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Federal Register / Vol. 86, No. 20 / Tuesday, February 2, 2021 / Rules and Regulations Final rule.

SUMMARY: The Department of Veterans Affairs VA is providing public notice of inflationary adjustments to the maximum civil monetary penalties assessed or enforced by VA, as implemented by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, for calendar year 2021. VA may impose civil monetary penalties for false loan guaranty certifications. Also, VA may impose civil monetary penalties for fraudulent claims or written statements made in connection with VA programs generally. The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, sets forth a formula that increases the maximum statutory amounts for civil monetary penalties and directs VA to give public notice of the new maximum amounts by regulation.
DATES: This rule is effective February 2, 2021.
FOR FURTHER INFORMATION CONTACT:
Stephanie Li, Chief, Regulations Team, Loan Guaranty Service, Department of Veterans Affairs, 810 Vermont Avenue NW, Washington, DC 20420, 202 632
8862. This is not a toll-free number.
SUPPLEMENTARY INFORMATION: On November 2, 2015, the President signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 2015 Act Pub. L. 11474, sec. 701, 129 Stat. 599, which amended the Federal Civil Penalties Inflation Adjustment Act of 1990 Pub. L. 101
410, 104 Stat. 890, to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect.
The 2015 Act was codified in a note following 28 U.S.C. 2461. The 2015 Act requires agencies to publish annual adjustments for inflation, based on the percent change between the Consumer Price Index defined in the Act as the Consumer Price Index for all-urban consumers CPIU published by the Department of Labor for the month of October preceding the date of the adjustment and the prior years October CPIU. 28 U.S.C. 2461 note, secs. 4a and b and 5b1. This rule implements the 2021 calendar year inflation adjustment amounts.
Under 38 U.S.C. 3710g4B, VA is authorized to levy civil monetary penalties against private lenders that originate VA-guaranteed loans if a lender falsely certifies that they have complied with certain credit information and loan processing standards, as set forth by chapter 37,
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title 38 U.S.C. and part 36, title 38 CFR.
Under section 3710g4B, any lender who knowingly and willfully makes such a false certification shall be liable to the United States Government for a civil penalty equal to two times the amount of the Secretarys loss on the loan involved or to another appropriate amount, not to exceed $10,000, whichever is greater. VA implemented the penalty amount in 38 CFR
36.4340k1i and k3. On December 23, 2020, OMB issued Circular M21
10. This circular reflects that the October 2019 CPIU was 257.346 and the October 2020 CPIU was 260.388, resulting in an inflation adjustment multiplier of 1.01182. Accordingly, the calendar year 2021 inflation revision imposes an adjustment from $23,331 to $23,607.
Under 31 U.S.C. 3802, VA can impose monetary penalties against any person who makes, presents, or submits a claim or written statement to VA that the person knows or has reason to know is false, fictitious, or fraudulent, or who engages in other covered conduct. The statute permits, in addition to any other remedy that may be prescribed by law, a civil penalty of not more than $5,000
for each claim. 31 U.S.C. 3802a1 and 2. VA implemented the penalty amount in 38 CFR 42.3a1 and b1.
As previously noted, Circular M2110
reflects an inflation adjustment multiplier of 1.01182. Therefore, the calendar year 2021 inflation revision imposes an adjustment from $11,665 to $11,803.
Accordingly, VA is revising 38 CFR
36.4340k1i and 3 and 38 CFR
42.3a1 and b1 to reflect the 2021
inflationary adjustments for civil monetary penalties assessed or enforced by VA.
Administrative Procedure Act The Secretary of Veterans Affairs finds that there is good cause under 5
U.S.C. 553bB and d3 to dispense with the opportunity for prior notice and public comment and to publish this rule with an immediate effective date.
The 2015 Act requires agencies to make annual adjustments for inflation to the allowed amounts of civil monetary penalties notwithstanding section 553
of title 5, United States Code. 28 U.S.C.
2461 note, sec. 4a and b. The penalty adjustments, and the methodology used to determine the adjustments, are set by the terms of the 2015 Act. VA has no discretion to make changes in those areas. Therefore, an opportunity for prior notice and public comment and a delayed effective date is unnecessary.

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Executive Orders 12866 and 13563
Executive Orders 12866 and 13563
direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits including potential economic, environmental, public health and safety effects, and other advantages;
distributive impacts; and equity.
Executive Order 13563 Improving Regulation and Regulatory Review emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. The Office of Information and Regulatory Affairs has determined that this rule is not a significant regulatory action under Executive Order 12866. VAs impact analysis can be found as a supporting document at http
www.regulations.gov, usually within 48
hours after the rulemaking document is published. Additionally, a copy of the rulemaking and its impact analysis are available on VAs website at http
www.va.gov/orpm/, by following the link for VA Regulations Published From FY 2004 Through Fiscal Year to Date.
Unfunded Mandates The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more adjusted annually for inflation in any one year. This final rule will have no such effect on State, local, and Tribal governments, or on the private sector.
Paperwork Reduction Act This final rule contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 44 U.S.C. 35013521.
Regulatory Flexibility Act The Regulatory Flexibility Act, 5
U.S.C. 601 et seq. RFA, imposes certain requirements on Federal agency rules that are subject to the notice and comment requirements of the Administrative Procedure Act APA, 5
U.S.C. 553b. This final rule is exempt from the notice and comment requirements of the APA because the 2015 Act directed the Department to issue the annual adjustments without regard to section 553 of the APA.
Therefore, the requirements of the RFA
applicable to notice and comment rulemaking do not apply to this rule.

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