[Federal Register Volume 86, Number 49 (Tuesday, March 16, 2021)]
[Rules and Regulations]
[Pages 14370-14374]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-04817]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 28, 30, 87, 180, and 3282

[Docket No. FR-6252-F-01]


Adjustment of Civil Monetary Penalty Amounts for 2021

AGENCY: Office of the General Counsel, HUD.

ACTION: Final rule.

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SUMMARY: This rule provides for 2021 inflation adjustments of civil 
monetary penalty amounts required by the Federal Civil Penalties 
Inflation Adjustment Act of 1990, as amended by the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015.

DATES: Effective April 15, 2021.

FOR FURTHER INFORMATION CONTACT: Aaron Santa Anna, Associate General 
Counsel for Legislation and Regulations, Office of the General Counsel, 
Department of Housing and Urban Development, 451 7th Street SW, Room 
10276, Washington, DC 20024; telephone number 202-402-5138 (this is not 
a toll-free number). Hearing- or speech-impaired individuals may access 
this number via TTY by calling the Federal Relay Service at 800-877-
8339 (this is a toll-free number).

SUPPLEMENTARY INFORMATION:

I. Background

    The Federal Civil Penalties Inflation Adjustment Act Improvements 
Act of 2015 (the 2015 Act) (Pub. L. 114-74, Sec. 701), which further 
amended the Federal Civil Penalties Inflation Adjustment Act of 1990 
(Pub. L. 101-410), requires agencies to make annual adjustments to 
civil monetary penalty (CMP) amounts for inflation ``notwithstanding 
section 553 of title 5, United States Code.'' Section 553 refers to the 
Administrative Procedure Act, which provides for advance notice and 
public comment during the rulemaking process. However, as explained in 
Section III below, HUD has determined that advance notice and public 
comment on this final rule is unnecessary.
    This annual adjustment is for 2021. The annual adjustment is based 
on the percent change between the U.S. Department of Labor's Consumer 
Price

[[Page 14371]]

Index for All Urban Consumers (``CPI-U'') for the month of October 
preceding the date of the adjustment, and the CPI-U for October of the 
prior year (28 U.S.C. 2461 note, section (5)(b)(1)). Based on that 
formula, the cost-of-living adjustment multiplier for 2021 is 
1.01182.\1\ Pursuant to the 2015 Act, adjustments are rounded to the 
nearest dollar.\2\
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    \1\ Office of Management and Budget, M-21-10, Memorandum for the 
Heads of Executive Departments and Agencies, Implementation of 
Penalty Inflation Adjustments for 2021, Pursuant to the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015. 
(https://www.whitehouse.gov/wp-content/uploads/2020/12/M-21-10.pdf). 
(October 2020 CPI-U (260.388)/October 2019 CPI-U (257.346) = 
1.01182.)
    \2\ 28 U.S.C. 2461 note.
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II. This Final Rule

    This final rule makes the required 2021 inflation adjustment of 
HUD's civil money penalty amounts. Since HUD is not applying these 
adjustments retroactively, the 2021 increases apply to violations 
occurring on or after this rule's effective date. HUD provides a table 
showing how, for each component, the penalties are being adjusted for 
2021 pursuant to the 2015 Act. In the first column (``Description''), 
HUD provides a description of the penalty. In the second column 
(``Statutory Citation''), HUD provides the United States Code statutory 
citation providing for the penalty. In the third column (``Regulatory 
Citation''), HUD provides the Code of Federal Regulations citation 
under Title 24 for the penalty. In the fourth column (``Previous 
Amount''), HUD provides the amount of the penalty pursuant to the rule 
implementing the 2020 adjustment (85 FR 13041, April 06, 2020). In the 
fifth column (``2021 Adjusted Amount''), HUD lists the penalty after 
applying the 2021 inflation adjustment.

----------------------------------------------------------------------------------------------------------------
                                                      Regulatory citation                        2021 adjusted
          Description            Statutory citation         (24 CFR)         Previous amount         amount
----------------------------------------------------------------------------------------------------------------
False Claims...................  Omnibus Budget      Sec.   28.10(a)......  $11,665..........  $11,803.
                                  Reconciliation
                                  Act of 1986 (31
                                  U.S.C.
                                  3802(a)(1)).
False Statements...............  Omnibus Budget      Sec.   28.10(b)......  $11,665..........  $11,803.
                                  Reconciliation
                                  Act of 1986 (31
                                  U.S.C. 3802
                                  (a)(2)).
Advance Disclosure of Funding..  Department of       Sec.   30.20.........  $20,489..........  $20,731.
                                  Housing and Urban
                                  Development Act
                                  (42 U.S.C.
                                  3537a(c)).
Disclosure of Subsidy Layering.  Department of       Sec.   30.25.........  $20,489..........  $20,731.
                                  Housing and Urban
                                  Development Act
                                  (42 U.S.C.
                                  3545(f)).
FHA Mortgagees and Lenders       HUD Reform Act of   Sec.   30.35.........  Per Violation:     Per Violation:
 Violations.                      1989 (12 U.S.C.                            $10,245; Per       $10,366; Per
                                  1735f-14(a)(2)).                           Year: $2,048,915.  Year:
                                                                                                $2,073,133.
Other FHA Participants           HUD Reform Act of   Sec.   30.36.........  Per Violation:     Per Violation:
 Violations.                      1989 (12 U.S.C.                            $10,245; Per       $10,366; Per
                                  1735f-14(a)(2)).                           Year: $2,048,915.  Year:
                                                                                                $2,073,133.
Indian Loan Mortgagees           Housing Community   Sec.   30.40.........  Per Violation:     Per Violation:
 Violations.                      Development Act                            $10,245; Per       $10,366; Per
                                  of 1992 (12                                Year: $2,048,915.  Year:
                                  U.S.C. 1715z-                                                 $2,073,133.
                                  13a(g)(2)).
Multifamily & Section 202 or     HUD Reform Act of   Sec.   30.45.........  $51,222..........  $51,827
 811 Owners Violations.           1989 (12 U.S.C.
                                  1735f-15(c)(2)).
Ginnie Mae Issuers & Custodians  HUD Reform Act of   Sec.   30.50.........  Per Violation:     Per Violation:
 Violations.                      1989 (12 U.S.C.                            $10,245; Per       $10,366; Per
                                  1723i(a)).                                 Year: $2,048,915.  Year:
                                                                                                $2,073,133.
Title I Broker & Dealers         HUD Reform Act of   Sec.   30.60.........  Per Violation:     Per Violation:
 Violations.                      1989 (12 U.S.C.                            $10,245; Per       $10,366; Per
                                  1703).                                     Year: $2,048,915.  Year:
                                                                                                $2,073,133.
Lead Disclosure Violation......  Title X--           Sec.   30.65.........  $18,149..........  $18,364.
                                  Residential Lead-
                                  Based Paint
                                  Hazard Reduction
                                  Act of 1992 (42
                                  U.S.C.
                                  4852d(b)(1)).
Section 8 Owners Violations....  Multifamily         Sec.   30.68.........  $39,811..........  $40,282.
                                  Assisted Housing
                                  Reform and
                                  Affordability Act
                                  of 1997 (42
                                  U.S.C. 1437z-
                                  1(b)(2)).
Lobbying Violation.............  The Lobbying        Sec.   87.400........  Min: $20,489;      Min: $20,731;
                                  Disclosure Act of                          Max: $204,892.     Max: $207,314.
                                  1995 (31 U.S.C.
                                  1352).
Fair Housing Act Civil           Fair Housing Act    Sec.   180.671(a)....  No Priors:         No Priors:
 Penalties.                       (42 U.S.C.                                 $21,410; One       $21,663; One
                                  3612(g)(3)).                               Prior: $53,524;    Prior: $54,157;
                                                                             Two or More        Two or More
                                                                             Priors: $107,050.  Priors:
                                                                                                $108,315.
Manufactured Housing             Housing Community   Sec.   3282.10.......  Per Violation:     Per Violation:
 Regulations Violation.           Development Act                            $2,976; Per        $3,011; Per
                                  of 1974 (42                                Year: $3,719,428.  Year:
                                  U.S.C. 5410).                                                 $3,763,392.
----------------------------------------------------------------------------------------------------------------

III. Justification for Final Rulemaking for the 2021 Adjustments

    HUD generally publishes regulations for public comment before 
issuing a rule for effect, in accordance with its own regulations on 
rulemaking in 24 CFR part 10. However, part 10 provides for exceptions 
to the general rule if the agency finds good cause to omit advanced 
notice and public participation. The good cause requirement is 
satisfied when prior public procedure is ``impractical, unnecessary, or 
contrary to the public interest'' (see 24 CFR 10.1). As discussed, this 
final rule makes the required 2021 inflation adjustment, which HUD does 
not have discretion to change. Moreover, the 2015 Act specifies that a 
delay in the effective date under the Administrative Procedure Act is 
not required for annual adjustments under the 2015 Act. HUD has 
determined, therefore, that it is unnecessary to delay the 
effectiveness of the 2021 inflation adjustments to solicit public 
comments.
    Section 7(o) of the Department of Housing and Urban Development Act 
(42 U.S.C. 3535(o)) requires that any HUD regulation implementing any 
provision of the Department of Housing and Urban Development Reform Act 
of 1989 that authorizes the imposition of a civil money penalty may not 
become effective until after the expiration of a public comment period 
of not less than 60 days. This rule does not authorize

[[Page 14372]]

the imposition of a civil money penalty--rather, it makes a standard 
inflation adjustment to penalties that were previously authorized. As 
noted above, the 2021 inflation adjustments are made in accordance with 
a statutorily prescribed formula that does not provide for agency 
discretion. Accordingly, a delay in the effectiveness of the 2021 
inflation adjustments in order to provide the public with an 
opportunity to comment is unnecessary because the 2015 Act exempts the 
adjustments from the need for delay, the rule does not authorize the 
imposition of a civil money penalty, and, in any event, HUD would not 
have the discretion to make changes as a result of any comments.

IV. Findings and Certifications

Regulatory Review--Executive Orders 12866 and 13563

    Under Executive Order 12866 (Regulatory Planning and Review) (58 FR 
51735), a determination must be made whether a regulatory action is 
significant and, therefore, subject to review by the Office of 
Management and Budget (OMB) in accordance with the requirements of the 
order. Executive Order 13563 (Improving Regulations and Regulatory 
Review) (76 FR 3821) directs executive agencies to analyze regulations 
that are ``outmoded, ineffective, insufficient, or excessively 
burdensome, and to modify, streamline, expand, or repeal them in 
accordance with what has been learned.'' Executive Order 13563 also 
directs that, where relevant, feasible, and consistent with regulatory 
objectives, and to the extent permitted by law, agencies are to 
identify and consider regulatory approaches that reduce burdens and 
maintain flexibility and freedom of choice for the public. As discussed 
above in this preamble, this final rule adjusts existing civil monetary 
penalties for inflation by a statutorily required amount. HUD 
determined that this rule was not significant under Executive Order 
12866 and Executive Order 13563.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) 
generally requires an agency to conduct a regulatory flexibility 
analysis of any rule subject to notice and comment rulemaking 
requirements, unless the agency certifies that the rule will not have a 
significant economic impact on a substantial number of small entities. 
Because HUD has determined that good cause exists to issue this rule 
without prior public comment, this rule is not subject to the 
requirement to publish an initial or final regulatory flexibility 
analysis under the RFA as part of such action.

Unfunded Mandates Reform

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) \3\ 
requires that an agency prepare a budgetary impact statement before 
promulgating a rule that includes a Federal mandate that may result in 
the expenditure by State, local, and tribal governments, in the 
aggregate, or by the private sector, of $100 million or more in any one 
year. If a budgetary impact statement is required, section 205 of UMRA 
also requires an agency to identify and consider a reasonable number of 
regulatory alternatives before promulgating a rule.\4\ However, the 
UMRA applies only to rules for which an agency publishes a general 
notice of proposed rulemaking. As discussed above, HUD has determined, 
for good cause, that prior notice and public comment is not required on 
this rule and, therefore, the UMRA does not apply to this final rule.
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    \3\ 2 U.S.C. 1532.
    \4\ 2 U.S.C. 1535.
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Executive Order 13132, Federalism

    Executive Order 13132 (entitled ``Federalism'') (64 FR 43255) 
prohibits an agency from publishing any rule that has federalism 
implications if the rule either imposes substantial direct compliance 
costs on State and local governments and is not required by statute, or 
the rule preempts State law, unless the agency meets the consultation 
and funding requirements of section 6 of the Executive Order. This rule 
will not have federalism implications and would not impose substantial 
direct compliance costs on State and local governments or preempt State 
law within the meaning of the Executive order.

Environmental Review

    This final rule does not direct, provide for assistance or loan and 
mortgage insurance for, or otherwise govern, or regulate, real property 
acquisition, disposition, leasing, rehabilitation, alteration, 
demolition, or new construction, or establish, revise, or provide for 
standards for construction or construction materials, manufactured 
housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this 
final rule is categorically excluded from environmental review under 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

List of Subjects

24 CFR Part 28

    Administrative practice and procedure, Claims, Fraud, Penalties.

24 CFR Part 30

    Administrative practice and procedure, Grant programs--housing and 
community development, Loan programs--housing and community 
development, Mortgage insurance, Penalties.

24 CFR Part 87

    Government contracts, Grant programs, Loan programs, Lobbying, 
Penalties, Reporting and recordkeeping requirements.

24 CFR Part 180

    Administrative practice and procedure, Aged, Civil rights, Fair 
housing, Persons with disabilities, Investigations, Mortgages, 
Penalties, Reporting and recordkeeping requirements.

24 CFR Part 3282

    Administrative practice and procedure, Consumer protection, 
Intergovernmental relations, Manufactured homes, Reporting and 
recordkeeping requirements.

    Accordingly, for the reasons described in the preamble, HUD amends 
24 CFR parts 28, 30, 87, 180, and 3282 to read as follows:

PART 28--IMPLEMENTATION OF THE PROGRAM FRAUD CIVIL REMEDIES ACT OF 
1986

0
1. The authority citation for part 28 continues to read as follows:

    Authority:  28 U.S.C. 2461 note; 31 U.S.C. 3801-3812; 42 U.S.C. 
3535(d).


0
2. In Sec.  28.10, revise paragraphs (a)(1) introductory text and 
(b)(1) introductory text to read as follows:


Sec.  28.10   Basis for civil penalties and assessments.

    (a) * * *. (1) A civil penalty of not more than $11,803 may be 
imposed upon any person who makes, presents, or submits, or causes to 
be made, presented, or submitted, a claim that the person knows or has 
reason to know:
* * * * *
    (b) * * *. (1) A civil penalty of not more than $11,803 may be 
imposed upon any person who makes, presents, or submits, or causes to 
be made, presented, or submitted, a written statement that:
* * * * *

[[Page 14373]]

PART 30--CIVIL MONEY PENALTIES: CERTAIN PROHIBITED CONDUCT

0
3. The authority citation for part 30 continues to read as follows:

    Authority:  12 U.S.C. 1701q-1, 1703, 1723i, 1735f-14, and 1735f-
15; 15 U.S.C. 1717a; 28 U.S.C. 1 note and 2461 note; 42 U.S.C. 
1437z-1 and 3535(d).


0
4. In Sec.  30.20, revise paragraph (b) to read as follows:


Sec.  30.20   Ethical violations by HUD employees.

* * * * *
    (b) Maximum penalty. The maximum penalty is $20,731 for each 
violation.

0
5. In Sec.  30.25, revise paragraph (b) to read as follows:


Sec.  30.25   Violations by applicants for assistance.

* * * * *
    (b) Maximum penalty. The maximum penalty is $20,731 for each 
violation.

0
6. In Sec.  30.35, revise the first sentence in paragraph (c)(1) to 
read as follows:


Sec.  30.35   Mortgagees and lenders.

* * * * *
    (c)(1) * * * The maximum penalty is $10,366 for each violation, up 
to a limit of $2,073,133 for all violations committed during any one-
year period. * * *
* * * * *

0
7. In Sec.  30.36, revise the first sentence in paragraph (c) to read 
as follows:


Sec.  30.36   Other participants in FHA programs.

* * * * *
    (c) * * * The maximum penalty is $10,366 for each violation, up to 
a limit of $2,073,133 for all violations committed during any one-year 
period. * * *

0
8. In Sec.  30.40, revise the first sentence in paragraph (c) to read 
as follows:


Sec.  30.40   Loan guarantees for Indian housing.

* * * * *
    (c) * * * The maximum penalty is $10,366 for each violation, up to 
a limit of $2,073,133 for all violations committed during any one-year 
period. * * *

0
9. In Sec.  30.45, revise paragraph (g) to read as follows:


Sec.  30.45   Multifamily and section 202 or 811 mortgagors.

* * * * *
    (g) Maximum penalty. The maximum penalty for each violation under 
paragraphs (c) and (f) of this section is $51,827.
* * * * *

0
10. In Sec.  30.50, revise the first sentence in paragraph (c) to read 
as follows:


Sec.  30.50   GNMA issuers and custodians.

* * * * *
    (c) * * * The maximum penalty is $10,366 for each violation, up to 
a limit of $2,073,133 during any one-year period. * * *

0
11. In Sec.  30.60, revise paragraph (c) to read as follows:


Sec.  30.60   Dealers or sponsored third-party originators.

* * * * *
    (c) Amount of penalty. The maximum penalty is $10,366 for each 
violation, up to a limit for any particular person of $2,073,133 during 
any one-year period.

0
12. In Sec.  30.65, revise paragraph (b) to read as follows:


Sec.  30.65   Failure to disclose lead-based paint hazards.

* * * * *
    (b) Amount of penalty. The maximum penalty is $18,364 for each 
violation.

0
13. In Sec.  30.68, revise paragraph (c) to read as follows:


Sec.  30.68   Section 8 owners.

* * * * *
    (c) Maximum penalty. The maximum penalty for each violation under 
this section is $40,282.
* * * * *

PART 87--NEW RESTRICTIONS ON LOBBYING

0
14. The authority citation for part 87 continues to read as follows:

    Authority:  28 U.S.C. 1 note; 31 U.S.C. 1352; 42 U.S.C. 3535(d).


0
15. In Sec.  87.400, revise paragraphs (a), (b), and (e) to read as 
follows:


Sec.  87.400   Penalties.

    (a) Any person who makes an expenditure prohibited herein shall be 
subject to a civil penalty of not less than $20,731 and not more than 
$207,314 for each such expenditure.
    (b) Any person who fails to file or amend the disclosure form (see 
appendix B of this part) to be filed or amended if required herein, 
shall be subject to a civil penalty of not less than $20,731 and not 
more than $207,314 for each such failure.
* * * * *
    (e) First offenders under paragraphs (a) or (b) of this section 
shall be subject to a civil penalty of $20,731, absent aggravating 
circumstances. Second and subsequent offenses by persons shall be 
subject to an appropriate civil penalty between $20,731 and $207,314 as 
determined by the agency head or his or her designee.
* * * * *

PART 180--CONSOLIDATED HUD HEARING PROCEDURES FOR CIVIL RIGHTS 
MATTERS

0
16. The authority citation for part 180 continues to read as follows:

    Authority:  28 U.S.C. 1 note; 29 U.S.C. 794; 42 U.S.C. 2000d-1, 
3535(d), 3601-3619, 5301-5320, and 6103.

0
17. In Sec.  180.671, revise paragraphs (a)(1) through (3) to read as 
follows:


Sec.  180.671   Assessing civil penalties for Fair Housing Act cases.

    (a) * * *
    (1) $21,663, if the respondent has not been adjudged in any 
administrative hearing or civil action permitted under the Fair Housing 
Act or any state or local fair housing law, or in any licensing or 
regulatory proceeding conducted by a federal, state, or local 
governmental agency, to have committed any prior discriminatory housing 
practice.
    (2) $54,157, if the respondent has been adjudged in any 
administrative hearing or civil action permitted under the Fair Housing 
Act, or under any state or local fair housing law, or in any licensing 
or regulatory proceeding conducted by a federal, state, or local 
government agency, to have committed one other discriminatory housing 
practice and the adjudication was made during the 5-year period 
preceding the date of filing of the charge.
    (3) $108,315, if the respondent has been adjudged in any 
administrative hearings or civil actions permitted under the Fair 
Housing Act, or under any state or local fair housing law, or in any 
licensing or regulatory proceeding conducted by a federal, state, or 
local government agency, to have committed two or more discriminatory 
housing practices and the adjudications were made during the 7-year 
period preceding the date of filing of the charge.
* * * * *

PART 3282--MANUFACTURED HOME PROCEDURAL AND ENFORCEMENT REGULATIONS

0
18. The authority citation for part 3282 continues to read as follows:

    Authority:  15 U.S.C. 2967; 42 U.S.C. 3535(d), 5403, and 5424.


0
19. Revise Sec.  3282.10 to read as follows:

[[Page 14374]]

Sec.  3282.10   Civil and criminal penalties.

    Failure to comply with these regulations may subject the party in 
question to the civil and criminal penalties provided for in section 
611 of the Act, 42 U.S.C. 5410. The maximum amount of penalties imposed 
under section 611 of the Act shall be $3,011 for each violation, up to 
a maximum of $3,763,392 for any related series of violations occurring 
within one year from the date of the first violation.

Damon Smith,
Principal Deputy General Counsel.
[FR Doc. 2021-04817 Filed 3-15-21; 8:45 am]
BILLING CODE 4210-67-P