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From Banking and Finance Law Daily, August 2, 2018

FDIC proposes changes to civil money penalty regulatory language

By Nicole D. Prysby, J.D.

The Federal Deposit Insurance Corporation (FDIC) has issued a notice of proposed rulemaking regarding changes to the presentation of maximum civil money penalty (CMP) amounts in its Rules of Practice and Procedure (12 CFR Part 308). The proposed changes would remove duplicative regulatory language, codify a recent change by Congress to CMP inflation adjustments, and clarify where readers should look for information regarding the maximum CMP amounts that can be assessed after inflation adjustments. Based on the scheduled publishing date in the Federal Register, public comments on the proposal are due by Oct. 2, 2018.

CMPs are imposed under the Federal Deposit Insurance Act and numerous other statutes. In 2015, Congress specified that federal agencies are required to make annual adjustments to maximum CMP amounts to account for inflation, by January 15 of each year. Per guidance from the Office of Management and Budget (OMB), agencies may remove specific penalty amounts from their regulations and instead codify the statutory formula for inflation adjustments. In any case, agencies must still calculate and publish penalty adjustments in the Federal Register annually.

The proposed changes would:

  • remove the descriptive regulatory language related to maximum CMP amounts that duplicates statutory language (12 C.F.R. §§ 308.116(b) and 308.132(d));
  • codify the statutory formula for inflation adjustments to the maximum CMP amounts (12 C.F.R. §§ 308.502(a)(6) and (b)(4) and 12 C.F.R. §308.530(d)); and
  • direct readers to a table published annually in the Federal Register, containing the inflation-adjusted maximum CMP amounts (12 C.F.R. § 308.132(e)).

These proposed changes would be consistent with the OMB Guidance and the practices of other agencies. The FDIC does propose to retain some language concerning violations of the Change in Bank Control Act and the late filing of Call Reports (12 C.F.R. §§ 308.116(a), (c), and (d) and §§ 308.132(d)(1) and (d)(3)).

The proposed rulemaking states that the changes are ministerial and do not impose any new or additional reporting or disclosure requirements.

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