FR 2021-02231

Summary

The Department of Education has updated its civil monetary penalties (CMPs) to account for inflation, as mandated by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. The adjustments aim to maintain the deterrent effect of financial penalties related to various statutory violations. Among these are sanctions for non-compliance in higher education reporting, improper lobbying, and violations by lenders under the Higher Education Act. The recalibrated penalties employ a specific multiplier to ensure consistent inflation adjustments, effective for violations post-November 2, 2015, and assessments made after February 3, 2021.

Significant Issues or Concerns

Several issues arise from the document. First, there is insufficient explanation of how the multiplier used for the adjustments was determined. This might be confusing to readers not familiar with the referenced OMB Memorandum No. M-21-10. Second, the phrasing concerning when the penalties apply could be ambiguous for those unfamiliar with legal terminology. Besides this, the document uses conventions and acronyms like CMP, HEA, CFR, and CPI-U without providing full definitions, which might be unclear for a general audience.

Furthermore, the document lacks a detailed discourse on how these updated penalties will function as an effective deterrent, potentially leaving questions about their practical impact. There is also no mention of any follow-up procedures or assessments to ensure compliance with the new penalties. Lastly, the reasoning behind the non-application of the Regulatory Flexibility Act is briefly noted, possibly leaving some readers unclear on its justification.

Impact on the Public

Broadly, the adjustments of penalties could affect institutions and individuals subject to federal jurisdictions, ensuring that the financial repercussions of violations remain significant enough to deter non-compliance. For the general public, this reinforces a system of accountability, potentially fostering a more compliant and transparent federal interaction.

Impact on Specific Stakeholders

For specific stakeholders such as higher education institutions, government contractors, and lenders, the new penalties mean a direct financial implication should they fail to comply with their statutory obligations. While the adjustments are relatively modest, they represent a continued effort to enforce federal regulations more stringently. On the administrative side, the document exempts itself from certain regulatory review requirements, which might expedite the adjustments' implementation but also raises questions about transparency and oversight. This could be a point of contention for organizations focused on governmental accountability and the burden regulation places on different sectors.

All in all, while the specific financial adjustments seem straightforward, the surrounding procedural and clarity issues highlight a need for more comprehensible communication and perhaps a more robust framework ensuring effective regulatory enforcement.

The document titled "Adjustment of Civil Monetary Penalties for Inflation" primarily addresses the adjustments made by the Department of Education to civil monetary penalties (CMPs) as required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. This commentary will examine the financial references detailed in the document and how they relate to potential issues.

Financial References in the Document

The document outlines several adjustments to penalties related to various statutes. Each penalty increase is calculated using a multiplier of 1.01182, as specified by the Office of Management and Budget (OMB) Memorandum No. M-21-10. However, the methodology behind this specific multiplier is not detailed, which could cause confusion.

Several penalties are adjusted as follows:

• For 20 U.S.C. 1015(c)(5): Increased from $39,229 to $39,693.
• For 20 U.S.C. 1022d(a)(3): Increased from $32,676 to $33,062.
• For 20 U.S.C. 1082(g) and 1094(c)(3)(B): Increased from $58,328 to $59,017.
• For 20 U.S.C. 1228c(c)(2)(E): Increased from $1,722 to $1,742.
• For 31 U.S.C. 1352(c)(1) and (c)(2)(A), penalties range increased from $20,489 to $204,892 to $20,731 to $207,314.
• For 31 U.S.C. 3802(a)(1) and (a)(2): Increased from $11,665 to $11,803.

Issues Related to Financial References

Understanding of Adjustments: A potential issue arises from the lack of detail on how the inflation multiplier 1.01182 was determined. This could be unclear to those without access to or understanding of OMB Memorandum No. M-21-10, potentially leaving stakeholders unsure about the basis for these penalty adjustments.

Applicability of Penalties: The document states that the adjusted penalties apply to violations occurring after November 2, 2015. However, this wording might be ambiguous to readers unfamiliar with legal jargon, affecting their understanding of when these penalties might be applied.

Acronym Familiarity: The document assumes knowledge of various acronyms (such as CMP, HEA, CFR, CPI-U) without providing definitions. This lack of explanation can obscure the understanding of financial implications for some readers.

Effectiveness of Adjustments: The document does not explain how these financial adjustments specifically deter future violations. Without this rationale, questions may arise about whether these increases are sufficient to achieve the intended deterrence effect.

Regulatory Flexibility Act: The document briefly mentions that the Regulatory Flexibility Act does not apply to this rulemaking. A clearer explanation of why this act is not applicable could help dispel any confusion regarding its absence in the financial context.

Compliance Monitoring: There is no mention of mechanisms to monitor compliance with the adjusted penalties, leaving open questions about how the Department of Education will ensure the effectiveness of these financial adjustments.

In summary, while the document provides specific figures for adjusted penalties, the accompanying explanations and context are somewhat lacking, which could leave some stakeholders uncertain about the financial references and their implications.