Interim Final Rule Summary

NCUA 12 CFR Part 747

Civil Money Penalties


Prepared by NASCUS Legislative & Regulatory Affairs Department
June, 2016

NCUA has issued an interim final rule to adjust the civil money penalties (CMPs) within NCUA’s jurisdiction to account for inflation. The adjustments are required under the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The legislation requires NCUA to review and adjust its CMPs for inflation annually and publish the adjusted CMPs in the Federal Register.

While the laws require NCUA to adjust maximum CMP amounts, the legislation does not require that individual CMP assessments be made at the maximum level. Histori8cally, NCUA has never assessed a CMP at the maximum level.

Comments must be received by July 21, 2016.  The Interim Final Rule will also become effective on July 21, 2016. A copy of the Interim Final Rule may be found here.

The rule would become effective 18 months after publication of a final rule. Incentive based compensation plans created before the effective date of a final rule would be grandfathered.

Summary

Pursuant to the statutory direction from Congress, NCUA has calculated new maximum CMPs for various regulatory violations. The new proposed CMPs are as follows:

                                                                                                                                                                                                                    

Citation Description Current Maximum Proposed Adjusted Max

12 U.S.C. 1782(a)(3)

Inadvertent failure to submit a report or inadvertent submission of a false or misleading report

$2,000.00

$3,787.00

12 U.S.C. 1782(a)(3)

Non-inadvertent failure to submit a report or non-inadvertent submission of a false or misleading report

$20,000.00

$37,872.00

12 U.S.C. 1782(a)(3)

Failure to submit a report or the submission of a false or misleading report done knowingly or with reckless disregard

Lesser of $1m or 1% of assets

Lesser of $1,893,610 or 1% of assets

12 U.S.C. 1782(d)(2)(A)

Tier 1 CMP for inadvertent failure to submit certified statement of insured shares and charges due NCUSIF, or inadvertent submission of false or misleading statement

$2,000.00

$3462.00

12 U.S.C. 1782(d)(2)(B)

Tier 2 CMP for non-inadvertent failure to submit certified statement or submission of false or misleading statement

$20,000.00

$34,620.00

12 U.S.C. 1782(d)(2)(C)

Tier 3 CMP for failure to submit certified statement or the submission of a false or misleading statement

Lesser of $1m or 1% of total assets

Lessor of $1,730,990 or 1% total assets

12 U.S.C. 1786(k)(2)(c)

Tier 3 knowing violation of regulation, order, or unsafe and unsound practice

Lesser of $1m or 1% of total assets

Lessor of $1,893,610.00 or 1% total assets

12 U.S.C. 1786(w)(5)(A)(ii)

Non-compliance with senior examiner post-employment restrictions

$250k

$311,470.00

15 U.S.C. 1639e(k)

Non-compliance with appraisal independence standards (1st violation)

$10,000.00

$10,875.00

15 U.S.C. 1639e(k)

Non-compliance with appraisal independence standards (subsequent violations)

$20,000.00

$21,729,00

42 U.S.C. 4012a(f)(5)

Non-compliance with flood insurance requirements

$2,000.00

$2,056.00