Maximum CMP penalties increase
AML AND COMPLIANCE NEWS |
The Federal Civil Penalties Inflation Adjustment Improvements Act of 2015 requires agencies of the federal government to make annual adjustments for inflation to civil money penalty (CMP) maximum dollar amounts. The act also requires an initial catch-up adjustment that must be announced by an interim final rule and go in effect no later than Aug.1, 2016.
The adjustments are designed to retain the deterrent effect of the penalties and are based on changes in the Consumer Price Index for All Urban Consumers (CPI-U). The catch-up adjustment is based on a comparison between the CIP-U for October 2015 and October of the year in which the previous adjustment was made. Because agencies previously made adjustments at various times, the adjustment amounts will vary with some increasing by less than 10 percent, while CMPs for agencies that have not increased penalties for some time increasing by much larger amounts. Future adjustments are required to be published in the Federal Register by Jan. 15 of each year beginning in 2017. The increased CMP amounts reflect the maximum amount that may be assessed for each penalty category. The actual amount of CMPs assessed will continue to be based on the facts and circumstances of each situation.
The interim final rules for industry related agencies (except for the rule for the Board of Governors of the Federal Reserve which was not available at time of printing) can be found at: