Six regulatory agencies (the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, the Federal Housing Finance Agency, and the National Credit Union Administration) issued a proposed rule that would implement minimum requirements for state registration and supervision of appraisal management companies (AMCs).
The minimum requirements in the proposed rule would apply to states that elect to establish an appraiser certifying and licensing agency with the authority to register and supervise appraisal management companies. The proposed rule would not compel a state to establish an appraisal management companies registration and supervision program, and there is no penalty imposed on a state that does not establish a regulatory structure for appraisal management companies. However, an AMC is barred by section 1124 from providing appraisal management services for federally related transactions in a state that has not established such a regulatory structure.
Under the proposed rule, participating states would require that an AMC:[list line=”no” style=”style3″]
- Register in the state and be subject to supervision;
- Use only state-certified or licensed appraisers for federally related transactions;
- Require that appraisals comply with the Uniform Standards of Professional Appraisal Practice;
- Ensure selection of a competent and independent appraiser; and
- Establish and comply with processes and controls under the appraisal independence standards established under the Truth in Lending Act.
The proposed rule also would require certifying and licensing agencies of a participating state have certain authorities, including the authority to:[list line=”no” style=”style3″]
- Approve or deny initial AMC registration applications and applications for renewals;
- Examine the AMC and require the AMC to submit information to the state;
- Verify that the appraisers on the AMC’s appraiser network or panel hold valid state certifications or licenses;
- Conduct investigations of AMCs to assess potential violations of appraisal-related laws;
- Discipline an AMC that violates appraisal-related laws; and
- Report an AMC’s violation of appraisal-related laws, disciplinary and enforcement actions, and other information about an AMC’s operations to the Appraisal Subcommittee of the Federal Financial Institutions Examination Council.
The proposed rule would provide states 36 months after its effective date to implement the minimum requirements. In conjunction with the proposal, the Federal Deposit Insurance Corporation is proposing to rescind appraisal regulations promulgated by the former Office of Thrift Supervision (OTS). The OTS appraisal regulations are duplicative of the FDIC’s appraisal regulations in Part 323. Similarly, in a separate rulemaking, the Office of the Comptroller of the Currency is rescinding appraisal regulations promulgated by the former OTS.
The agencies are seeking comments from the public on all aspects of the proposal. The public will have 60 days to review and comment on the proposal and the proposed Paperwork Reduction Act analysis. The proposal and information on commenting can be viewed in the Federal Register.