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FDIC Federal Register Citations

[Federal Register: October 18, 2004 (Volume 69, Number 200)]
[Rules and Regulations]
[Page 61301-61305]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18oc04-1]

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Rules and Regulations
Federal Register
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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.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
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[[Page 61301]]

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 308

RIN 3064-AC76


Rules of Practice and Procedure

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Final rule; correction.

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SUMMARY: The Federal Civil Monetary Penalties Inflation Adjustment Act
of 1990, as amended, requires all Federal agencies with statutory
authority to impose civil money penalties (CMPs) to evaluate and adjust
those CMPs every four years. The Federal Deposit Insurance Corporation
((FDIC) last adjusted the maximum amounts of CMPs under its
jurisdiction in 2000. The FDIC is issuing this final rule to implement
the required adjustments to its CMPs. The FDIC is also correcting a
technical error as to one CMP that occurred when the FDIC last adjusted
CMPs in 2000.

DATES: This rule is effective on December 31, 2004.

FOR FURTHER INFORMATION CONTACT: Philip P. Houle, Counsel, (202) 898-
3722, Enforcement Unit, Legal Division, 550 17th Street, NW.,
Washington, DC 20429.

SUPPLEMENTARY INFORMATION

I. Background

The Debt Collection Improvement Act of 1996 (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, to
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.
To satisfy the requirements of the DCIA, the FDIC is amending 12
CFR 308 of its regulations pertaining to its Rules of Practice and
Procedure which address CMPs. The amount of each CMP which the FDIC has
jurisdiction to impose has been increased according to the prescribed
formula. The penalties were last adjusted in 2000 (65 FR 64887). Any
increase in penalty amounts under the DCIA shall apply only to
violations which occur after the effective date of the increase.
The FDIC is also implementing a technical correction of the maximum
amount of tier three CMPs that may be assessed for violation of 12
U.S.C. 1817(c) involving the submission of certified statements to the
FDIC for determining institutions' semiannual deposit insurance
assessments. Although the FDIC had stated in the preamble to the 2000
final rule that the CMP was to be adjusted from $1,100,000 to
$1,175,000, the CMP was not actually adjusted due to a technical error
in the publication of the final rule (65 FR 64887). Under their own
rulemaking, other Federal banking agencies did successfully adjust this
CMP from $1,100,000 to $1,175,000 in 2000.
If the $1,100,000 CMP were now adjusted using the 17.2% CPI figure
for the June 1996 to June 2003 period (as with those CMPs that were
last adjusted to a higher amount in 1996), this CMP's maximum amount
would be increased to $1,300,000 rather than to the lower $1,250,000
amount that is actually adopted in this final rule and correction. In
the interests of fairness to respondents and consistency with other
Federal banking agencies, the FDIC is making a technical correction
that increases the $1,100,000 CMP to $1,175,000 for the June 1996 to
June 1999 period and also adjusts the corrected CMP from $1,175,000 to
$1,250,000 for the June 2000 to June 2003 period.
The correction and the adjustments are being made simultaneously
and prospectively. This rulemaking shall become a final rule on
publication in the Federal Register and shall be effective as of
December 31, 2004.

Summary of Calculation

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-U)\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: (A) $10 in the case of penalties
less than or equal to $100; (B) $100 in the case of penalties greater
than $100 but less than or equal to $1,000; (C) $1,000 in the case of
penalties greater than $1,000 but less than or equal to $10,000; (D)
$5,000 in the case of penalties greater than $10,000 but less than or
equal to $100,000; (E) $10,000 in the case of penalties greater than
$100,000 but less than or equal to $200,000; and (F) $25,000 in the
case of penalties greater than $200,000.
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\1\ The CPI-U is compiled by the Bureau of Statistics of the
Department of Labor. To calculate the adjustment, the FDIC used the
Department of Labor, Bureau of Labor Statistics B All Urban
Consumers tables to arrive at the CPI-U value.
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Under the DCIA, the first adjustment may not exceed ten percent of
the current penalty amount.\2\
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\2\ For penalties that were increased in 1996 but were not
increased at the last quadrennial adjustment in 2000, the relevant
computation is the CPI-U for June 1996 (156.7) and the CPI-U for
June 2003, which produces a 17.2% adjustment. If a penalty has never
previously been adjusted (as is the case with the single-violation
penalty under 42 U.S.C. 4012a(f)), the maximum increase for a first-
time adjustment is 10% under 28 U.S.C 2461 note, rather than the
24.1% increase in the CPI-U for the intervening period.
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Example

The following example explains the inflation adjustment calculation
for CMP amounts that were last adjusted in 2000. Under 12 U.S.C.
1818(i), as adjusted at 12 CFR 308.132(c), the FDIC may impose a daily
maximum Tier Three CMP not to exceed $1,175,000 for violating certain
laws.
First, the appropriate CPI-U is determined. The statute requires
the FDIC to use the CPI-U for June of the calendar year preceding the
year of adjustment. Since the FDIC is adjusting the CMP in 2004, the
CPI-U for June 2003, which was 183.7, is used. The statute also
requires the FDIC to use the CPI-U for June of the year that the CMP

[[Page 61302]]

was last set by law or adjusted for inflation. Because the FDIC last
adjusted the CMP in 2000, the CPI-U for June 2000, which was 172.4, is
used.
Next, the cost of living adjustment or inflation factor is then
calculated by dividing the CPI-U for June 2003 (183.7) by the CPI-U for
June 2000 (172.4). The result is 1.066 (i.e., a 6.6 percent increase).
Third, the raw inflation adjustment is calculated by multiplying
the maximum CMP amount by the percentage increase. In this example,
$1,175,000 is multiplied by 6.6 percent, which equals $77,550.
Fourth, the raw inflation adjusted amount is rounded according to
the rounding rules in section 5(a) of the Inflation Adjustment Act.
Under the rounding rules, if the penalty is greater than $200,000, the
increase is rounded to the nearest multiple of $25,000. Therefore, the
maximum penalty increase in this example is $75,000 (i.e., $77,500
rounded to the nearest multiple of $25,000).
Fifth, the rounded increase is added to the current maximum CMP
amount that is being adjusted. In this example, $1,175,000 plus $75,000
yields a new maximum inflation adjusted CMP amount of $1,250,000.

Summary of Adjustments

Under the Federal Civil Penalties Inflation Adjustment Act of 1990
(28 U.S.C. 2461 note), the FDIC must adjust for inflation the civil
monetary penalties in statutes under which it has authority to assess
penalties. The following chart displays the adjusted civil money
penalty amounts for the enumerated statutes. The amounts in this chart
apply to violations that occur after December 31, 2004:

------------------------------------------------------------------------
Current maximum
U.S. Code Citation amount New maximum amount
------------------------------------------------------------------------
12 U.S.C. 1817(a)
Tier One CMP............ 2,200 2,200
Tier Two CMP............ 22,000 27,000
Tier Three CMP.......... 1,175,000 1,250,000
12 U.S.C. 1817(c)
Tier One CMP............ 2,200 2,200
Tier Two CMP............ 22,000 27,000
Tier Three CMP.......... \3\ 1,175,000 1,250,000
12 U.S.C. 1817(j)
Tier One CMP............ 5,500 6,500
Tier Two CMP............ 27,500 32,500
Tier Three CMP.......... 1,175,000 1,250,000
12 U.S.C. 1818(i)(2)
Tier One CMP............ 5,500 6,500
Tier Two CMP............ 27,500 32,500
Tier Three CMP.......... 1,175,000 1,250,000
12 U.S.C. 1820(e)(4)........ 5,500 6,500
12 U.S.C. 1828(a)(3)........ 110 110
12 U.S.C. 1828(h)........... 110 110
12 U.S.C. 1829b(j).......... 11,000 11,000
12 U.S.C. Sec. 1832(c).... 1,100 1,100
12 U.S.C. 1884.............. 110 110
12 U.S.C. 1972(2)(F)
Tier One CMP............ 5,500 6,500
Tier Two CMP............ 27,500 32,500
Tier Three CMP.......... 1,175,000 1,250,000
12 U.S.C. 3108(b)
Tier One CMP............ 5,500 6,500
Tier Two CMP............ 27,500 32,500
Tier Three CMP.......... 1,175,000 1,250,000
12 U.S.C. 3349(b)
Tier One CMP............ 5,500 6,500
Tier Two CMP............ 27,500 32,500
Tier Three CMP.......... 1,175,000 1,250,000
12 U.S.C. 3909(d)........... 1,100 1,100
12 U.S.C. 4717(b)
Tier One CMP............ 5,500 6,500
Tier Two CMP............ 27,500 32,500
Tier Three CMP.......... 1,175,000 1,250,000
15 U.S.C. 78u-2
Tier One CMP 5,500 6,500
(individuals)..........
Tier One CMP (others)... 60,000 65,000
Tier Two CMP 60,000 65,000
(individuals)..........
Tier Two CMP (others)... 300,000 325,000
Tier Three CMP 120,000 130,000
(individuals)..........
Tier Three penalty 575,000 625,000
(others)...............
31 U.S.C. 3802.............. 5,500 6,500
42 U.S.C. 4012a(f)
Maximum CMP per 350 385
violation..............
Maximum CMPs per year... 115,000 125,000
------------------------------------------------------------------------
\3\ As noted, the FDIC is simultaneously and prospectively; (A)
Correcting the technical error that occurred in 2000 when this CMP was
not actually adjusted, by now increasing the CMP from a maximum of
$1,100,000 to $1,175,000 for the June 1996 to June 1999 period and (B)
adjusting the CMP the maximum from $1,175,000 to $1,250,000 for the
June 2000 to June 2003 period.

[[Page 61303]]

II. Section-by-Section Analysis

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 increasing the: (A)
Tier One CMP amount from $5,500 for each day the violation continues to
$6,500 for each day that the violation continues; (B) Tier Two CMP
amount from $27,500 for each day that the violation continues to
$32,500 for each day that the violation continues; and (C) Tier Three
CMP amount from $1,175,000 to $1,250,000 for each day that the
violation continues or, in the case of a depository institution,
increasing the CMP from an amount not to exceed the lesser of
$1,250,000 or one percent of the total assets of the institution for
each day that the violation continues. Section 308.116(b)(4) has also
been amended by revising the date after which the adjusted CMPs will
apply to violations covered by Sec. 308.116 by deleting ``November 12,
1996'' and replacing it with ``December 31, 2004.''

Section 308.132

Section 308.132 pertains to the manner in which the FDIC assesses
CMPs. Paragraph (c)(2) of that section pertains to the CMPs imposed
pursuant to section 7(a) of the Federal Deposit Insurance Act (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. With respect to late filings,
paragraph (c)(2)(ii) of Sec. 308.132 has been amended to reflect the
increase in the Tier Two CMP amount from a maximum of $22,000 per day
to $27,000 per day for each day the failure to file continues. No
change has been made to the Tier One CMP. Paragraph (c)(2)(ii) of Sec.
308.132 has also been amended by revising the date after which the
adjusted CMPs will apply to violations covered by that paragraph by
deleting ``November 12, 1996'' and replacing it with ``December 31,
2004.''
Paragraph (c)(2)(iii) of Sec. 308.132 pertains to CMPs 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 CMP amounts from a maximum of $22,000 per day
for each day that the information is not corrected to a maximum of
$27,000 per day for each day that the information is not corrected.
Paragraph (c)(2)(iii)(C) of that section reflects the increase in Tier
Three CMPs from an amount not to exceed the lesser of $1,175,000 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
$1,250,000 or one percent of the total assets of such institution for
each day the information is not corrected. No change has been made to
the Tier One CMP amount. Paragraphs (c)(2)(iii)(B) and (C) have also
been amended by revising the date after which the adjusted CMPs will
apply to violations covered by paragraph (c)(2)(iii) by deleting
``November 12, 1996'' in both paragraphs and replacing it in both
paragraphs with ``December 31, 2004.''
Paragraph (c)(3)(i) of Sec. 308.132 sets forth the increases for
CMPs assessed pursuant to section 8(i)(2) of the FDIA (12 U.S.C.
1818(i)(2)). A Tier One CMP will increase from a maximum of $5,500 per
day to a maximum of $6,500 per day for each day that the violation
continues. A Tier Two CMP will increase from a maximum of $27,500 per
day to a maximum of $32,500 per day for each day that the violation,
practice, or breach of fiduciary duty continues. A Tier Three CMP will
increase from an amount not to exceed, in the case of any person other
than an insured depository institution, $1,175,000 to a maximum of
$1,250,000 or, in the case of any insured depository institution, the
amount will increase from a maximum of $1,175,000 to $1,250,000 or an
amount not to exceed the lesser of $1,250,000 or one 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 grant jurisdiction to the FDIC to assess CMPs 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. and 12 CFR 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 violation of those statutes are the
same as the increases for CMPs under section 8(i)(2) of the FDIA (12
U.S.C. 1818(i)(2)) cited above. As in section 8(i)(2) of the FDIA, Tier
One, Tier Two, and Tier Three CMP amounts will increase accordingly.
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 (12
U.S.C. 1817(c)) for late filing or the submission of false or
misleading certified statements. A Tier Two CMP 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 $22,000 per day to an amount not to exceed $27,000
for each day during which the failure to file continues or the false or
misleading information is not corrected. As noted above, 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 be corrected for the June 1996 to June
1999 period from an amount not to exceed the lesser of $1,100,000 or
one 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
$1,175,000 or one 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. Also, 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 be adjusted for the June 2000 to June 2003 period
by increasing it from an amount not to exceed the lesser of $1,175,000
or one 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
$1,250,000 or one 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. No change has been made to the
Tier One CMP amount.
Paragraph (c)(3)(iii) of Sec. 308.132 sets forth the increases in
the 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 an examination or
to provide required information during an examination. The maximum CMP
amount will increase from $5,500 to $6,500.
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 a maximum of $5,500 to a maximum of $6,500. A Tier Two CMP which
may be assessed under 12 U.S.C.

[[Page 61304]]

1972(2)(F)(ii) will increase from a maximum of $27,500 to a maximum of
$32,500. 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 $1,175,000
for each day during which the violation, practice, or breach continues
to an amount not to exceed $1,250,000 for each day during which the
violation, practice, or breach continues. In the case of any insured
depository institution, a Tier Three CMP will increase from an amount
not to exceed the lesser of $1,175,000 or one 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
$1,250,000 or one 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 pertains to the assessment of
CMPs under the International Banking Act of 1978 (IBA) (12 U.S.C.
3108(b)), 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)). The
amount of these CMPs 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) of the FDIA.
Paragraph (c)(3)(xi) of Sec. 308.132 sets forth the increase in
CMP amounts 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) of
the FDIA.
Paragraph (c)(3)(xiii) of Sec. 308.132 states that pursuant to the
Community Development Banking and Financial Institution Act (CDBA) (12
U.S.C. 4717(b)) a CMP may be assessed for violation of the CDBA
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) of the FDIA.
Paragraph (c)(3)(xiv) of Sec. 308.132 states that pursuant to
section 21B of the Securities Exchange Act of 1934 (Exchange Act) (15
U.S.C. 78u-2), CMPs may be assessed for violations of 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 $5,500
for a natural person or $60,000 for any other person for violations set
forth in 15 U.S.C. 78u-2(a), to $6,500 for a natural person or $65,000
for any other person. The Tier Two CMP which may be 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 $60,000 for a natural
person to $300,000 for any other person to an amount not to exceed
$65,000 for a natural person or $325,000 for any other person if the
act or omission involved fraud, deceit, manipulation, or deliberate or
reckless disregard of a regulatory requirement. 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
$120,000 for a natural person or $575,000 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, will be increased to an amount not to exceed $130,000
for a natural person or $625,000 for any other person.
Paragraph (c)(3)(xv) of Sec. 308.132 states that a CMP may be
assessed for violation of the Program Fraud Civil Remedies Act (31
U.S.C. 3802) for violations involving false claims and statements. The
maximum CMP amount will increase from $5,500 to $6,500. Paragraph
(c)(3)(xvi) of Sec. 308.132 states that CMPs 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 maximum penalty for each
violation will increase from an amount not to exceed $350 to an amount
not to exceed $385. The maximum amount of CMPs which may be assessed
annually against a regulated lending institution will increase from an
amount not to exceed a total of $115,000 to an amount not to exceed a
total of $125,000.
Paragraph (c)(3) of Sec. 308.132 has also been amended by revising
the date after which the adjusted CMPs will apply to violations covered
by that paragraph by deleting ``November 12, 1996'' and replacing it
with ``December 31, 2004.''

III. Exemption From Public Notice and Comment

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. The FDIC has thus determined for good
cause that public notice and comment is unnecessary and impracticable
under the Administrative Procedure Act (5 U.S.C. 553(b)(3)(B)), and
that the rule should be published in the Federal Register as a final
rule.

IV. Effective Date

For the same reasons that the FDIC for good cause has determined
that public notice and comment is unnecessary and impractical, the FDIC
also finds that it has good cause to adopt an effective date that would
be less than 30 days after the date of publication in the Federal
Register pursuant to the APA (5 U.S.C. 553(d)). In the interest of
fairness, however, the increase in the maximum amount of civil money
penalties in this regulation applies only to violations that occur
after December 31, 2004, rather than to violations that occurred after
the date of publication of this rule in the Federal Register. Moreover,
section 302 of the Riegle Community Development and Regulatory
Improvement Act of 1994 (12 U.S.C. 4802) states that a final rule
imposing new requirements must take effect on the first day of a
calendar quarter following its publication. That section provides,
however, that an agency may determine that the rule should take effect
earlier upon a finding of good cause.
The FDIC also finds that the increase in the maximum amounts of
CMPs under the FDIC's jurisdiction should be effective as of December
31, 2004 since the rule is ministerial, technical, and
noncontroversial. Under the statute, agencies must make the required
CMP inflation adjustments: (A) According to the formula in the statute
and (B) within four years of the last inflation adjustment. Federal
agencies have no discretion as to the amount or timing of the
adjustment.

V. Regulatory Flexibility Act

An initial regulatory flexibility analysis under the Regulatory
Flexibility Act (RFA) (5 U.S.C. 603) is required only when an agency
must publish a general notice of proposed rulemaking. As already noted,
the FDIC has determined that publication of a notice of proposed
rulemaking is not necessary for this final rule. Accordingly, the RFA
does not require

[[Page 61305]]

an initial regulatory flexibility analysis. Nevertheless, the FDIC has
considered the likely impact of the rule on small entities and believes
that the rule will not have a significant impact on a substantial
number of small entities.

VI. Small Business Regulatory Enforcement Fairness Act

The Small Business Regulatory Enforcement Fairness Act of 1996
(SBREFA) (Public Law 104-121, 110 Stat. 857) provides generally for
agencies to report rules to Congress and for Congress to review such
rules. The reporting requirement is triggered in instances where the
FDIC issues a final rule as defined by the APA (5 U.S.C. 551 et seq.).
Because the FDIC is issuing a final rule as defined by the APA, the
FDIC will file the reports required by the SBREFA.
The Office of Management and Budget has determined that this final
revision to 12 CFR 308 does not constitute a ``major'' rule as defined
by the statute.

VII. The Treasury and General Government Appropriations Act, 1999
Assessment of Federal Regulations and Policies on Families

The FDIC has determined that this final rule will not affect family
well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act, 1999 (Public Law No. 105-277,
112 Stat. 2681 (1998)).

VIII. Paperwork Reduction Act

No collection of information pursuant to section 3504(h) of the
Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.) is contained
in this rule. Consequently, no information has been submitted to the
Office of Management and Budget for review.

IX. Authority for the Regulation

This regulation is authorized by the FDIC's general rulemaking
authority and pursuant to its fundamental responsibilities to ensure
the safety and soundness of insured depository institutions.
Specifically, 12 U.S.C. 1819(a)(Tenth) provides the FDIC with general
authority to issue such rules and regulations as it deems necessary to
carry out the statutory mandates of the FDIA and other laws that the
FDIC is charged with administering or enforcing.

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.

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For the reasons set out in the preamble, the FDIC amends 12 CFR 308 as
follows:

PART 308--RULES OF PRACTICE AND PROCEDURE

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1. The authority for part 308 continues to read as follows:

Authority: 5 U.S.C. 504, 554-557; 12 U.S.C. 93(b), 164, 505,
1815(e), 1817, 1818, 1820, 1828, 1829, 1831i, 1831m(g)(4), 1831o,
1831p-1, 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, 78w, 6801(b), 6805(b)(1); 28 U.S.C. 2461 note; 31 U.S.C. 330,
5321; 42 U.S.C. 4012a; Sec. 3100(s), Pub. L. 104-134, 110 Stat.
1321-358.

Sec. 308.116 [Amended]

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2. Section 308.116 is amended by:
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a. Paragraph (b)(4) is amended by removing ``November 12, 1996'' and
adding ``December 31, 2004'' in its place.
0
b. Paragraph (b)(4)(i) is amended by removing $5,500 and adding $6,500
in its place.
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c. Paragraph (b)(4)(ii) is amended by removing $27,500 and adding
$32,500 in its place.
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d. Paragraph (b)(4)(iii)(A) is amended by removing $1,175,000 and
adding $1,250,000 in its place.
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e. Paragraph (b)(4)(iii)(B) is amended by removing $1,175,000 and
adding $1,250,000 in its place.

Sec. 308.132 [Amended]

0
3. Section 308.132 is amended by:
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a. Paragraph (c)(2)(ii) is amended by removing ``November 12, 1996''
and adding ``December 31, 2004'' in its place.
0
b. Paragraph (c)(2)(ii) is amended by removing $22,000 and adding
$27,500 in its place.
0
c. Paragraph (c)(2)(iii)(B) is amended by removing $22,000 and adding
$27,500 in its place.
0
d. Paragraph (c)(2)(iii)(B) is amended by removing ``November 12,
1996'' and adding ``December 31, 2004'' in its place.
0
e. Paragraph (c)(2)(iii)(C) is amended by removing $1,175,000 and
adding $1,250,000 in its place.
0
f. Paragraph (c)(2)(iii)(C) is amended by removing ``November 12,
1996'' and adding ``December 31, 2004'' in its place.
0
g. Paragraph (c)(3) is amended by removing ``November 12, 1996'' and
adding ``December 31, 2004'' in its place.
0
h. Paragraph (c)(3)(i) is amended by removing $5,500 and adding $6,500
in its place, by removing $27,500 and adding $32,500 in its place, and
by removing $1,175,000 and adding $1,250,000 in its place.
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i. Paragraph (c)(3)(ii) is amended by removing $22,000 and adding
$27,000 in its place and by removing $1,100,000 and adding $1,250,000
in its place.\4\
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\4\ This provision simultaneously and prospectively implements
both the: (A) Technical correction for the June 1996 to June 1999
period by increasing the tier three CMP for violation of 12 U.S.C.
1817(c) from $1,100,000 to $1,175,000 and (B) adjusts the corrected
$1,175,000 CMP by increasing the CMP to $1,250.000 for the June 2000
to June 2003 period.
---------------------------------------------------------------------------

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j. Paragraph (c)(3)(iii) is amended by removing $5,500 and adding
$6,500 in its place.
0
k. Paragraph (c)(3)(ix) is amended by removing $5,500 and adding $6,500
in its place, by removing $27,500 and adding $32,500 in its place, and
by removing $1,175,000 and adding $1,250,000 in its place.
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l. In paragraph (c)(3)(xiv) by removing $5,500 and adding $6,500 in its
place, by removing $60,000 and adding $65,000 in its place, by removing
$300,000 and adding $325,000 in its place, by removing $120,000 and
adding $130,000 in its place, and by removing $575,000 and adding
$625,000 in its place.
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m. Paragraph (c)(3)(xv) is amended by removing $5,500 and adding $6,500
in its place.
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n. Paragraph (c)(3)(xvi) is amended by removing $350 and adding $385 in
its place and by removing $115,000 and adding $125,000 in its place.

Dated this 12th day of October, 2004.

By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 04-23242 Filed 10-15-04; 8:45 am]

BILLING CODE 6714-01-P

Last Updated 10/19/2004 regs@fdic.gov