[Federal Register Volume 83, Number 198 (Friday, October 12, 2018)]
[Proposed Rules]
[Pages 51653-51654]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-22217]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 83, No. 198 / Friday, October 12, 2018 / 
Proposed Rules

[[Page 51653]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1083

[Docket No. CFPB-2018-0034]


Civil Penalty Inflation Adjustments

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Proposed rule with request for public comment.

-----------------------------------------------------------------------

SUMMARY: The Bureau of Consumer Financial Protection (Bureau) is 
proposing to amend its rule adjusting for inflation the maximum amount 
of each civil penalty within the Bureau's jurisdiction pursuant to 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 Bureau is proposing an amendment 
to specify that the adjusted civil monetary penalties only apply to 
assessments whose associated violations occurred on, or after, November 
2, 2015 (the date the 2015 Inflation Adjustment Act amendments were 
signed into law). The Bureau requests public comment on all aspects of 
this proposal.

DATES: Comments must be received on or before November 13, 2018.

ADDRESSES: You may submit comments, identified by Docket No. CFPB-2018-
0034 or RIN 3170-AA62, by any of the following methods:
     eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
     Email: FederalRegisterComments@cfpb.gov. Include Docket 
No. CFPB-2018-0034 or RIN 3170-AA62 in the subject line of the email.
     Mail/Hand Delivery/Courier: Comment Intake, Bureau of 
Consumer Financial Protection Bureau, 1700 G Street NW, Washington, DC 
20552.
    Instructions: All submissions should include the agency name and 
docket number or Regulatory Information Number (RIN) for this 
rulemaking. Because paper mail in the Washington, DC area and at the 
Bureau is subject to delay, commenters are encouraged to submit 
comments electronically. In general, all comments received will be 
posted without change to http://www.regulations.gov. In addition, 
comments will be available for public inspection and copying at 1700 G 
Street NW, Washington, DC 20552, on official business days between the 
hours of 10 a.m. and 5:30 p.m. Eastern Time. You can make an 
appointment to inspect the documents by telephoning 202-435-7275.
    All comments, including attachments and other supporting materials, 
will become part of the public record and subject to public disclosure. 
Sensitive personal information, such as account numbers or Social 
Security numbers, should not be included. Comments will not be edited 
to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: Monique Chenault, Paralegal Specialist 
or Shelley Thompson, Counsel, Office of Regulations, at (202) 435-7700 
or https://reginquiries.consumerfinance.gov. If you require this 
document in an alternative electronic format, please contact 
CFPB_Accessibility@cfpb.gov.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Federal Civil Penalties Inflation Adjustment Act of 1990, as 
amended by the Debt Collection Improvement Act of 1996 and further 
amended in 2015 (Inflation Adjustment Act or Act), requires federal 
agencies to adjust the civil penalty amounts within their respective 
jurisdictions for inflation not later than July 1, 2016, and then not 
later than January 15 every year thereafter.\1\ The adjustments are 
designed to keep pace with inflation so that civil penalties retain 
their deterrent effect and promote compliance with the law.\2\
---------------------------------------------------------------------------

    \1\ See 28 U.S.C. 2461 note.
    \2\ See Inflation Adjustment Act section 2, codified at 28 
U.S.C. 2461 note.
---------------------------------------------------------------------------

    In June 2016, the Bureau issued an interim final rule (IFR) to 
create 12 CFR part 1083 and adjust the Bureau's civil penalty 
amounts.\3\ The Bureau did not receive comments in response to the IFR, 
which became effective on July 14, 2016. The Bureau annually adjusted 
its civil penalty amounts, as required by the Act, through rules issued 
in January 2017 and January 2018.\4\
---------------------------------------------------------------------------

    \3\ 81 FR 38569 (June 14, 2016).
    \4\ 82 FR 3601 (Jan. 12, 2017); 83 FR 1525 (Jan. 12, 2018).
---------------------------------------------------------------------------

    Section 6 of the Inflation Adjustment Act states that the increased 
civil penalty amounts ``shall apply only to civil monetary penalties, 
including those whose associated violation predated such increase, 
which are assessed after the date the increase takes effect.'' \5\ 12 
CFR 1083.1(b) as implemented by the IFR states that the Bureau's 
adjusted penalty amounts ``shall apply to civil penalties assessed 
after July 14, 2016, regardless of when the violation for which the 
penalty is assessed occurred.'' \6\
---------------------------------------------------------------------------

    \5\ Inflation Adjustment Act section 6, codified at 28 U.S.C. 
2461 note.
    \6\ The subsequent annual adjustments have retained this general 
language other than updating the date to reflect the effective date 
of the particular annual adjustment.
---------------------------------------------------------------------------

    The Director of the Office of Management and Budget (OMB) is 
required to issue guidance every year by December 15 to agencies on 
implementing the annual civil penalty inflation adjustments.\7\ In 
2017, the Office of Management and Budget issued guidance stating that, 
``[f]or the 2018 annual adjustment, the new penalty amounts should 
apply to penalties assessed after the effective date of the 2018 annual 
adjustment--which will be no later than January 15, 2018--including, if 
consistent with agency policy, assessments whose associated violations 
occurred on, or after, November 2, 2015'' (i.e., the date the 2015 
Amendments were signed into law).\8\
---------------------------------------------------------------------------

    \7\ Inflation Adjustment Act section 7, codified at 28 U.S.C. 
2461 note.
    \8\ Memorandum to the Exec. Dep'ts & Agencies from Mick 
Mulvaney, Director, Office of Mgmt. & Budget, at 4 (Dec. 15, 2017), 
available at https://www.whitehouse.gov/wp-content/uploads/2017/11/M-18-03.pdf. OMB's guidance issued in December 2016 (https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/memoranda/2017/m-17-11_0.pdf) contained similar language.
---------------------------------------------------------------------------

    Consistent with the OMB guidance, the Bureau proposes to finalize 
the IFR with changes that specify that adjusted penalties will apply 
only to violations that occurred on or after November 2, 2015. The 
Bureau proposes to revise Sec.  1083.1(b) to read as follows: ``The 
adjustments in paragraph (a) of this section shall apply to civil 
penalties

[[Page 51654]]

assessed after January 15, 2019, whose associated violations occurred 
on or after November 2, 2015.'' The Bureau requests comment on this 
proposed change and all aspects of this proposal.

II. Legal Authority and Proposed Effective Date

    The Bureau issues this proposal under the Federal Civil Penalties 
Inflation Adjustment Act of 1990,\9\ as amended by the Debt Collection 
Improvement Act of 1996 \10\ and further amended by the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015,\11\ which 
requires the Bureau to adjust for inflation the civil penalties within 
its jurisdiction according to a statutorily prescribed formula.
---------------------------------------------------------------------------

    \9\ Public Law 101-410, 104 Stat. 890.
    \10\ Public Law 104-134, section 31001(s)(1), 110 Stat. 1321, 
1321-373.
    \11\ Public Law 114-74, section 701, 129 Stat. 584, 599.
---------------------------------------------------------------------------

    The Bureau proposes to issue a final rule with an effective date no 
sooner than January 15, 2019. The Bureau believes the effective date 
would coincide with, or occur after, the effective date of a 2019 
annual adjustment by the Bureau under the Act.\12\ The Bureau seeks 
comment on whether this proposed approach is appropriate.
---------------------------------------------------------------------------

    \12\ The Administrative Procedure Act generally requires an 
agency to publish a rule at least 30 days before its effective date. 
See 5 U.S.C. 553(d).
---------------------------------------------------------------------------

III. Regulatory Flexibility Act (RFA)

    The RFA generally requires an agency to conduct an initial 
regulatory flexibility analysis (IRFA) and a final regulatory 
flexibility analysis (FRFA) of any rule subject to notice-and-comment 
rulemaking requirements. An IRFA or FRFA is not required if the agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities.\13\ The Bureau also is subject 
to certain additional procedures under the RFA involving the convening 
of a panel to consult with small business representatives prior to 
proposing a rule for which an IRFA is required.\14\
---------------------------------------------------------------------------

    \13\ See 5 U.S.C. 601 et seq.
    \14\ See 5 U.S.C. 609.
---------------------------------------------------------------------------

    An IRFA is not required for this proposal because if adopted it 
would not have a significant economic impact on a substantial number of 
small entities. If adopted as proposed, the rule simply specifies that 
increased penalty amounts apply only to violations that occurred on or 
after November 2, 2015, rather than also to violations that occurred 
prior to November 2, 2015. Because it would limit the civil penalties 
covered persons may pay, the proposed rule would not impose any 
additional costs on them. Nor does the rule impose any new, affirmative 
duty on any small entity or change any existing requirements on small 
entities, and thus no small entity who is currently complying with the 
laws that the Bureau enforces will incur any expense from the amended 
rule.
    Accordingly, the Bureau's Acting Director, by signing below, 
certifies that this proposal, if adopted, would not have a significant 
economic impact on a substantial number of small entities. The Bureau 
requests comment on the analysis above and requests any relevant data.

IV. Paperwork Reduction Act

    The Bureau has determined that the proposed rule does not impose 
any new or revise any existing recordkeeping, reporting, or disclosure 
requirements on covered entities or members of the public that would be 
collections of information requiring approval by OMB under the 
Paperwork Reduction Act (PRA).\15\ The Bureau welcomes comments on this 
determination or any other aspects of this proposal for purposes of the 
PRA.
---------------------------------------------------------------------------

    \15\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

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 proposes to amend 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(b) is revised to read as follows:


Sec.  1083.1  Adjustments of civil penalty amounts.

* * * * *
    (b) The adjustments in paragraph (a) of this section shall apply to 
civil penalties assessed after January 15, 2019, whose associated 
violations occurred on or after November 2, 2015.

    Dated: October 5, 2018.
Mick Mulvaney,
Acting Director, Bureau of Consumer Financial Protection.
[FR Doc. 2018-22217 Filed 10-11-18; 8:45 am]
 BILLING CODE 4810-AM-P