Rule2022-28442
Civil Penalty Inflation Adjustments
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
January 3, 2023
Effective
January 15, 2023
Issuing agencies
Consumer Financial Protection Bureau
Abstract
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.
Full Text
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<title>Federal Register, Volume 88 Issue 1 (Tuesday, January 3, 2023)</title>
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[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 [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-28442]
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Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
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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 <a href="/cdn-cgi/l/email-protection#a8ebeef8eaf7e9cbcbcddbdbc1cac1c4c1dcd1e8cbced8ca86cfc7de"><span class="__cf_email__" data-cfemail="75363325372a3416161006061c171c191c010c35161305175b121a03">[email protected]</span></a>.
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 <a href="https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.pdf">https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.pdf</a>.
\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 <a href="https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.pdf">https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.pdf</a>.
\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]]
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Penalty
amounts OMB ``cost-of- New
Law Penalty description established living penalty
under 2021 adjustment'' amount
final rule multiplier
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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 <a href="https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.pdf">https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.pdf</a>.
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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 <a href="https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.pdf">https://www.whitehouse.gov/wp-content/uploads/2022/12/M-23-05-CMP-CMP-Guidance.pdf</a>.
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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)
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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
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