[Federal Register Volume 88, Number 1 (Tuesday, January 3, 2023)]
[Rules and Regulations]
[Pages 1-3]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-28442]



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 Rules and Regulations
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  Federal Register / Vol. 88, No. 1 / Tuesday, January 3, 2023 / Rules 
and Regulations  

[[Page 1]]



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 Consumer Financial Protection Bureau (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 (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, 2023.

FOR FURTHER INFORMATION CONTACT: Adrien Fernandez, Counsel, Thomas 
Dowell, Senior Counsel, Office of Regulations, at (202) 435-7700. If 
you require this document in an alternative electronic format, please 
contact [email protected].

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 the civil penalty amounts within their 
jurisdiction for inflation not later than July 1, 2016, and then not 
later than January 15 every year thereafter.\4\ 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 (IFR) to make the initial 
catch-up adjustments to civil penalties within the Bureau's 
jurisdiction.\5\ The June 2016 IFR created a new part 1083 and in 
1083.1 established the inflation-adjusted maximum amounts for each 
civil penalty within the Bureau's jurisdiction.\6\ The Bureau finalized 
the IFR on January 31, 2019.\7\
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    \1\ Public Law 101-410, 104 Stat. 890.
    \2\ Public Law 104-134, sec. 31001(s)(1), 110 Stat. 1321, 1321-
373.
    \3\ Public Law 114-74, sec. 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; 28 
U.S.C. 2461 note.
    \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\ 84 FR 517 (Jan. 31, 2019).
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    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).\8\ The Bureau 
annually adjusted its civil penalty amounts, as required by the Act, 
through rules issued in January 2017, January 2018, January 2019, 
January 2020, January 2021, and January 2022.\9\
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    \8\ Inflation Adjustment Act section 4, codified at 28 U.S.C. 
2461 note. As discussed in guidance issued by the Director of the 
Office of Management and Budget (OMB), the APA generally requires 
notice, an opportunity for comment, and a delay in effective date 
for certain rulemakings, but the Inflation Adjustment Act provides 
that these procedures are not required for agencies to issue 
regulations implementing the annual adjustment. See Memorandum for 
the Heads of Exec. Dep'ts & Agencies from Shalanda D. Young, 
Director, Implementation of Penalty Inflation Adjustments for 2023, 
Pursuant to the Federal Civil Penalties Inflation Adjustment Act 
Improvements Act of 2015, Off. of Mgmt. & Budget (Dec. 15, 2022), 
available at https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.pdf.
    \9\ 82 FR 3601 (Jan. 12, 2017); 83 FR 1525 (Jan. 12, 2018); 84 
FR 517 (Jan. 31, 2019); 85 FR 2012 (Jan. 14, 2020); 86 FR 3767 (Jan. 
15, 2021).
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    Specifically, the Act directs Federal agencies to adjust annually 
each civil penalty provided by law within the jurisdiction of the 
agency by the ``cost-of-living adjustment.'' \10\ 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.\11\ 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. 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.\12\ The adjustments are designed to keep pace with 
inflation so that civil penalties retain their deterrent effect and 
promote compliance with the law.\13\
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    \10\ Inflation Adjustment Act sections 4 and 5, codified at 28 
U.S.C. 2461 note.
    \11\ Inflation Adjustment Act sections 3 and 5, codified at 28 
U.S.C. 2461 note.
    \12\ Inflation Adjustment Act section 5, codified at 28 U.S.C. 
2461 note; see also Memorandum for the Heads of Exec. Dep'ts & 
Agencies from Shalanda D. Young, Director, Implementation of Penalty 
Inflation Adjustments for 2023, Pursuant to the Federal Civil 
Penalties Inflation Adjustment Act Improvements Act of 2015, Off. of 
Mgmt. & Budget (Dec. 15, 2022), available at https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.pdf.
    \13\ See Inflation Adjustment Act section 2, codified at 28 
U.S.C. 2461 note.
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    For the 2023 annual adjustment, the multiplier reflecting the 
``cost-of-living adjustment'' is 1.07745.

II. Adjustment

    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.\14\ 
The new penalty amounts that apply to civil penalties assessed after 
January 15, 2023, are as follows:
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    \14\ Inflation Adjustment Act section 4, codified at 28 U.S.C. 
2461 note.

[[Page 2]]



----------------------------------------------------------------------------------------------------------------
                                                                      Penalty
                                                                      amounts      OMB  ``cost-of-       New
                  Law                      Penalty description      established         living         penalty
                                                                    under 2021       adjustment''       amount
                                                                    final rule        multiplier
----------------------------------------------------------------------------------------------------------------
Consumer Financial Protection Act, 12   Tier 1 penalty..........          $6,323            1.07745       $6,813
 U.S.C. 5565(c)(2)(A).
Consumer Financial Protection Act, 12   Tier 2 penalty..........          31,616            1.07745       34,065
 U.S.C. 5565(c)(2)(B).
Consumer Financial Protection Act, 12   Tier 3 penalty..........       1,264,622            1.07745    1,362,567
 U.S.C. 5565(c)(2)(C).
Interstate Land Sales Full Disclosure   Per violation...........           2,203            1.07745        2,374
 Act, 15 U.S.C. 1717a(a)(2).
Interstate Land Sales Full Disclosure   Annual cap..............       2,202,123            1.07745    2,372,677
 Act, 15 U.S.C. 1717a(a)(2).
Real Estate Settlement Procedures Act,  Per failure.............             103            1.07745          111
 12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act,  Annual cap..............         207,183            1.07745      223,229
 12 U.S.C. 2609(d)(1).
Real Estate Settlement Procedures Act,  Per failure, where                   207            1.07745          223
 12 U.S.C. 2609(d)(2)(A).                intentional.
SAFE Act, 12 U.S.C. 5113(d)(2)........  Per violation...........          31,928            1.07745       34,401
Truth in Lending Act, 15 U.S.C.         First violation.........          12,647            1.07745       13,627
 1639e(k)(1).
Truth in Lending Act, 15 U.S.C.         Subsequent violations...          25,293            1.07745       27,252
 1639e(k)(2).
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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.\15\ The 
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 civil penalties annually notwithstanding section 553 of the 
APA,\16\ and OMB Guidance reaffirms that agencies need not complete a 
notice-and-comment process before making the annual adjustments for 
inflation.\17\ For these reasons, the Bureau has determined that 
publishing a notice of proposed rulemaking and providing opportunity 
for public comment are unnecessary. The amendments therefore are 
adopted in final form.
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    \15\ 5 U.S.C. 553(b)(B).
    \16\ Inflation Adjustment Act section 4, codified at 28 U.S.C. 
2461 note.
    \17\ Memorandum for the Heads of Exec. Dep'ts & Agencies from 
Shalanda D. Young, Director, Implementation of Penalty Inflation 
Adjustments for 2023, Pursuant to the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015, Off. of Mgmt. & 
Budget (Dec. 15, 2022), available at https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.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.\18\ At minimum, the Bureau believes the annual 
adjustments to the civil penalty amounts in Sec.  1083.1(a) 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, 2022. The 
amendments to Sec.  1083.1(a) 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 each year. Moreover, the Inflation Adjustment Act directs 
agencies to adjust the civil penalties annually notwithstanding section 
553 of the APA,\19\ and OMB Guidance reaffirms that agencies need not 
provide a delay in effective date for the annual adjustments for 
inflation.\20\
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    \18\ 5 U.S.C. 553(d).
    \19\ Inflation Adjustment Act section 4, codified at 28 U.S.C. 
2461 note.
    \20\ Memorandum for the Heads of Exec. Dep'ts & Agencies from 
Shalanda D. Young, Director, Implementation of Penalty Inflation 
Adjustments for 2023, Pursuant to the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015, Off. of Mgmt. & 
Budget (Dec. 15, 2022), available at https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.pdf.
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B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) does not apply to a rulemaking 
where a general notice of proposed rulemaking is not required.\21\ As 
noted previously, the Bureau has determined that it is unnecessary to 
publish a general notice of proposed rulemaking for this final rule. 
Accordingly, the RFA's requirement relating to an initial and final 
regulatory flexibility analysis do not apply.
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    \21\ 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,\22\ the 
Bureau reviewed this final rule. The Bureau has determined that this 
rule does not create any new information collections or substantially 
revise any existing collections.
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    \22\ 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.), 
the Bureau will submit a report containing this rule and other required 
information to the United States Senate, the United States 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).

IV. Signing Authority

    Senior Advisor Brian Shearer, having reviewed and approved this 
document, is delegating the authority to electronically sign this 
document to Laura Galban, a Bureau Federal Register Liaison, for 
purposes of publication in the Federal Register.

List of Subjects in 12 CFR Part 1083

    Administrative practice and procedure, Consumer protection, 
Penalties.

Authority and Issuance

    For the reasons set forth in the preamble, 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:

[[Page 3]]

Sec.  1083.1   Adjustment 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:

                        Table 1 to Paragraph (a)
------------------------------------------------------------------------
                                                             Adjusted
              Law                  Penalty description    maximum  civil
                                                         penalty  amount
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12 U.S.C. 5565(c)(2)(A)........  Tier 1 penalty........           $6,813
12 U.S.C. 5565(c)(2)(B)........  Tier 2 penalty........           34,065
12 U.S.C. 5565(c)(2)(C)........  Tier 3 penalty........        1,362,567
15 U.S.C. 1717a(a)(2)..........  Per violation.........            2,374
15 U.S.C. 1717a(a)(2)..........  Annual cap............        2,372,677
12 U.S.C. 2609(d)(1)...........  Per failure...........              111
12 U.S.C. 2609(d)(1)...........  Annual cap............          223,229
12 U.S.C. 2609(d)(2)(A)........  Per failure, where                  223
                                  intentional.
12 U.S.C. 5113(d)(2)...........  Per violation.........           34,401
15 U.S.C. 1639e(k)(1)..........  First violation.......           13,627
15 U.S.C. 1639e(k)(2)..........  Subsequent violations.           27,252
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    (b) The adjustments in paragraph (a) of this section shall apply to 
civil penalties assessed after January 15, 2023, whose associated 
violations occurred on or after November 2, 2015.

Laura Galban,
Federal Register Liaison, Consumer Financial Protection Bureau.
[FR Doc. 2022-28442 Filed 12-30-22; 8:45 am]
BILLING CODE 4810-AM-P