Adjusted civil money penalties that increase the maximum fine to more than $1.9 million for the most egregious misdeeds are set in a final rule by the Federal Reserve, according to recent filings with the Federal Register.
Under federal law, civil money penalties (CMP) must be reconfigured each year by Jan. 15 to account for inflation. The new levels of CMPs will apply to penalties assessed after the adjustments are published publicly and on associated violations that occurred on or after Nov. 2, 2015. Penalties assessed for violations occurring prior to Nov. 2, 2015, will be subject to the amounts set in the Fed Board’s 2012 adjustment pursuant to the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015.
The adjusted penalties are set by determining the percentage by which the Consumer Price Index (CPI) for October 2017 exceeds the CPI for October 2016. “On December 15, 2017, as directed by the 2015 Act, the Office of Management and Budget (OMB) issued guidance to affected agencies on implementing the required annual adjustment which included the relevant inflation multiplier,” the Fed stated in its filings. “Using OMB’s multiplier, the Board calculated the adjusted penalties for its CMPs, rounding the penalties to the nearest dollar.”
For example, the maximum adjusted penalty, at $1,963,870, can be assessed in a variety of areas, including for submitting “knowingly or reckless false or misleading reports, inter alia” to the Fed. Inadvertent late or misleading reports can trigger a CMP of up to $3,928, while “other late or misleading reports, inter alia” can trigger a penalty of up to $39,278.
Rules of Practice for Hearings: Civil money penalty adjustments