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WBK Industry News - Federal Regulatory Developments

DOJ Significantly Increases Civil Money Penalties Effective August 1, 2016

In our Financial Services Update dated June 22, 2016, we discussed how civil money penalties assessed for violations of numerous federal statutes and regulations were set to increase significantly by August 1, 2016 as a result of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, and we identified interim rules that had already been published by certain agencies (e.g., CFPB, HUD, VA, NCUA, and FHFA). On June 30, 2016, the DOJ published its interim final rule regarding an increase in civil money penalties which impacts penalties under numerous statutes. The list is extensive and is available here.

While the following list is not all-inclusive, below are a number of the statutes impacted by this interim final rule along with certain resulting penalty limitation changes from their current amounts (as of November 2, 2015):

  • False Claims Act (nearly doubled, from a minimum of $5,500 to $10,781 and from a maximum of $11,000 to $21,563)
  • FIRREA (maximum almost doubled, from $1,100,000 to $1,893,610 (in general) and from a maximum of the lesser of $1,100,000 per day or $5,500,000 to $1,893,610 per day or $9,468,050, respectively, for continuing violations)
  • Program Fraud Civil Remedies Act (maximum nearly doubled, from $5,500 to $10,781)
  • Fair Housing Act (maximums increased from $75,000 to $98,935 for a first violation, and from $150,000 to $197,869 for any subsequent violations)
  • Money Laundering Control Act of 1986 (more than doubled, from $10,000 to $21,563)
  • Immigration Reform and Control Act of 1986 (IRCA) (significant increases in the minimums and maximums)
  • Americans With Disabilities Act (maximums increased from $75,000 to $89,078 for first violation of the public accommodations for individuals with disabilities requirements, and from $150,000 to $178,156 for subsequent violations of the same)
  • SCRA (maximums slightly decreased, from $60,000 to $59,810 for a first violation, and from $120,000 to $119,620 for any subsequent violations)

The adjusted civil penalty amounts are applicable only to civil penalties assessed after August 1, 2016, whose associated violations occurred after November 2, 2015, the date of enactment of the 2015 Amendments.  Therefore, violations occurring on or before November 2, 2015, and assessments made prior to August 1, 2016, whose associated violations occurred after November 2, 2015, will continue to be subject to the civil monetary penalty amounts set forth in the DOJ’s existing regulations in 28 C.F.R. Parts 20, 22, 36, 68, 71, 76 and 85 (or as set forth by statute if the amount has not yet been adjusted by regulation).