CFPB and Other Federal Agencies Adjust Civil Money Penalties for Inflation

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The CFPB recently issued a final rule to adjust for inflation the civil penalties within its jurisdiction.  The adjustments are required by the Federal Civil Penalties Inflation Adjustment Act of 1990 which, pursuant to the 2015 Adjustment Act, requires federal agencies to adjust the civil penalties within their jurisdiction annually, not later than January 15.  A civil money penalty is a fine imposed by a federal agency as a result of misconduct.

The civil penalties adjusted by the CFPB are the Tier 1-3 penalties set forth in Section 1055 of Dodd-Frank, as well as the civil penalties in the Interstate Land Sales Full Disclosure Act, Real Estate Settlement Procedures Act, SAFE Act, and Truth in Lending Act. The new penalty amounts apply to civil penalties assessed after January 15, 2018.

To obtain the new penalty amounts, the CFPB multiplied each penalty amount by the “cost-of-living adjustment” multiplier and rounded to the nearest dollar.  For the 2018 annual adjustment, the multiplier used was 1.02041, meaning that the maximum amount will be $5,639 for any “Tier 1” violation; $28,195 for any “Tier 2” violation, which requires recklessness; or $1,127,799 for any “Tier 3” violation, which requires knowledge.  These amounts are calculated “for each day during which such violation continues.”

In addition, the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve issued similar adjustment notices in the Federal Register, updating the maximum civil money penalty amount that may be imposed by each agency.

The CFPB announcement is available here: https://www.gpo.gov/fdsys/pkg/FR-2018-01-12/pdf/2018-00399.pdf.

The NCUA announcement is available here: https://www.gpo.gov/fdsys/pkg/FR-2018-01-16/pdf/2018-00488.pdf.

The OCC announcement is available here: https://www.gpo.gov/fdsys/pkg/FR-2018-01-12/pdf/2018-00521.pdf.

The FDIC announcement is available here: https://www.fdic.gov/news/board/2017/2017-12-19-notice-sum-b-fr.pdf.

The Federal Reserve announcement is available here: https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20180112a1.pdf.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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