![[logo] US EPA](http://www.epa.gov/epafiles/images/logo_epaseal.gif){kind=logo}
Amendments to HUD's Mortgagee Review Board and Civil Money Penalty Regulations
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
[Federal Register: June 21, 2000 (Volume 65, Number 120)]
[Rules and Regulations]
[Page 38709-38711]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21jn00-15]
[[Page 38709]]
-----------------------------------------------------------------------
Part V
Department of Housing and Urban Development
-----------------------------------------------------------------------
24 CFR Parts 25 and 30
Amendments to HUD's Mortgagee Review Board and Civil Money Penalty
Regulations; Final Rule
[[Page 38710]]
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Parts 25 and 30
[Docket No. FR-4308-F-02]
RIN 2501-AC44
Amendments to HUD's Mortgagee Review Board and Civil Money
Penalty Regulations
AGENCY: Office of the Secretary, HUD.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: This final rule makes conforming changes to HUD's regulations
to reflect statutory changes made by the Multifamily Assisted Housing
Reform and Affordability Act of 1997. These amendments are designed to
strengthen HUD's enforcement authority under its insured housing
programs. The final rule also makes several clarifying, non-substantive
amendments to these regulations. This final rule follows publication of
a February 23, 2000 interim rule. No public comments were received on
the interim rule. Accordingly, HUD is adopting the February 23, 2000
interim rule without change.
DATES: Effective Date: July 21, 2000.
FOR FURTHER INFORMATION CONTACT: Dane Narode, Deputy Chief Counsel for
Administrative Proceedings, Departmental Enforcement Center, Room B-
133, Department of Housing and Urban Development, 451 Seventh Street,
SW, Washington, DC 20410; telephone (202) 708-2350 (this is not a toll-
free number). Hearing or speech-impaired persons may access this number
via TTY by calling the toll-free Federal Information Relay Service at
1-800-877-8339.
SUPPLEMENTARY INFORMATION:
I. Background--The February 23, 2000 Interim Rule
On February 23, 2000 (65 FR 9084), HUD published an interim rule
amending its regulations at 24 CFR part 25 (which establishes the
procedures governing HUD's Mortgagee Review Board) and 24 CFR part 30
(which implements HUD's civil money penalty provisions). The February
23, 2000 interim rule updated these regulations to reflect statutory
amendments made by sections 551 and 553 of the Multifamily Assisted
Housing Reform and Affordability Act of 1997 (Title V of the Fiscal
Year 1998 HUD Appropriations Act; Pub.L. 105-65, approved October 27,
1997) (referred to as the ``Multifamily Reform Act'' or the ``Act'').
The Multifamily Reform Act made several amendments to strengthen
HUD's enforcement authority under the National Housing Act (12 U.S.C.
1701 et seq.), which establishes the statutory framework for HUD's
insured housing programs. Section 551 of the Act provides that
suspensions issued by the HUD Mortgagee Review Board are effective,
without previous 30-day written notice of violation to the mortgagee,
if there is sufficient evidence that immediate action is required to
protect the financial interests of HUD or the public. Section 553 of
the Multifamily Reform Act expands the list of persons and types of
violations subject to a civil money penalty under HUD's insured housing
programs.
In addition to implementing sections 551 and 553 of the Multifamily
Reform Act, the February 23, 2000 interim rule also made several
clarifying, non-substantive, amendments to HUD's regulations at 24 CFR
parts 25 and 30. The first amendment clarified under what conditions
HUD's Mortgagee Review Board may issue a suspension. The second
amendment clarified the effect of a suspension or withdrawal issued by
the Board. The third amendment clarified that the Assistant Secretary
for Public and Indian Housing may initiate a civil money penalty under
the section 184 Indian housing loan guarantee program.
A complete description of the amendments to 24 CFR parts 25 and 30
was provided in the preamble to the February 23, 2000 interim rule.
II. This Final Rule
This final rule adopts the policies and procedures contained in the
February 23, 2000 interim rule. The public comment period on the
interim rule closed on April 24, 2000. HUD did not receive any public
comments on the interim rule. Accordingly, this final rule adopts the
February 23, 2000 interim rule without change.
III. Other Enforcement-Related Amendments Made by the Multifamily
Reform Act
In addition to the statutory amendments described above, the
Multifamily Reform Act made several other revisions to HUD's
enforcement authority under its programs. For example, section 561 of
the Multifamily Reform Act expands the list of persons and types of
violations subject to a civil money penalty under section 537 of the
National Housing Act. Further, section 563 of the Multifamily Reform
Act amends the United States Housing Act of 1937 (the statutory
authority for HUD's public and assisted housing programs) to provide
for the imposition of civil money penalties for noncompliance with
Section 8 Housing Assistance Payment contracts. The Multifamily Reform
Act directs that HUD implement these statutory amendments using notice
and comment rulemaking procedures. Accordingly, the amendments made by
sections 561 and 563 of the Multifamily Reform Act will be the subject
of a separate HUD proposed rule.
IV. Small Entities and HUD Enforcement Actions
The Small Business Regulatory Enforcement Fairness Act of 1996
(Pub. L. 104-121, 110 Stat. 847, approved March 29, 1996) (``SBREFA'')
provides, among other things, for agencies to establish specific
policies or programs to assist small entities. Small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. On May 21, 1998 (63 FR 28214), HUD published a Federal
Register notice describing HUD's actions on implementation of SBREFA.
Section 223 of SBREFA requires agencies that regulate the
activities of small entities to establish a policy or program to reduce
or, under appropriate circumstances, waive civil penalties when a small
entity violates a statute or regulation. Where penalties are determined
appropriate, HUD's policy is to consider: (1) The nature of the
violation (the violation must not be one that is repeated or multiple,
willful, criminal or poses health or safety risks), (2) whether the
entity has shown a good faith effort to comply with the regulations;
and (3) the resources of the regulated entity.
With respect to the imposition of civil money penalties, HUD is
cognizant that section 222 of the SBREFA requires the Small Business
and Agriculture Regulatory Enforcement Ombudsman to ``work with each
agency with regulatory authority over small businesses to ensure that
small business concerns that receive or are subject to an audit, on-
site inspection, compliance assistance effort or other enforcement
related communication or contact by agency personnel are provided with
a means to comment on the enforcement activity conducted by this
personnel.'' To implement this statutory provision, the Small Business
Administration has requested that agencies include the following
language on agency publications and notices which are provided to small
businesses concerns at the time the enforcement action is undertaken.
The language is as follows:
[[Page 38711]]
Your Comments Are Important
The Small Business and Agriculture Regulatory Enforcement
Ombudsman and 10 Regional Fairness Boards were established to
receive comments from small businesses about federal agency
enforcement actions. The Ombudsman will annually evaluate the
enforcement activities and rate each agency's responsiveness to
small business. If you wish to comment on the enforcement actions of
[insert agency name], call 1-888-REG-FAIR (1-888-734-3247).
As HUD stated in its May 21, 1998 Federal Register notice, HUD
intends to work with the Small Business Administration to provide small
entities with information on the Fairness Boards and National Ombudsman
program, at the time enforcement actions are taken, to ensure that
small entities have the full means to comment on the enforcement
activity conducted by HUD.
V. Findings and Certifications
Environmental Impact
In accordance with 24 CFR 50.19(c)(1) of the Department's
regulations, this final rule does not direct, provide for assistance or
loan and mortgage insurance for, or otherwise govern or regulate, real
property acquisition, disposition, leasing, rehabilitation, alteration,
demolition, or new construction, or establish, revise, or provide for
standards for construction or construction materials, manufactured
housing, or occupancy. Therefore, this final rule is categorically
excluded from the requirements of the National Environmental Policy Act
(42 U.S.C. 4321 et seq.).
Federalism Impact
Executive Order 13132 (entitled ``Federalism'') prohibits an agency
from publishing any rule that has federalism implications if the rule
either imposes substantial direct compliance costs on State and local
governments and is not required by statute, or the rule preempts State
law, unless the agency meets the consultation and funding requirements
of section 6 of the Executive Order. This final rule does not have
federalism implications and does not impose substantial direct
compliance costs on State and local governments or preempt State law
within the meaning of the Executive Order.
Regulatory Flexibility Act
The Secretary, in accordance with the Regulatory Flexibility Act (5
U.S.C. 605(b)) has reviewed and approved this rule, and in so doing
certifies that this final rule is not anticipated to have a significant
economic impact on a substantial number of small entities. As discussed
in this preamble, the rule makes conforming changes to HUD regulations
in 24 CFR parts 25 and 30 to reflect statutory changes made to the
National Housing Act by the Multifamily Reform Act. These changes are
not discretionary on the part of HUD. These changes are applicable
regardless of whether HUD revises its regulations to reflect these
statutory amendments.
The purpose of the legislation is to grant additional enforcement
tools to HUD to use against those who violate agreements and program
requirements. The Multifamily Reform Act expanded the list of persons
and the types of violations subject to civil money penalties under
HUD's insured housing programs for the purpose of protecting the FHA
insurance fund. To the extent that these statutory changes impact small
entities it will be as a result of actions taken by small entities
themselves--that is, violation of applicable program regulations and
requirements.
The rule also makes three clarifying, non-substantive amendments to
these regulations. These amendments do not impose new regulatory
requirements, but codify existing HUD practice. Accordingly, HUD has
determined that this final rule will have no adverse or
disproportionate economic impact on small entities.
Unfunded Mandates Reform Act
Title II of the Unfunded Mandates Reform Act of 1995 establishes
requirements for Federal agencies to assess the effects of their
regulatory actions on State, local, and tribal governments and the
private sector. This rule does not impose a Federal mandate that will
result in the expenditure by State, local, and tribal governments, in
the aggregate, or by the private sector, of $100 million or more in any
one year.
List of Subjects
24 CFR Part 25
Administrative practice and procedure, Loan programs--housing and
community development, Organization and functions (Government
agencies).
24 CFR Part 30
Administrative practice and procedure, Loan programs--housing and
community development, Mortgages, Penalties.
PARTS 24 AND 30--[AMENDED]
For the reasons discussed in the preamble, the interim rule
amending 24 CFR part 25 and 24 CFR part 30, which was published at 65
FR 9084, is adopted as a final rule without change.
Dated: June 14, 2000.
Andrew Cuomo,
Secretary.
[FR Doc. 00-15683 Filed 6-20-00; 8:45 am]
BILLING CODE 4210-32-P