VA Holds 2025 Civil Penalty Levels for 2026 After Government Shutdown Disrupts CPI Data

No 2026 Inflation Adjustment for VA Civil Monetary Penalties

The Department of Veterans Affairs has announced it will make no change to its civil monetary penalty amounts for 2026, continuing to apply the levels it published in 2025. The determination stems from a government shutdown that began in October 2025, which prevented the Bureau of Labor Statistics from producing the October 2025 Consumer Price Index for all-urban consumers (CPI-U) data that the law requires as the basis for annual penalty adjustments.

The statutory framework for these adjustments is the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, signed into law on November 2, 2015. The 2015 Act requires agencies to publish annual inflation adjustments based on the percentage change between the CPI-U for the October preceding the adjustment date and the prior year's October CPI-U, as codified in a note following 28 U.S.C. 2461. The Office of Management and Budget, in Memorandum M-26-11 dated April 17, 2026, determined that there is no updated cost-of-living adjustment multiplier for 2026 and directed federal agencies to continue using their 2025 civil monetary penalty levels.

OMB's memorandum further explained the legal basis for inaction: the 2015 Act "does not provide for an alternative calculation in the unusual event that there is not October data," and that "as a matter of statutory interpretation, there is not authority to use an alternative method of calculation," with any effort to do so potentially subjecting revised penalty calculations to "significant and disruptive litigation risks," according to the notice.

VA's Specific Penalty Authorities

VA administers two distinct civil penalty authorities that would have been subject to adjustment. Under 38 U.S.C. 3710(g)(4)(B), VA is authorized to levy civil monetary penalties against private lenders that originate VA-guaranteed loans if a lender falsely certifies compliance with credit information and loan processing standards set forth by chapter 37, title 38 U.S.C. and part 36, title 38 CFR. Under that provision, any lender who knowingly and willfully makes such a false certification is liable to the United States Government for a civil penalty equal to two times the amount of the Secretary's loss on the loan involved, or another appropriate amount not to exceed $10,000, whichever is greater. VA implemented this penalty amount in 38 CFR 36.4340(k)(1)(i) and (k)(3).

Separately, under 31 U.S.C. 3802, VA can impose monetary penalties against any person who makes, presents, or submits a claim or written statement to VA that the person knows or has reason to know is false, fictitious, or fraudulent, or who engages in other covered conduct. That statute permits a civil penalty of not more than $5,000 for each such claim, in addition to any other remedy prescribed by law. VA implemented this penalty amount in 38 CFR 42.3(a)(1)(iv) and (b)(1)(ii). Because no 2026 adjustment multiplier exists, VA is not revising either set of regulatory provisions.

The determination was approved by Douglas A. Collins, Secretary of Veterans Affairs, on July 7, 2026, and the notice was filed with the Office of the Federal Register on July 10, 2026.

Education Department Corrects Comment Deadline

In a separate administrative action, the Department of Education issued a correction to a previously published notice on Foreign Gifts and Contracts Disclosures (Docket No. ED-2026-SCC-1354). The correction fixes an error in the DATES section of a notice that originally appeared on pages 39088–39089 of the Federal Register on Monday, June 29, 2026: the date listed as "June 29, 2026" in that section should read "July 29, 2026."

What to Watch

• July 29, 2026 — Corrected deadline for comments on the Department of Education's Foreign Gifts and Contracts Disclosures information collection submission (Docket No. ED-2026-SCC-1354).

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