, January 12, 2018)]
[Rules and Regulations]
[Pages 1525-1527]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-00399]


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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, 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 (Inflation Adjustment Act). 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, 2018.

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

SUPPLEMENTARY INFORMATION:

I. Background

    The Federal Civil Penalties Inflation Adjustment Act of 1990,\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 (Inflation Adjustment Act),\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) every year by December 15 to 
agencies on implementing the annual civil penalty inflation 
adjustments.\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\ Inflation Adjustment Act section 7, codified at 28 U.S.C. 
2461 note.
    \11\ Inflation Adjustment Act section 5, codified at 28 U.S.C. 
2461 note; Memorandum to the Exec. Dep'ts & Agencies from Mick 
Mulvaney, Director, Office of Mgmt. & Budget (Dec. 15, 2017), 
available at https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf.
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    For the 2018 annual adjustment, the multiplier reflecting the 
``cost-of-living

[[Page 1526]]

adjustment'' is 1.02041.\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 to the Exec. Dep'ts & Agencies from Mick 
Mulvaney, Director, Office of Mgmt. & Budget (Dec. 15, 2017), 
available at https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf.
    \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, 2018 are as follows:

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                                                                      Penalty
                                                                      amounts     OMB ``Cost-of-
                  Law                      Penalty description      established       Living        New penalty
                                                                    under 2017     Adjustment''       amount
                                                                    final rule      multiplier
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Consumer Financial Protection Act, 12   Tier 1 penalty..........          $5,526         1.02041          $5,639
 U.S.C. 5565(c)(2)(A).
Consumer Financial Protection Act, 12   Tier 2 penalty..........          27,631         1.02041          28,195
 U.S.C. 5565(c)(2)(B).
Consumer Financial Protection Act, 12   Tier 3 penalty..........       1,105,241         1.02041       1,127,799
 U.S.C. 5565(c)(2)(C).
Interstate Land Sales Full Disclosure   Per violation...........           1,925         1.02041           1,964
 Act, 15 U.S.C. 1717a(a)(2).
Interstate Land Sales Full Disclosure   Annual cap..............       1,924,589         1.02041       1,963,870
 Act, 15 U.S.C. 1717a(a)(2).
Real Estate Settlement Procedures Act,  Per failure.............              90         1.02041              92
 12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act,  Annual cap..............         181,071         1.02041         184,767
 12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act,  Per failure, where                   181         1.02041             185
 12 U.S.C. 2609(d)(2)(A).                intentional.
SAFE Act, 12 U.S.C. 5113(d)(2)........  Per violation...........          27,904         1.02041          28,474
Truth in Lending Act, 15 U.S.C.         First violation.........          11,053         1.02041          11,279
 1639e(k)(1).
Truth in Lending Act, 15 U.S.C.         Subsequent violations...          22,105         1.02041          22,556
 1639e(k)(2).
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II. Legal Authority

    The Bureau issues this final rule under the Federal Civil Penalties 
Inflation Adjustment Act of 1990,\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 2018 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 to the Exec. Dep'ts & Agencies from Mick 
Mulvaney, Director, Office of Mgmt. & Budget (Dec. 15, 2017), 
available at https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.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, 2018. 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 to the Exec. Dep'ts & Agencies from Mick 
Mulvaney, Director, Office of Mgmt. & Budget (Dec. 15, 2017), 
available at https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.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 part 1320.
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D. Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
CFPB will submit a report containing this rule and other required 
information to the U.S. Senate, the U.S. House of Representatives, and 
the Comptroller General of the United States prior to the rule taking 
effect. The Office of Information and Regulatory Affairs (OIRA) has 
designated this rule as not a ``major rule'' as defined by 5 U.S.C. 
804(2).

List of Subjects in 12 CFR Part 1083

    Administrative practice and procedure, Consumer protection, 
Penalties.

Authority and Issuance

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

[[Page 1527]]

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:

------------------------------------------------------------------------
                                                             Adjusted
                                      Civil penalty       maximum  civil
       U.S. Code citation              description            penalty
                                                              amount
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12 U.S.C. 5565(c)(2)(A)........  Tier 1 penalty.........          $5,639
12 U.S.C. 5565(c)(2)(B)........  Tier 2 penalty.........          28,195
12 U.S.C. 5565(c)(2)(C)........  Tier 3 penalty.........       1,127,799
15 U.S.C. 1717a(a)(2)..........  Per violation..........           1,964
15 U.S.C. 1717a(a)(2)..........  Annual cap.............       1,963,870
12 U.S.C. 2609(d)(1)...........  Per failure............              92
12 U.S.C. 2609(d)(1)...........  Annual cap.............         184,767
12 U.S.C. 2609(d)(2)(A)........  Per failure, where                  185
                                  intentional.
12 U.S.C. 5113(d)(2)...........  Per violation..........          28,474
15 U.S.C. 1639e(k)(1)..........  First violation........          11,279
15 U.S.C. 1639e(k)(2)..........  Subsequent violations..          22,556
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    (b) The adjustments in paragraph (a) of this section shall apply to 
civil penalties assessed after January 15, 2018, regardless of when the 
violation for which the penalty is assessed occurred.

    Dated: January 4, 2018.
Mick Mulvaney,
Acting Director, Bureau of Consumer Financial Protection.
[FR Doc. 2018-00399 Filed 1-11-18; 8:45 am]
BILLING CODE 4810-AM-P