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Rules and Regulations
Federal Register Vol. 86, No. 16
Wednesday, January 27, 2021

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.

FARM CREDIT ADMINISTRATION
12 CFR Part 622
RIN 3052AD45

Rules of Practice and Procedure;
Adjusting Civil Money Penalties for Inflation Farm Credit Administration.
Final rule.

AGENCY:
ACTION:

This regulation implements inflation adjustments to civil money penalties CMPs that the Farm Credit Administration FCA may impose or enforce pursuant to the Farm Credit Act of 1971, as amended Farm Credit Act, and pursuant to the Flood Disaster Protection Act of 1973, as amended by the National Flood Insurance Reform Act of 1994, and further amended by the Biggert-Waters Flood Insurance Reform Act of 2012 Biggert-Waters Act collectively FDPA, as amended.
DATES: This regulation is effective on January 27, 2021, and is applicable beginning January 15, 2021.
FOR FURTHER INFORMATION CONTACT:
Brian Camp, Accountant, Office of Regulatory Policy, Farm Credit Administration, 703 2543004, TTY
703 8834056, or Autumn R. Agans, Senior Counsel, Office of General Counsel, Farm Credit Administration, 703 8834082, TTY 703 8834056.
SUPPLEMENTARY INFORMATION:
SUMMARY:

I. Objective The objective of this regulation is to adjust the maximum CMPs for inflation through a final rulemaking to retain the deterrent effect of such penalties.
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II. Background A. Introduction The Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 1996 Act and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 2015 Act
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collectively, 1990 Act, as amended, requires all Federal agencies with the authority to enforce CMPs to evaluate and adjust, if necessary, those CMPs each year to ensure that they continue to maintain their deterrent value and promote compliance with the law.
Section 32 of the 1990 Act, as amended, defines a civil monetary penalty 1 as any penalty, fine, or other sanction that: 1 Either is for a specific monetary amount as provided by Federal law or has a maximum amount provided for by Federal law; 2 is assessed or enforced by an agency pursuant to Federal law; and 3 is assessed or enforced pursuant to an administrative proceeding or a civil action in the Federal courts.2
The FCA imposes and enforces CMPs through the Farm Credit Act 3 and the FDPA, as amended.4 FCAs regulations governing CMPs are found in 12 CFR
parts 622 and 623. Part 622 establishes rules of practice and procedure applicable to formal and informal hearings held before the FCA, and to formal investigations conducted under the Farm Credit Act. Part 623 prescribes rules regarding persons who may practice before the FCA and the circumstances under which such persons may be suspended or debarred from practice before the FCA.
B. CMPs Issued Under the Farm Credit Act The Farm Credit Act provides that any Farm Credit System System institution or any officer, director, employee, agent, or other person participating in the conduct of the affairs of a System institution who violates the terms of a cease-and-desist order that has become final pursuant to section 5.25 or 5.26 of the Farm Credit Act must pay a maximum daily amount of $1,000,5 for each day such violation 1 Note: While the 1990 Act, as amended by 1996
and 2015 Acts, uses the term civil monetary penalties for these penalties or other sanctions, the Farm Credit Act and the FCA Regulations use the term civil money penalties. Both terms have the same meaning. Accordingly, this rule uses the term civil money penalty, and both terms may be used interchangeably.
2 See 28 U.S.C. 2461 note.
3 Public Law 92181, as amended.
4 42 U.S.C. 4012a and Public Law 103325, title V, 108 Stat. 2160, 225587 September 23, 1994.
5 The inflation-adjusted CMP in effect on January 15, 2020, for a violation of a final order is $2,404
per day, as set forth in 622.61a1 of FCA

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continues. This CMP maximum was set by the Farm Credit Amendments Act of 1985, which amended the Farm Credit Act. Orders issued by the FCA under section 5.25 or 5.26 of the Farm Credit Act include temporary and permanent cease-and-desist orders. In addition, section 5.32h of the Farm Credit Act provides that any directive issued under sections 4.3b2, 4.3Ae, or 4.14Ai of the Farm Credit Act shall be treated as a final order issued under section 5.25 of the Farm Credit Act for purposes of assessing a CMP.
Section 5.32a of the Farm Credit Act also states that any such institution or person who violates any provision of the Farm Credit Act or any regulation issued under this Act shall forfeit and pay a civil penalty of not more than $500 6 per day for each day during which such violation continues. This CMP maximum was set by the Agricultural Credit Act of 1987, which was enacted in 1988, and amends the Farm Credit Act. Current inflationadjusted CMP maximums are set forth in existing 622.61 of FCA regulations.7
The FCA also enforces the FDPA, as amended, which requires FCA to assess CMPs for a pattern or practice of committing certain specific actions in violation of the National Flood Insurance Program. The existing maximum CMP for a violation under the Flood Disaster Protection Act of 1973 is $2,000.8 9
C. Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015
1. In General The 2015 Act required all Federal agencies to adjust the CMPs yearly, starting January 15, 2017.
Under Section 4b of the 1990 Act, as amended, annual adjustments are to be made yearly no later than January 15 of regulations. We discovered a transposition error, and note that the correct number for 2020 is $2,367.
6 The inflation-adjusted CMP in effect on January 15, 2020, for a violation of the Farm Credit Act or a regulation issued under the Farm Credit Act is $1,071 per day, as set forth in 622.61a2 of FCA
regulations.
7 Prior adjustments were made under the 1990
Act and continue to be made each year.
8 Public Law 112141, 126 Stat. 405 July 6, 2012.
9 The inflation-adjusted CMP in effect on January 15, 2020, for a flood insurance violation is $2,226, as set forth in 622.61bof FCA regulations.

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