[Federal Register Volume 61, Number 219 (Tuesday, November 12, 1996)]
[Rules and Regulations]
[Pages 57987-57993]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-28752]
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 308
Rules of Practice and Procedure; Civil Money Penalty Adjustments
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Final rule.
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SUMMARY: As required by the Debt Collection Improvement Act of 1996
(DCIA), the Federal Deposit Insurance Corporation (FDIC) is adopting a
final regulation that adjusts each civil money penalty (CMP) under its
jurisdiction by the rate of inflation using the formula prescribed by
the DCIA. That statute requires all federal agencies to adjust each CMP
by the rate of inflation and adopt implementing regulations within 180
days after enactment of the DCIA, and at least once every four years
thereafter. Any increase in a CMP shall apply only to violations that
occur after the effective date of this regulation.
EFFECTIVE DATE: November 12, 1996.
FOR FURTHER INFORMATION CONTACT: Andrea Winkler, Counsel, (202) 736-
0762, Federal Deposit Insurance Corporation, 550 17th Street, N.W.,
Washington, D.C. 20429.
SUPPLEMENTARY INFORMATION:
I. Background
The DCIA amended section 4 of the Federal Civil Penalties Inflation
Adjustment Act of 1990 (Inflation Adjustment Act) (28 U.S.C. 2461
note), to require the head of each Federal agency to enact regulations
within 180 days of the enactment of the DCIA and at least once every
four years thereafter, that adjust each CMP provided by law within the
jurisdiction of the agency (with the exception of certain specifically
listed statutes) by the inflation adjustment formula set forth in
section 5(b) of the Inflation Adjustment Act. The Inflation Adjustment
Act requires that each CMP amount be increased by the ``cost of
living'' adjustment, which is defined as the percentage by which the
Consumer Price Index (CPI) \1\ for the month of June of the calendar
year preceding the adjustment exceeds the CPI for the month of June of
the calendar year in which the amount of the CMP was last set or
adjusted pursuant to law. Any increase is to be rounded to the nearest
multiple of $10 in the case of penalties less than or equal to $100;
multiple of $100 in the case of penalties greater than $100 but less
than or equal to $1,000; multiple of $1,000 in the case of penalties
greater than $1,000 but less than or equal to $10,000; multiple of
$5,000 in the case of penalties greater than $10,000 but less than or
equal to $100,000; multiple of $10,000 in the
[[Page 57988]]
case of penalties greater than $100,000 but less than or equal to
$200,000; and multiple of $25,000 in the case of penalties greater than
$200,000. Under the DCIA, the first adjustment may not exceed ten
percent of the current penalty amount. Any increase in penalty amounts
under the DCIA shall apply only to violations which occur after the
effective date of the increase.
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\1\ The CPI is compiled by the Bureau of Statistics of the
Department of Labor.
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To satisfy the requirements of the DCIA, the FDIC is amending those
sections of part 308 of its regulations pertaining to its Rules of
Practice and Procedure which address CMP's. The amount of each CMP
which the FDIC has jurisdiction to impose has been increased according
to the prescribed formula.
II. Section-by-Section Summary
Authority Citation
The authority citation for part 308 has been amended to include a
reference to the statutes pursuant to which the FDIC assesses CMP's, to
the Inflation Adjustment Act and to the DCIA.
Section 308.116(b)
Section 308.116(b) pertains to the amount of any CMP that may be
assessed for violations of the Change in Bank Control Act of 1978 (12
U.S.C. 1817(j). This section has been amended by adding a new paragraph
(4) entitled Adjustment of civil money penalties by the rate of
inflation pursuant to section 31001(s) of the Debt Collection
Improvement Act. The amendment reflects the increased penalty amounts
required by the DCIA for violations occurring after the effective date
of this regulation. The amendment provides that Tier One penalties will
increase from a maximum of $5,000 for each day the violation continues
to a maximum of $5,500 for each day the violation continues; Tier Two
penalties will increase from a maximum of 25,000 per day for each day
the violation, practice or breach continues to a maximum of $27,500 for
each day the violation, practice or breach continues; and Tier Three
penalties will increase, in the case of a person other than a
depository institution, from a maximum of $1,000,000 per day for each
day the violation, practice or breach continues to a maximum of
$1,100,000 per day for each day the violation, practice or breach
continues, or in the case of a depository institution, from an amount
not to exceed the lesser of $1,000,000 or one percent of the total
assets of such institution for each day the violation, practice or
breach continues to an amount not to exceed the lesser of $1,100,000 or
one percent of the total assets of such institution for each day the
violation, practice or breach continues.
Section 308.132
Section 308.132 pertains to the manner in which the FDIC assesses
CMP's. Paragraph (c)(2) of that section pertains to the CMP's imposed
pursuant to section 7(a) of the FDIA (12 U.S.C. 1817(a)) for the late
filing of a bank's Reports of Condition and Income (Call Reports) or
for the submission of false or misleading Call Reports or information.
Paragraph (c)(2)(ii) has been amended to reflect the increase in the
Tier Two penalty amount from a maximum of $20,000 per day for each day
the failure to file a Call Report continues to a maximum of $22,000 per
day for each day the failure to file continues.
Paragraph (c)(2)(iii) pertains to penalties for the submission of
false or misleading Call Reports or information. Paragraph
(c)(2)(iii)(B) of that section has been amended to reflect the increase
in Tier Two penalty amounts from a maximum of $20,000 per day for each
day the information is not corrected to a maximum of $22,000 per day
for each day the information is not corrected. Paragraph (c)(2)(iii)(C)
of that section reflects the increase in Tier Three penalties from an
amount not to exceed the lesser of $1,000,000 or one percent of the
total assets of the institution for each day the information is not
corrected to an amount not to exceed the lesser of $1,100,000 or one
percent of the total assets of such institution for each day the
information is not corrected. No change has been made to Tier One
penalty amounts by the DCIA.
A new paragraph (c)(3), entitled Adjustment of civil money
penalties by the rate of inflation pursuant to section 31001(s) of the
Debt Collection Act has been added to reflect the increase in CMP
amounts for violations which occur after the effective date of this
regulation, pursuant to the various statutes for which the FDIC has
jurisdiction.
Paragraph (c)(3)(i) sets forth the increases for CMP's assessed
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)). A Tier
One CMP which may be assessed pursuant to section 8(i)(2)(A) of the
FDIA (12 U.S.C. 1818(i)(2)(A)) will increase from an amount not to
exceed $5,000 for each day the violation continues to an amount not to
exceed $5,500 for each day during which the violation continues. A Tier
Two CMP which may be assessed pursuant to section 8(i)(2)(B) of the
FDIA (12 U.S.C. 1818(i)(2)(B)) will increase from an amount not to
exceed $25,000 for each day during which the violation, practice or
breach continues to an amount not to exceed $27,500 for each day during
which the violation, practice or breach continues. A Tier Three CMP
which may be assessed pursuant to section 8(i)(2)(C)(12 U.S.C.
1818(i)(2)(C)) will increase from an amount not to exceed, in the case
of any person other than an insured depository institution $1,000,000
or, in the case of any insured depository institution, an amount not to
exceed the lesser of $1,000,000 or 1 percent of the total assets of
such institution for each day during which the violation, practice, or
breach continues to an amount not to exceed, in the case of any person
other than an insured depository institution $1,100,000 or, in the case
of any insured depository institution, an amount not to exceed the
lesser of $1,100,000 or 1 percent of the total assets of such
institution for each day during which the violation, practice, or
breach continues.
Paragraph (c)(3)(i)((A) of Sec. 308.132 lists a number of statutes
which provide jurisdiction to the FDIC to assess CMP's under section
8(i)(2) of the FDIA for violation thereof, including, the Home Mortgage
Disclosure Act (12 U.S.C. 2804 et seq. and 12 CFR 203.6), the Expedited
Funds Availability Act (12 U.S.C. 4001 et seq.), the Truth in Savings
Act (12 U.S.C. 4301 et seq.), the Real Estate Settlement Procedures Act
(12 U.S.C. 2601 et seq.) 12 CFR Part 3500), the Truth in Lending Act
(15 U.S.C. 1601 et seq.), the Fair Credit Reporting Act (15 U.S.C. 1681
et seq.), the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) the
Fair Debt Collection Practices Act (15 U.S.C. 1692 et seq.), the
Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.) and the Fair
Housing Act (42 U.S.C. 3601 et seq.). Increases in the amount of any
CMP which the FDIC may assess for violations of those statutes are the
same as the increases for section 8(i)(2) penalties.
Paragraph (c)(3)(ii) of Sec. 308.132 reflects the increases in CMP
amounts that may be assessed pursuant to section 7(c) of the FDIA for
late filing or the submission of false or misleading certified
statements. A Tier One CMP will continue to be assessed pursuant to
section 7(c)(4)(A) of the FDIA (12 U.S.C. 1817(c)(4)(A)) in an amount
not to exceed $2,000 for each day during which the failure to file
continues or the false or misleading information is not corrected. A
Tier Two CMP which may be assessed pursuant to section 7(c)(4)(B) of
the FDIA (12 U.S.C. 1817(c)(4)(B)) will increase from an amount not to
exceed $20,000 for each
[[Page 57989]]
day during which the failure to file continues or the false or
misleading information is not corrected to an amount not to exceed
$22,000 for each day during which the failure to file continues or the
false or misleading information is not corrected. A Tier Three CMP
which may be assessed pursuant to section 7(c)(4)(C) of the FDIA (12
U.S.C. 1817(c)(4)(B)) will increase from an amount not to exceed the
lesser of $1,000,000 or 1 percent of the total assets of the
institution for each day during which the failure to file continues or
the false or misleading information is not corrected to an amount not
to exceed the lesser of $1,100,000 or 1 percent of the total assets of
the institution for each day during which the failure to file continues
or the false or misleading information is not corrected.
Paragraph (c)(3)(iii) of Sec. 308.132 sets forth the increases in
CMP amounts that may be assessed pursuant to section 10(e)(4) of the
FDIA (12 U.S.C. 1820(e)(4)) for refusal to allow examination or to
provide required information during an examination. The CMP which may
be assessed pursuant to that statute against any affiliate of an
insured depository institution which refuses to permit a duly-appointed
examiner to conduct an examination or to provide information during the
course of an examination as set forth in section 20(b) of the FDIA (12
U.S.C. 1820(b)), will increase from an amount not to exceed $5,000 for
each day the refusal continues to an amount not to exceed $5,500 for
each day the refusal continues.
Paragraph (c)(3)(iv) of Sec. 308.132 sets forth the increases in
the amounts of any CMP that may be assessed pursuant to section
18(a)(3) of the FDIA (12 U.S.C. 1828(a)(3)) for the incorrect display
of the insurance logo. Such CMP will increase from an amount not to
exceed $100 for each day the violation continues to an amount not to
exceed $110 for each day the violation continues.
Paragraph (c)(3)(v) of Sec. 308.132 sets forth the increase in the
amount of any CMP that may be assessed pursuant to section 18(h) of the
FDIA (12 U.S.C. 1828(h)) for failure to file a certified statement or
to pay an assessment. That amount will increase from a maximum of $100
for each day the violation continues to an amount not to exceed $110
for each day the violation continues.
Paragraph (c)(3)(vi) of Sec. 308.132 sets forth the increase in any
CMP that may be assessed pursuant to section 19b(j) of the FDIA (12
U.S.C. 1829b(j)), against an insured depository institution and any
director, officer or employee thereof who wilfully or through gross
negligence violates or causes a violation of the recordkeeping
requirements of that section or its implementing regulations. The CMP
amount will increase from an amount not to exceed $10,000 per violation
for each day the violation continues to an amount not to exceed $11,000
per violation.
Paragraph (c)(3)(vii) of Sec. 308.132 sets forth the increase in
the civil fine which may be assessed pursuant to 12 U.S.C. 1832(c) for
violation of provisions forbidding interest-bearing demand deposit
accounts. The amount which may be assessed against any depository
institution which violates the prohibition on deposit or withdrawal
from interest-bearing accounts via negotiable or transferable
instruments payable to third parties will increase from a fine of
$1,000 per violation to a fine of $1,100 per violation.
Paragraph (c)(3)(viii) of Sec. 308.132 sets forth the increase in
any CMP that may be assessed pursuant to 12 U.S.C. 1884 for violations
of security measure requirements. The amount of CMP which may be
assessed against an institution which violates a rule establishing
minimum security requirements as set forth in 12 U.S.C. 1882, will
increase from a CMP not to exceed $100 for each day of the violation to
a CMP not to exceed $110 for each day of the violation.
Paragraph (c)(3)(ix) of Sec. 308.132 sets forth the increases in
the CMP amounts that may be assessed pursuant to the Bank Holding
Company Act of 1970 for prohibited tying arrangements. A Tier One CMP
which may be assessed pursuant to 12 U.S.C. 1972(2)(F)(i) will increase
from an amount not to exceed $5,000 for each day during which the
violation continues to an amount not to exceed $5,500 for each day
during which the violation continues. A Tier Two CMP which may be
assessed pursuant to 12 U.S.C. 1972(2)(F)(ii) will increase from an
amount not to exceed $25,000 for each day during which the violation,
practice or breach continues an amount not to exceed $27,500 for each
day during which the violation, practice or breach continues. A Tier
Three CMP which may be assessed pursuant to 12 U.S.C. 1972(2)(F)(iii)
will increase from an amount not to exceed, in the case of any person
other than an insured depository institution $1,000,000 for each day
during which the violation, practice, or breach continues to an amount
not to exceed $1,100,000 for each day during which the violation,
practice, or breach continues. In the case of any insured depository
institution, Tier Three penalties will increase from an amount not to
exceed the lesser of $1,000,000 or 1 percent of the total assets of
such institution for each day during which the violation, practice, or
breach continues to an amount not to exceed the lesser of $1,100,000 or
1 percent of the total assets of such institution for each day during
which the violation, practice, or breach continues.
Paragraph (c)(3)(x) of Sec. 308.132 indicates that pursuant to the
International Banking Act of 1978 (IBA) (12 U.S.C 3108(b)), a CMP may
be assessed for failure to comply with the requirements of the IBA
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)). Such
CMP will increase in the amounts set forth in paragraph (c)(3)(i) of
Sec. 308.132 which contains the increases for section 8(i)(2).
Paragraph (c)(3)(xi) of Sec. 308.132 sets forth the increase in CMP
that may be assessed pursuant to section 8(i)(2) of the FDIA (12 U.S.C.
1818(i)(2)), as made applicable by 12 U.S.C. 3349(b), where a financial
institution seeks, obtains, or gives any other thing of value in
exchange for the performance of an appraisal by a person that the
institution knows is not a state certified or licensed appraiser in
connection with a federally related transaction. Such CMP amounts will
increase in the amounts set forth in paragraph (c)(3)(i) of
Sec. 308.132 which contains the increases for section 8(i)(2).
Paragraph (c)(3)(xii) of Sec. 308.132 sets forth that pursuant to
the International Lending Supervision Act (ILSA) (12 U.S.C. 3909(d)),
the CMP that may be assessed against any banking institution or any
officer, director, employee, agent or other person participating in the
conduct of the affairs of such banking institution will increase from
an amount not to exceed $1,000 for each day a violation of the ILSA or
any rule, regulation or order issued pursuant to ILSA continues to an
amount not to exceed $1,100 for each day such violation continues.
Paragraph (c)(3)(xiii) of Sec. 308.132 indicates that pursuant to
the Community Development Banking and Financial Institution Act
(Community Development Banking Act) (12 U.S.C. 4717(b)) a CMP may be
assessed for violations of the Community Development Banking Act
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)). Such
CMP amounts will increase in the amounts set forth in paragraph
(c)(3)(i) of Sec. 308.132 which contains the increases for section
8(i)(2).
Paragraph (c)(3)(xiv) of Sec. 308.132 sets forth that pursuant to
section 21B of the Securities Exchange Act of 1934 (Exchange Act) (15
U.S.C. 78u-2), CMP's may be assessed for violations of
[[Page 57990]]
certain provisions of the Exchange Act, where such penalties are in the
public interest. The Tier One CMP amounts which may be assessed
pursuant to 15 U.S.C.78u-2(b)(1) will increase from an amount not to
exceed $5,000 for a natural person or $50,000 for any other person for
violations set forth in 15 U.S.C. 78u-2(a), to $5,500 for a natural
person or $55,000 for any other person. The Tier Two CMP which maybe
assessed pursuant to 15 U.S.C. 78u-2(b)(2)--for each violation set
forth in 15 U.S.C. 78u-2(a)--will increase from an amount not to exceed
$50,000 for a natural person or $250,000 for any other person if the
act or omission involved fraud, deceit, manipulation, or deliberate or
reckless disregard of a regulatory requirement, to an amount not to
exceed $55,000 for a natural person or $275,000 for any other person.
The Tier Three CMP which may be assessed pursuant to 15 U.S.C. 78u-
2(b)(3) for each violation set forth in 15 U.S.C. 78u-2(a), in an
amount not to exceed $100,000 for a natural person or $500,000 for any
other person, if the act or omission involved fraud, deceit,
manipulation, or deliberate or reckless disregard of a regulatory
requirement; and such act or omission directly or indirectly resulted
in substantial losses, or created a significant risk of substantial
losses to other persons or resulted in substantial pecuniary gain to
the person who committed the act or omission to an amount not to exceed
$110,000 for a natural person or $550,000 for any other person.
Paragraph (c)(3)(xv) of Sec. 308.132 sets forth that the CMP that
may be assessed pursuant to the Program Fraud Civil Remedies Act (31
U.S.C. 3802), will increase from an amount of not more than $5,000 per
day for violations involving false claims and statements to $5,500 per
day.
Paragraph (c)(3)(xvi) of Sec. 308.132 sets forth the CMP that may
be assessed pursuant to the Flood Disaster Protection Act (FDPA)(42
U.S.C. 4012a(f)) against any regulated lending institution that engages
in a pattern or practice of violations of the FDPA. The amount of the
penalty for each violation will remain at $350, however, the annual
amount which may be assessed will increase from an amount not to exceed
a total of $100,000 annually to an amount not to exceed a total of
$105,000 annually.
III. Regulatory Flexibility Act
Chapter 6 of Title 5 of the United States Code which pertains to
``The Analysis of Regulatory Functions'' does not apply to the final
rule regarding part 308. The revision to part 308 is not a ``rule'' for
purposes of that statute (see 5 U.S.C. 601(2)) as it is not a rule for
which the FDIC is required to publish a general notice of proposed
rulemaking under section 553(b) of Title 5 of the United States Code.
This is because the law leaves the FDIC no discretion with regard to
the requirement of adjustment or the formula for the amount of CMP
adjustments to be made, the changes are ministerial, technical and
noncontroversial and the law requires that the regulation implementing
the adjustments be made within 180 days of the enactment of the DCIA.
Therefore, the FDIC has determined for good cause that public notice
and comment are unnecessary, impracticable, or contrary to the public
interest and that the rule should be published in final form.
IV. Small Business Regulatory Enforcement Fairness Act
The Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA) (Public Law 104-121) provides generally for agencies to report
rules to Congress and for Congress to review the rules. The reporting
requirement is triggered in instances where the FDIC issues a final
rule as defined by the Administrative Procedure Act (APA) at 5 U.S.C.
551. Because the FDIC is issuing a final rule as defined by the APA,
the FDIC will file the reports required by SBREFA.
The Office of Management and Budget has determined that this final
revision to part 308 does not constitute a ``major'' rule as defined by
the statute.
V. Exemption From Public Notice and Comment
Because the law requires the FDIC to amend its rules, provides the
specific adjustments to be made and leaves the FDIC no discretion in
calculating the amount of those adjustments, the changes are
ministerial, technical and noncontroversial, and the law requires that
the regulation implementing the adjustments be published in the Federal
Register within 180 days of enactment of the DCIA, the FDIC has
determined for good cause that public notice and comment is unnecessary
and impracticable under the APA (5 U.S.C. 553(b)(3)(B)), and that the
rule should be published in final form.
VI. Effective Date
For the same reasons that the FDIC for good cause has determined
that public notice and comment is unnecessary, impractical and contrary
to the public interest, the FDIC finds that it has good cause to adopt
an effective date that is less than 30 days after the date of
publication in the Federal Register pursuant to the APA (5 U.S.C.
553(d)), and therefore, the regulation is effective upon publication.
List of Subjects in 12 CFR Part 308
Administrative practice and procedure, Banks, banking, Claims,
Crime, Equal access to justice, Ex parte communications, Hearing
procedure, Lawyers, Penalties, State nonmember banks.
For the reasons set out in the preamble, part 308 of chapter III of
title 12 of the Code of Federal Regulations is amended as set forth
below:
PART 308--RULES OF PRACTICE AND PROCEDURE
1. The authority citation for part 308 is revised to read as
follows:
Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505,
1817, 1818, 1820, 1828, 1829, 1829b, 1831o, 1832(c), 1884(b), 1972,
3102, 3108(a), 3349, 3909, 4717; 15 U.S.C. 78 (h) and (i), 78o-4(c),
78o-5, 78q-1, 78s, 78u, 78u-2, 78u-3, and 78w; 28 U.S.C. 2461 note;
31 U.S.C. 330, 5321; 42 U.S.C. 4012a; sec. 31001(s), Pub. L. 104-
134, 110 Stat. 1321-358.
2. Section 308.116 is amended by adding a new paragraph (b)(4) to
read as follows:
Sec. 308.116 Assessment of penalties.
* * * * *
(b) * * *
(4) Adjustment of civil money penalties by the rate of inflation
pursuant to section 31001(s) of the Debt Collection Improvement Act.
After November 12, 1996:
(i) Any person who engages in a violation as set forth in paragraph
(b)(1) of this section shall forfeit and pay a civil money penalty of
not more than $5,500 for each day the violation continues.
(ii) Any person who engages in a violation, unsafe or unsound
practice or breach of fiduciary duty, as set forth in paragraph (b)(2)
of this section, shall forfeit and pay a civil money penalty of not
more than $27,500 for each day such violation, practice or breach
continues.
(iii) Any person who knowingly engages in a violation, unsafe or
unsound practice or breach of fiduciary duty, as set forth in paragraph
(b)(3) of this section, shall forfeit and pay a civil money penalty not
to exceed:
(A) In the case of a person other than a depository institution--
$1,100,000 per day for each day the violation, practice or breach
continues; or
(B) In the case of a depository institution--an amount not to
exceed the lesser of $1,100,000 or one percent of the total assets of
such institution for
[[Page 57991]]
each day the violation, practice or breach continues.
* * * * *
3. In Sec. 308.132, paragraph (c)(2) is revised and a new paragraph
(c)(3) is added to read as follows:
Sec. 308.132 Assessment of penalties.
* * * * *
(c) * * *
(2) The Board of Directors or its designee may assess civil money
penalties pursuant to section 7(a) of the FDIA (12 U.S.C. 1817(a)) as
follows:
(i) Late filing--Tier One penalties. In cases in which a bank fails
to make or publish its Report of Condition and Income (Call Report)
within the appropriate time periods, a civil money penalty of not more
than $2,000 per day may be assessed where the bank maintains procedures
in place reasonably adapted to avoid inadvertent error and the late
filing occurred unintentionally and as a result of such error; or the
bank inadvertently transmitted a Call Report which is minimally late.
(A) First offense. Generally, in such cases, the amount assessed
shall be $300 per day for each of the first 15 days for which the
failure continues, and $600 per day for each subsequent day the failure
continues, beginning on the sixteenth day. For banks with less than
$25,000,000 in assets, the amount assessed shall be the greater of $100
per day or \1/1000\th of the bank's total assets (\1/10\th of a basis
point) for each of the first 15 days for which the failure continues,
and $200 or \1/500\th of the bank's total assets, \1/5\ of a basis
point) for each subsequent day the failure continues, beginning on the
sixteenth day.
(B) Second offense. Where the bank has been delinquent in making or
publishing its Call Report within the preceding five quarters, the
amount assessed for the most current failure shall generally be $500
per day for each of the first 15 days for which the failure continues,
and $1,000 per day for each subsequent day the failure continues,
beginning on the sixteenth day. For banks with less than $25,000,000 in
assets, those amounts, respectively, shall be \1/500\th of the bank's
total assets and \1/250\th of the bank's total assets.
(C) Mitigating factors. The amounts set forth in paragraph
(c)(2)(i)(A) of this section may be reduced based upon the factors set
forth in paragraph (b) of this section.
(D) Lengthy or repeated violations. The amounts set forth in this
paragraph (c)(2)(i) will be assessed on a case-by-case basis where the
amount of time of the bank's delinquency is lengthy or the bank has
been delinquent repeatedly in making or publishing its Call Reports.
(E) Waiver. Absent extraordinary circumstances outside the control
of the bank, penalties assessed for late filing shall not be waived.
(ii) Late filing--Tier Two penalties. Where a bank fails to make or
publish its Call Report within the appropriate time period, the Board
of Directors or its designee may assess a civil money penalty of not
more than $20,000 per day for each day the failure continues. Pursuant
to the Debt Collection Improvement Act of 1996, for violations which
occur after November 12, 1996, the maximum Tier Two penalty amount will
increase to $22,000 per day for each day the failure continues.
(iii) False or misleading reports or information--(A) Tier One
penalties. In cases in which a bank submits or publishes any false or
misleading Call Report or information, the Board of Directors or its
designee may assess a civil money penalty of not more than $2,000 per
day for each day the information is not corrected, where the bank
maintains procedures in place reasonably adapted to avoid inadvertent
error and the violation occurred unintentionally and as a result of
such error; or the bank inadvertently transmits a Call Report or
information which is false or misleading.
(B) Tier Two penalties. Where a bank submits or publishes any false
or misleading Call Report or other information, the Board of Directors
or its designee may assess a civil money penalty of not more than
$20,000 per day for each day the information is not corrected. Pursuant
to the Debt Collection Improvement Act of 1996, for violations which
occur after November 12, 1996, the maximum Tier Two penalty amount will
increase to $22,000 per day for each day the information is not
corrected.
(C) Tier Three penalties. Where a bank knowingly or with reckless
disregard for the accuracy of any Call Report or information submits or
publishes any false or misleading Call Report or other information, the
Board of Directors or its designee may assess a civil money penalty of
not more than the lesser of $1,000,000 or 1 percent of the bank's total
assets per day for each day the information is not corrected. Pursuant
to the Debt Collection Improvement Act of 1996, for violations which
occur after November 12, 1996, the maximum Tier Three penalty amount
will increase to the lesser of $1,100,000 per day or 1 percent of the
bank's total assets per day for each day the information is not
corrected.
(D) Mitigating factors. The amounts set forth in this paragraph
(c)(2) may be reduced based upon the factors set forth in paragraph (b)
of this section.
(3) Adjustment of civil money penalties by the rate of inflation
pursuant to section 31001(s) of the Debt Collection Act. Pursuant to
section 31001(s) of the Debt Collection Act, for violations which occur
after November 12, 1996, the Board of Directors or its designee may
assess civil money penalties in the maximum amounts as follows:
(i) Civil money penalties assessed pursuant to section 8(i)(2) of
the FDIA. Tier One civil money penalties may be assessed pursuant to
section 8(i)(2)(A) of the FDIA (12 U.S.C. 1818(i)(2)(A)) in an amount
not to exceed $5,500 for each day during which the violation continues.
Tier Two civil money penalties may be assessed pursuant to section
8(i)(2)(B) of the FDIA (12 U.S.C. 1818(i)(2)(B)) in an amount not to
exceed $27,500 for each day during which the violation, practice or
breach continues. Tier Three civil money penalties may be assessed
pursuant to section 8(i)(2)(C)(12 U.S.C. 1818(i)(2)(C)) in an amount
not to exceed, in the case of any person other than an insured
depository institution $1,100,000 or, in the case of any insured
depository institution, an amount not to exceed the lesser of
$1,100,000 or 1 percent of the total assets of such institution for
each day during which the violation, practice, or breach continues.
(A) Civil money penalties may be assessed pursuant to section
8(i)(2) of the FDIA in the amounts set forth in this paragraph
(c)(3)(i) for violations of various consumer laws, including, the Home
Mortgage Disclosure Act (12 U.S.C. 2804 et seq. and 12 CFR 203.6), the
Expedited Funds Availability Act (12 U.S.C. 4001 et seq.), the Truth in
Savings Act (12 U.S.C. 4301 et seq.), the Real Estate Settlement
Procedures Act (12 U.S.C. 2601 et seq. and 12 CFR part 3500), the Truth
in Lending Act (15 U.S.C. 1601 et seq.), the Fair Credit Reporting Act
(15 U.S.C. 1681 et seq.), the Equal Credit Opportunity Act (15 U.S.C.
1691 et seq.) the Fair Debt Collection Practices Act (15 U.S.C. 1692 et
seq.), the Electronic Funds Transfer Act (15 U.S.C. 1693 et seq.) and
the Fair Housing Act (42 U.S.C. 3601 et seq.) in the amounts set forth
in paragraphs (c)(3)(i) through (c)(3)(iii) of this section.
(ii) Civil money penalties assessed pursuant to section 7(c) of the
FDIA for late filing or the submission false or misleading certified
statements. Tier One civil money penalties may be assessed pursuant to
section 7(c)(4)(A) of the FDIA (12 U.S.C. 1817(c)(4)(A)) in
[[Page 57992]]
an amount not to exceed $2,000 for each day during which the failure to
file continues or the false or misleading information is not corrected.
Tier Two civil money penalties may be assessed pursuant to section
7(c)(4)(B) of the FDIA (12 U.S.C. 1817(c)(4)(B)) in an amount not to
exceed $22,000 for each day during which the failure to file continues
or the false or misleading information is not corrected. Tier Three
civil money penalties may be assessed pursuant to section 7(c)(4)(C) in
an amount not to exceed the lesser of $1,100,000 or 1 percent of the
total assets of the institution for each day during which the failure
to file continues or the false or misleading information is not
corrected.
(iii) Civil money penalties assessed pursuant to section 10(e)(4)
of the FDIA for refusal to allow examination or to provide required
information during an examination. Pursuant to section 10(e)(4) of the
FDIA (12 U.S.C. 1820(e)(4)), civil money penalties may be assessed
against any affiliate of an insured depository institution which
refuses to permit a duly-appointed examiner to conduct an examination
or to provide information during the course of an examination as set
forth in section 20(b) of the FDIA (12 U.S.C. 1820(b)), in an amount
not to exceed $5,500 for each day the refusal continues.
(iv) Civil money penalties assessed pursuant to section 18(a)(3) of
the FDIA for incorrect display of insurance logo. Pursuant to section
18(a)(3) of the FDIA (12 U.S.C. 1828(a)(3)), civil money penalties may
be assessed against an insured depository institution which fails to
correctly display its insurance logo pursuant to that section, in an
amount not to exceed $110 for each day the violation continues.
(v) Civil money penalties assessed pursuant to section 18(h) of the
FDIA for failure to file a certified statement or to pay assessment.
Pursuant to section 18(h) of the FDIA (12 U.S.C. 1828(h)), a civil
money penalty may be assessed against an insured depository institution
which wilfully fails or refuses to file a certified statement or pay
any assessment required under the FDIA in an amount not to exceed $110
for each day the violation continues.
(vi) Civil money penalties assessed pursuant to section 19b(j) of
the FDIA for recordkeeping violations. Pursuant to section 19b(j) of
the FDIA (12 U.S.C. 1829b(j)), civil money penalties may be assessed
against an insured depository institution and any director, officer or
employee thereof who wilfully or through gross negligence violates or
causes a violation of the recordkeeping requirements of that section or
its implementing regulations in an amount not to exceed $11,000 per
violation.
(vii) Civil fine pursuant to 12 U.S.C. 1832(c) for violation of
provisions forbidding interest-bearing demand deposit accounts.
Pursuant to 12 U.S.C. 1832(c), any depository institution which
violates the prohibition on deposit or withdrawal from interest-bearing
accounts via negotiable or transferable instruments payable to third
parties shall be subject to a fine of $1,100 per violation.
(viii) Civil penalties for violations of security measure
requirements under 12 U.S.C. 1884. Pursuant to 12 U.S.C. 1884, an
institution which violates a rule establishing minimum security
requirements as set forth in 12 U.S.C. 1882, shall be subject to a
civil penalty not to exceed $110 for each day of the violation.
(ix) Civil money penalties assessed pursuant to the Bank Holding
Company Act of 1970 for prohibited tying arrangements. Pursuant to the
Bank Holding Company Act of 1970, Tier One civil money penalties may be
assessed pursuant to 12 U.S.C. 1972(2)(F)(i) in an amount not to exceed
$5,500 for each day during which the violation continues. Tier Two
civil money penalties may be assessed pursuant to 12 U.S.C.
1972(2)(F)(ii) in an amount not to exceed $27,500 for each day during
which the violation, practice or breach continues. Tier Three civil
money penalties may be assessed pursuant to 12 U.S.C. 1972(2)(F)(iii)
in an amount not to exceed, in the case of any person other than an
insured depository institution $1,100,000 for each day during which the
violation, practice, or breach continues or, in the case of any insured
depository institution, an amount not to exceed the lesser of
$1,100,000 or 1 percent of the total assets of such institution for
each day during which the violation, practice, or breach continues.
(x) Civil money penalties assessed pursuant to the International
Banking Act of 1978. Pursuant to the International Banking Act of 1978
(IBA) (12 U.S.C. 3108(b)), civil money penalties may be assessed for
failure to comply with the requirements of the IBA pursuant to section
8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)), in the amounts set forth in
paragraph (c)(3)(i) of this section.
(xi) Civil money penalties assessed for appraisal violations.
Pursuant to 12 U.S.C. 3349(b), where a financial institution seeks,
obtains, or gives any other thing of value in exchange for the
performance of an appraisal by a person that the institution knows is
not a state certified or licensed appraiser in connection with a
federally related transaction, a civil money penalty may be assessed
pursuant to section 8(i)(2) of the FDIA (12 U.S.C. 1818(i)(2)) in the
amounts set forth in paragraph (c)(3)(i) of this section.
(xii) Civil money penalties assessed pursuant to International
Lending Supervision Act. Pursuant to the International Lending
Supervision Act (ILSA) (12 U.S.C. 3909(d)), the CMP that may be
assessed against any banking institution or any officer, director,
employee, agent or other person participating in the conduct of the
affairs of such banking institution is amount not to exceed $1,100 for
each day a violation of the ILSA or any rule, regulation or order
issued pursuant to ILSA continues.
(xiii) Civil money penalties assessed for violations of the
Community Development Banking and Financial Institution Act. Pursuant
to the Community Development Banking and Financial Institution Act
(Community Development Banking Act) (12 U.S.C. 4717(b)) a civil money
penalty may be assessed for violations of the Community Development
Banking Act pursuant to section 8(i)(2) of the FDIA (12 U.S.C.
1818(i)(2)), in the amounts set forth in paragraph (c)(3)(i) of this
section.
(xiv) Civil money penalties assessed for violations of the
Securities Exchange Act of 1934. Pursuant to section 21B of the
Securities Exchange Act of 1934 (Exchange Act) (15 U.S.C. 78u-2), civil
money penalties may be assessed for violations of certain provisions of
the Exchange Act, where such penalties are in the public interest. Tier
One civil money penalties may be assessed pursuant to 15 U.S.C. 78u-
2(b)(1) in an amount not to exceed $5,500 for a natural person or
$55,000 for any other person for violations set forth in 15 U.S.C. 78u-
2(a). Tier Two civil money penalties may be assessed pursuant to 15
U.S.C. 78u-2(b)(2) in an amount not to exceed--for each violation set
forth in 15 U.S.C. 78u-2(a)--$55,000 for a natural person or $275,000
for any other person if the act or omission involved fraud, deceit,
manipulation, or deliberate or reckless disregard of a regulatory
requirement. Tier Three civil money penalties may be assessed pursuant
to 15 U.S.C. 78u-2(b)(3) for each violation set forth in 15 U.S.C. 78u-
2(a), in an amount not to exceed $110,000 for a natural person or
$550,000 for any other person, if the act or omission involved fraud,
deceit, manipulation, or deliberate or reckless disregard of a
regulatory requirement; and such act or omission directly or
[[Page 57993]]
indirectly resulted in substantial losses, or created a significant
risk of substantial losses to other persons or resulted in substantial
pecuniary gain to the person who committed the act or omission.
(xv) Civil money penalties assessed for false claims and statements
pursuant to the Program Fraud Civil Remedies Act. Pursuant to the
Program Fraud Civil Remedies Act (31 U.S.C. 3802), civil money
penalties of not more than $5,500 per day may be assessed for
violations involving false claims and statements.
(xvi) Civil money penalties assessed for violations of the Flood
Disaster Protection Act. Pursuant to the Flood Disaster Protection Act
(FDPA)(42 U.S.C. 4012a(f)), civil money penalties may be assessed
against any regulated lending institution that engages in a pattern or
practice of violations of the FDPA in an amount not to exceed $350 per
violation, and not to exceed a total of $105,000 annually.
By order of the Board of Directors.
Dated at Washington, D.C. this 29th day of October, 1996.
Federal Deposit Insurance Corporation.
Jerry L. Langley,
Executive Secretary.
[FR Doc. 96-28752 Filed 11-8-96; 8:45 am]
BILLING CODE 6714-01-P
