This supervisory policy provides
general guidance concerning the criteria used by the federal financial
institutions regulatory agencies (agencies) in the assessment of civil
money penalties under statutes that require consideration of the five
following factors in setting the amount of fines:
1
1.
size
of financial resources
2.
good faith
3.
gravity
of the violation
4.
history
of previous violations
5.
other factors that justice may require
The principles set forth in this policy apply
to penalties assessed both by consent and through formal enforcement
proceedings.
The agencies generally are authorized, under these statutes,
to assess civil money penalties for violations of—
1.
any
law or regulation;
2.
any
final or temporary order, including a cease-and-desist, suspension,
removal, or prohibition order;
3.
any condition imposed in writing in connection with the grant of
any application or other request;
4.
any
written agreement; and
5.
regulatory
reporting requirements.
Under certain circumstances, the agencies may
also assess fines for unsafe or unsound practices and breaches of
fiduciary duty.
In determining the amount and the appropriateness of initiating
a civil money penalty assessment proceeding under statutes requiring
consideration of the above-mentioned five statutory factors,
2 the agencies have identified the following factors
as relevant:
1.
evidence
that the violation or practice or breach of fiduciary duty was intentional
or was committed with a disregard of the law or with a disregard of
the consequences to the institution
2.
the
duration and frequency of the violations, practices, or breaches of
fiduciary duty
3.
the
continuation of the violations, practices, or breach of fiduciary
duty after the respondent was notified or, alternatively, its immediate
cessation and correction
4.
the
failure to cooperate with the agency in effecting early resolution
of the problem
5.
evidence of concealment of the violation, practice, or breach of
fiduciary duty or, alternatively, voluntary disclosure of the violation,
practice or breach of fiduciary duty
6.
any
threat of loss, actual loss, or other harm to the institution, including
harm to the public confidence in the institution, and the degree of such
harm
7.
evidence
that a participant or his or her associates received financial gain
or other benefit as a result of the violation, practice, or breach
of fiduciary duty
8.
evidence of any restitution paid by a participant of losses resulting
from the violation, practice, or breach of fiduciary duty
9.
history
of prior violation, practice, or breach of fiduciary duty, particularly
where they are similar to the actions under consideration
10.
previous criticism of the institution or individual for similar
actions
11.
presence or absence of a compliance program and its effectiveness
12.
tendency to engage in violations of law, unsafe or unsound banking
practices, or breaches of fiduciary duty
13.
the existence of agreements, commitments, orders, or conditions
imposed in writing intended to prevent the violation, practice, or
breach of fiduciary duty
The agencies will give additional consideration in cases
where the violation, practice, or breach causes quantifiable, economic
benefit or loss. In those cases, removal of the benefit or recompense
of the loss usually will be insufficient, by itself, to promote compliance
with statutory and regulatory requirements. The penalty amount should
reflect a remedial purpose and should provide a deterrent to future
misconduct.
The agencies intend these factors to provide guidance
on the appropriateness of a civil money penalty, in a manner consistent
with the statutes authorizing such an action. This policy does not
preclude any agency from considering any other matter relevant to
the civil money penalty assessment.
Issued
by the Federal Financial Institutions Examination Council effective
June 3, 1998. This statement replaces the statement issued on July
31, 1980.
