On April 30, 2015, six federal financial regulatory agencies—the US Board of Governors of the Federal Reserve System, the US Consumer Financial Protection Bureau, the US Federal Deposit Insurance Corporation, the US Federal Housing Finance Agency, the National Credit Union Administration, and the US Office of the Comptroller of the Currency—jointly issued a final rule implementing minimum requirements for state registration and supervision of Appraisal Management Companies. AMCs are entities that provide appraisal management services to lenders, underwriters or other principals participating in the secondary mortgage markets. AMCs provide services that include but are not limited to, conducting real-estate appraisals, property tax assessments and providing other appraisal reports to lenders, underwriters or other principals in connection with financial transactions.

The final rule would allow states to elect to register and supervise AMCs. In the event that a state does not adopt a regulatory structure for AMCs within 36 months from the effective date of the final rule, any AMC in that state that is not separately regulated on a federal level will be barred from providing appraisal management services for federally-related transactions (which are generally real estate-related financial transactions that involve an FDIC-insured institution and require the services of an appraiser). This restriction will be lifted if the state subsequently adopts a regulatory structure for AMCs. States that elect to participate in the regulatory structure for AMCs must establish certain minimum requirements applicable to the registration and supervision of AMCs. Under this structure, a federally-regulated AMC (i.e. an AMC that is a subsidiary of an insured depository institution and is regulated by a federal financial institution regulatory agency) would be subject to the same minimum requirements as state-regulated AMCs, except that federally-regulated AMCs would be exempt from the requirement to register with a state.

The final rule will become effective 60 days after publication in the Federal Register. The compliance deadline for federally-regulated AMCs is no later than 12 months from the effective date of the final rule. Participating states may separately specify the compliance deadline for state-regulated AMCs.

The Federal Reserve Board’s press release is available at: http://www.federalreserve.gov/newsevents/press/bcreg/20150430a.htm.