CFPB Increases Maximum Civil Money Penalties
Since the Inflation Adjustment Act, amended by the Debt Collection Improvement Act of 1996 and the Federal Civil Penalties Inflation Adjustment Act Improvement Act of 2015, federal agencies are required to adjust civil penalty amounts according to inflation each year.[1] In December 2022, pursuant to the Inflation Adjustment Act and Office of Management and Budget (OMB) guidance, the Consumer Financial Protection Bureau (CFPB) released the changes, effective January 15, 2023.
The penalty amounts were multiplied by the “cost-of-living adjustment” and rounded to the next dollar. The changes are required to ensure that penalties maintain a deterrent effect as the cost-of-living fluctuates. This year’s changes were significant compared to prior years due to inflationary pressures. Notice and opportunity for public comment were not found to be practical, necessary, or compatible with public interest. Below reflects the changes made by the CFPB accordingly.
Consumer Financial Protection Act, 12 U.S.C. 5565(c)(2)(A)
Tier 1 penalty
$6813
Consumer Financial Protection Act, 12 U.S.C. 5565(c)(2)(B)
Tier 2 penalty
$34,065
Interstate Land Sales Full Disclosure Act, 15 U.S.C. 1717a(a)(2)
Tier 2 penalty
$1,362,567
Interstate Land Sales Full Disclosure Act, 15 U.S.C. 1717a(a)(2)
Per violation
$2,374
Real Estate Settlement Procedures Act, 12 U.S.C. 2609(d)(1)
Annual cap
$2,372,677
Real Estate Settlement Procedures Act, 12 U.S.C. 2609(d)(1)
Per failure, where intentional
$223
Real Estate Settlement Procedures Act, 12 U.S.C. 2609(d)(2)(A)
Per violation
$34,401
SAFE Act, 12 U.S.C. 5113(d)(2)
Per violation
$34,401
Truth in Lending Act, 15 U.S.C. 1639e(k)(1)
First violation
$13,627
Truth in Lending Act, 15 U.S.C. 1639e(k)(2)
Subsequent violations
$27,252
[1] https://www.federalregister.gov/documents/2023/01/03/2022-28442/civil-penalty-inflation-adjustments