On Monday, March 24, 2014, the Office of the Comptroller of Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, 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”). An AMC is an entity that serves as an intermediary between appraisers and lenders and provides appraisal management services.
In accordance with Section 1124 of the Financial Institution Reform, Recovery, and Enforcement Act of 1989, as added by Section 1473 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, 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 AMCs.
Under Section 1124, beginning 36 months after the issuance of the final AMC rule, an AMC will not be able to provide services for a Federally related transaction in a state unless the AMC is registered with the state or is subject to oversight by a Federal financial institutions regulatory agency. The proposed rule would not compel a state to establish an AMC registration and supervision program, and there is no penalty imposed on a state that does not establish a regulatory structure for AMCs within 36 months after the issuance of the final AMC rule. However, unless such a regulatory structure is established in a state, an AMC in that state will be barred by Section 1124 from providing appraisal management services for Federally related transactions.