Minimum Requirements for Appraisal Management Companies, 19521-19543 [2014-06860]

Agencies

• FEDERAL DEPOSIT INSURANCE CORPORATION
• FEDERAL RESERVE SYSTEM
• Office of the Comptroller of the Currency
• DEPARTMENT OF THE TREASURY
• FEDERAL HOUSING FINANCE AGENCY
• BUREAU OF CONSUMER FINANCIAL PROTECTION

[Federal Register Volume 79, Number 68 (Wednesday, April 9, 2014)]
[Proposed Rules]
[Pages 19521-19543]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-06860]



[[Page 19521]]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 34

[Docket No. OCC-2014-0002]
RIN 1557-AD64

FEDERAL RESERVE SYSTEM

12 CFR Parts 208 and 225

[Docket No. R-1486]
RIN 7100-AE15

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Parts 323 and 390

RIN 3064-AE10

BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1026

[Docket No. CFPB 2014-0006]
RIN 3170-AA44

FEDERAL HOUSING FINANCE AGENCY

12 CFR Part 1222

RIN 2590-AA61


Minimum Requirements for Appraisal Management Companies

AGENCY: Office of the Comptroller of the Currency, Treasury (OCC); 
Board of Governors of the Federal Reserve System (Board); Federal 
Deposit Insurance Corporation (FDIC); National Credit Union 
Administration (NCUA); Bureau of Consumer Financial Protection 
(Bureau); and Federal Housing Finance Agency (FHFA).

ACTION: Joint notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The OCC, Board, FDIC, NCUA, Bureau, and FHFA (collectively, 
the Agencies) are jointly proposing a rule to implement the minimum 
requirements in the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (the Dodd-Frank Act or Act) to be applied by States in 
the registration and supervision of appraisal management companies 
(AMCs). The proposed rule also implements the requirement in the Dodd-
Frank Act for States to report to the Appraisal Subcommittee of the 
Federal Financial Institutions Examination Council (FFIEC) the 
information required by the Appraisal Subcommittee (ASC) to administer 
the new national registry of appraisal management companies (AMC 
National Registry or Registry). In conjunction with this 
implementation, the FDIC is proposing to integrate its appraisal 
regulations for State nonmember banks and State savings associations.

DATES: Comments must be received on or before June 9, 2014.

ADDRESSES: Interested parties are encouraged to submit written comments 
jointly to all of the Agencies. Commenters are encouraged to use the 
title ``Minimum Requirements for Appraisal Management Companies'' to 
facilitate the organization and distribution of comments among the 
Agencies. Interested parties are invited to submit written comments to:
    OCC: Because paper mail in the Washington, DC area and at the OCC 
is subject to delay, commenters are encouraged to submit comments by 
the Federal eRulemaking Portal or email, if possible. Please use the 
title ``Minimum Requirements for Appraisal Management Companies'' to 
facilitate the organization and distribution of the comments. You may 
submit comments by any of the following methods:
     Federal eRulemaking Portal--``regulations.gov'': Go to 
https://www.regulations.gov. Enter ``Docket ID OCC-2014-0002'' in the 
Search Box and click ``Search''. Results can be filtered using the 
filtering tools on the left side of the screen. Click on ``Comment 
Now'' to submit public comments.
     Click on the ``Help'' tab on the Regulations.gov home page 
to get information on using Regulations.gov, including instructions for 
submitting public comments.
     Email: regs.comments@occ.treas.gov.
     Mail: Legislative and Regulatory Activities Division, 
Office of the Comptroller of the Currency, 400 7th Street SW., Suite 
3E-218, Mail Stop 9W-11, Washington, DC 20219.
     Hand Delivery/Courier: 400 7th Street SW., Suite 3E-218, 
Mail Stop 9W-11, Washington, DC 20219.
     Fax: (571) 465-4326.
    Instructions: You must include ``OCC'' as the agency name and 
``Docket ID OCC-2014-0002'' in your comment. In general, the OCC will 
enter all comments received into the docket and publish those comments 
on the Regulations.gov Web site without change, including any business 
or personal information that you provide such as name and address 
information, email addresses, or phone numbers. Comments received, 
including attachments and other supporting materials, are part of the 
public record and subject to public disclosure. Do not enclose any 
information in your comment or supporting materials that you consider 
confidential or inappropriate for public disclosure.
    You may review comments and other related materials that pertain to 
this rulemaking action by any of the following methods:
     Viewing Comments Electronically: Go to https://www.regulations.gov. Enter ``Docket ID OCC-2014-0002'' in the Search 
box and click ``Search''. Comments can be filtered by Agency using the 
filtering tools on the left side of the screen.
     Click on the ``Help'' tab on the Regulations.gov home page 
to get information on using Regulations.gov, including instructions for 
viewing public comments, viewing other supporting and related 
materials, and viewing the docket after the close of the comment 
period.
     Viewing Comments Personally: You may personally inspect 
and photocopy comments at the OCC, 400 7th Street SW., Washington, DC. 
For security reasons, the OCC requires that visitors make an 
appointment to inspect comments. You may do so by calling (202) 649-
6700. Upon arrival, visitors will be required to present valid 
government-issued photo identification and to submit to security 
screening in order to inspect and photocopy comments.
     Docket: You may also view or request available background 
documents and project summaries using the methods described above.
    Board: Follow the instructions for submitting comments at https://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Email: regs.comments@federalreserve.gov. Include the 
docket number in the subject line of the message.
     Fax: (202) 452-3819 or (202) 452-3102.
     Mail: Address to Robert deV. Frierson, Secretary, Board of 
Governors of the Federal Reserve System, 20th Street and Constitution 
Avenue NW., Washington, DC 20551. All public

[[Page 19522]]

comments will be made available on the Board's Web site at https://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as submitted, 
unless modified for technical reasons. Accordingly, comments will not 
be edited to remove any identifying or contact information. Public 
comments may also be viewed electronically or in paper in Room MP-500 
of the Board's Martin Building (20th and C Streets NW.) between 9:00 
a.m. and 5:00 p.m. on weekdays.
    FDIC: You may submit comments by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Agency Web site: https://www.FDIC.gov/regulations/laws/federal/propose.html.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th 
Street NW., Washington, DC 20429.
     Hand Delivered/Courier: The guard station at the rear of 
the 550 17th Street Building (located on F Street), on business days 
between 7:00 a.m. and 5:00 p.m.
     Email: comments@FDIC.gov. Comments submitted must include 
``FDIC'' and ``RIN 3064-AE10.'' Comments received will be posted 
without change to https://www.FDIC.gov/regulations/laws/federal/propose.html, including any personal information provided.
    NCUA: You may submit comments, identified by RIN 3133-AE22 by any 
of the following methods (Please send comments by one method only):
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     NCUA Web site: https://www.ncua.gov/Legal/Regs/Pages/PropRegs.aspx. Follow the instructions for submitting comments.
     Email: Address to regcomments@ncua.gov. Include ``[Your 
name] Comments on Minimum Requirements for Appraisal Management 
Companies'' in the email subject line.
     Fax: (703) 518-6319. Use the subject line described above 
for email.
     Mail: Address to Gerard Poliquin, Secretary of the Board, 
National Credit Union Administration, 1775 Duke Street, Alexandria, 
Virginia 22314-3428.
     Hand Delivery/Courier in Lieu of Mail: Same as mail 
address.
    You can view all public comments on NCUA's Web site at https://www.ncua.gov/Legal/Regs/Pages/PropRegs.aspx as submitted, except for 
those we cannot post for technical reasons. NCUA will not edit or 
remove any identifying or contact information from the public comments 
submitted. You may inspect paper copies of comments in NCUA's law 
library at 1775 Duke Street, Alexandria, Virginia 22314, by appointment 
weekdays between 9:00 a.m. and 3:00 p.m. To make an appointment, call 
(703) 518-6546 or send an email to OGCMail@ncua.gov.
    Bureau: You may submit comments, identified by Docket No. CFPB-
2014-0006 or RIN 3170-AA44, by any of the following methods:
     Electronic: https://www.regulations.gov. Follow the 
instructions for submitting comments.
     Mail: Monica Jackson, Office of the Executive Secretary, 
Bureau of Consumer Financial Protection, 1700 G Street NW., Washington, 
DC 20552.
     Hand Delivery/Courier in Lieu of Mail: Monica Jackson, 
Office of the Executive Secretary, Bureau of Consumer Financial 
Protection, 1700 G Street NW., Washington, DC 20552.
    All submissions must include the agency name and docket number or 
Regulatory Information Number (RIN) for this rulemaking. In general, 
all comments received will be posted without change to https://www.regulations.gov. In addition, comments will be available for public 
inspection and copying at 1700 G Street NW., Washington, DC 20552, on 
official business days between the hours of 10 a.m. and 5 p.m. Eastern 
Time. You can make an appointment to inspect the documents by 
telephoning (202) 435-7275.
    All comments, including attachments and other supporting materials, 
will become part of the public record and subject to public disclosure. 
Sensitive personal information, such as account numbers or social 
security numbers, should not be included. Comments will not be edited 
to remove any identifying or contact information.
    FHFA: You may submit your comments, identified by regulatory 
information number (RIN) 2590-AA61, by any of the following methods:
     Email: Comments to Alfred M. Pollard, General Counsel, may 
be sent by email to RegComments@fhfa.gov. Please include ``RIN 2590-
AA61'' in the subject line of the message.
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments. If you submit your 
comment to the Federal eRulemaking Portal, please also send it by email 
to FHFA at RegComments@fhfa.gov to ensure timely receipt by FHFA. 
Please include ``RIN 2590-AA61'' in the subject line of the message.
     Hand Delivered/Courier: The hand delivery address is: 
Alfred M. Pollard, General Counsel, Attention: Comments/RIN 2590-AA61, 
Federal Housing Finance Agency, Eighth Floor, 400 Seventh Street SW., 
Washington, DC 20024. Deliver the package to the Seventh Street 
entrance Guard Desk, First Floor, on business days between 9 a.m. to 5 
p.m.
     U.S. Mail, United Parcel Service, Federal Express, or 
Other Mail Service: The mailing address for comments is: Alfred M. 
Pollard, General Counsel, Attention: Comments/RIN 2590-AA61, Federal 
Housing Finance Agency, Eighth Floor, 400 Seventh Street SW., 
Washington, DC 20024.
    Copies of all comments will be posted without change, including any 
personal information you provide, such as your name, address (mailing 
and email), and phone number, on the FHFA Web site at https://www.fhfa.gov. In addition, copies of all comments received will be 
available for examination by the public on business days between the 
hours of 10 a.m. and 3 p.m., Eastern Time, at the Federal Housing 
Finance Agency, Eighth Floor, 400 Seventh Street SW., Washington, DC 
20024. To make an appointment to inspect comments, please call the 
Office of General Counsel at (202) 649-3804.

FOR FURTHER INFORMATION CONTACT: OCC: Robert L. Parson, Appraisal 
Policy Specialist, (202) 649-6423, G. Kevin Lawton, Appraiser (Real 
Estate Specialist), (202) 649-7152, Mitchell E. Plave, Special Counsel, 
or Charlotte M. Bahin, Senior Counsel, Legislative & Regulatory 
Activities Division, (202) 649-5490, for persons who are deaf or hard 
of hearing, TTY, (202) 649-5597, or Christopher Manthey, Special 
Counsel, Bank Activities and Structure Division, (202) 649-5500.
    Board: Carmen Holly, Supervisory Financial Analyst, Division of 
Banking Supervision and Regulation, at (202) 973-6122, Walter McEwen, 
Senior Counsel, Legal Division, at (202) 452-3321, or Will C. Giles, 
Counsel, Legal Division, at (202) 452-3351, Board of Governors of the 
Federal Reserve System, Washington, DC 20551.
    FDIC: Beverlea S. Gardner, Senior Examination Specialist, Division 
of Risk Management and Supervision, at (202) 898-3640, Sandra S. 
Barker, Senior Policy Analyst, Division of Consumer Protection, at 
(202) 898-3915, Mark Mellon, Counsel, Legal Division, at (202) 898-
3884, Kimberly Stock, Counsel, Legal Division, at (202) 898-3815, or 
Benjamin K. Gibbs, Senior

[[Page 19523]]

Regional Attorney, at (678) 916-2458, Federal Deposit Insurance 
Corporation, 550 17th Street NW., Washington, DC 20429.
    NCUA: John Brolin or Pamela Yu, Staff Attorneys, Office of General 
Counsel, at (703) 518-6540, or Vincent Vieten, Program Officer, Office 
of Examination and Insurance, at (703) 518-6360, or 1775 Duke Street, 
Alexandria, Virginia 22314.
    Bureau: Owen Bonheimer, Counsel, Office of Regulations, David 
Friend, Counsel, Office of Regulations, or Connor Raso, Attorney-
Advisor, Legal Division, 1700 G Street NW., Washington, DC 20552, at 
(202) 435-7000.
    FHFA: Robert Witt, Senior Policy Analyst, Office of Housing and 
Regulatory Policy, (202) 649-3128, or Ming-Yuen Meyer-Fong, Assistant 
General Counsel, Office of General Counsel, (202) 649-3078, Federal 
Housing Finance Agency, 400 Seventh Street SW., Washington, DC 20024.

SUPPLEMENTARY INFORMATION:

I. Background

AMC Minimum Requirements

    On July 21, 2010, the Dodd-Frank Act \1\ was signed into law. 
Section 1473 of the Dodd-Frank Act added a new section 1124 to Title XI 
of the Financial Institutions Reform, Recovery, and Enforcement Act of 
1989 (FIRREA) \2\ and established minimum requirements to be applied by 
States in the registration and supervision of AMCs. An AMC is an entity 
that serves as an intermediary for, and provides certain services to, 
appraisers and lenders.\3\ These minimum requirements apply to States 
that have elected to establish, pursuant to section 1117 of FIRREA,\4\ 
an appraiser certifying and licensing agency with authority to register 
and supervise AMCs (participating States). Section 1473 of the Dodd-
Frank Act \5\ also created the AMC National Registry, which will be 
administered by the ASC, and requires participating States to report 
AMC registration information to the ASC to support the Registry.\6\ The 
AMC National Registry will include AMCs that are either: (1) Registered 
with, and subject to supervision of, a State appraiser certifying and 
licensing agency; or (2) subsidiaries owned and controlled by an 
insured depository institution or an insured credit union and regulated 
by a Federal financial institutions regulatory agency.
---------------------------------------------------------------------------

    \1\ Public Law 111-203, 124 Stat. 1376.
    \2\ Public Law 101-73, 103 Stat. 183; 12 U.S.C. 3353.
    \3\ The term ``appraisal management company'' is defined in more 
detail in section 1121 of Title XI of FIRREA, 12 U.S.C. 3350(11), 
and in proposed Sec.  34.211(c).
    \4\ 12 U.S.C. 3346.
    \5\ Hereafter, section references are to Title XI of FIRREA 
unless otherwise noted.
    \6\ 12 U.S.C. 3332(a)(6); 3338(a)(3); 3353(e).
---------------------------------------------------------------------------

    Under section 1124, participating States must require that AMCs: 
(1) Register with, and be subject to, supervision by the State 
appraiser certifying and licensing agency in the State or States in 
which such company operates; (2) verify that only State-certified or 
State-licensed appraisers are used for Federally related transactions; 
\7\ (3) require that appraisals comply with the Uniform Standards of 
Professional Appraisal Practice (USPAP); and (4) require that 
appraisals are conducted in accordance with the statutory appraisal 
independence standards under the Truth in Lending Act (TILA) (15 U.S.C. 
1639e) and implementing regulations.\8\ An AMC that is a subsidiary 
owned and controlled by an insured depository institution or an insured 
credit union, and that is regulated by a Federal financial institutions 
regulatory agency is subject to all of the minimum requirements, except 
the requirement to register with a State. The minimum requirements will 
apply to any AMC that provides appraisal management services, as 
defined in the proposed regulation, and meets the statutory size 
threshold, which is that the AMC oversees an appraiser panel of more 
than 15 State-certified or State-licensed appraisers in a State or of 
25 or more appraisers nationally in a given year. States may establish 
requirements for AMC registration and supervision that are in addition 
to these minimum requirements.\9\
---------------------------------------------------------------------------

    \7\ Under FIRREA, a Federally related transaction is a real 
estate related financial transaction that involves an institution 
regulated by the OCC, Board, FDIC, or NCUA and that requires the 
services of an appraiser under the interagency appraisal rules. OCC: 
12 CFR part 34, subpart C and 12 CFR part 164; Board: 12 CFR part 
208, subpart E and 12 CFR part 225, subpart G; FDIC: 12 CFR part 
323; and NCUA: 12 CFR part 722.
    \8\ See Board: 12 CFR 226.42; Bureau: 12 CFR 1026.42.
    \9\ 12 U.S.C. 3353(b).
---------------------------------------------------------------------------

    Under section 1124, beginning 36 months from the time the Agencies 
issue the final AMC rule, an AMC may not 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. This effectively allows each State up 
to 36 months to set up registration and supervision systems that meet 
the requirements of the final rule. The ASC, with the approval of the 
FFIEC, may extend the 36-month deadline for an additional 12 months if 
the ASC makes a finding that the State has made substantial progress 
toward implementation of a system that meets the criteria in the final 
rule.
    Section 1124 does not compel a State to establish an AMC 
registration and supervision program, nor is there a penalty imposed on 
a State that does not establish a regulatory structure for AMCs within 
36 months of issuance of the final AMC rule. However, in such a State, 
unless and until it establishes such a regulatory structure, AMCs are 
barred by section 1124 from providing appraisal management services for 
Federally related transactions.\10\
---------------------------------------------------------------------------

    \10\ 12 U.S.C. 3353(f)(1). Under section 1124, this restriction 
will not apply to AMCs that are subsidiaries owned and controlled by 
an insured depository institution or an insured credit union, and 
regulated by a Federal financial institutions regulatory agency. 
Such AMCs are subject to all the requirements of section 1124, with 
the exception of the requirement to register with a State.
---------------------------------------------------------------------------

    Under section 1124 of Title XI, the Agencies must establish, by 
rule, minimum requirements to be imposed by a participating State 
appraiser certifying and licensing agency on AMCs doing business in the 
State.\11\ The statute also directs the Agencies to issue regulations 
that identify certain activities of AMCs that participating State 
appraiser certifying and licensing agencies should report to the ASC. 
This proposed rule implements these statutory requirements.
---------------------------------------------------------------------------

    \11\ 12 U.S.C. 3353(a).
---------------------------------------------------------------------------

Consolidation of FDIC and OTS Rules on Appraisals

    Title III of the Dodd-Frank Act transferred the powers, duties, and 
functions formerly performed by the Office of Thrift Supervision (OTS), 
the Federal entity formerly responsible for the supervision of 
federally insured savings associations and their holding companies, to 
the FDIC for State savings associations and authorized the FDIC to 
consolidate OTS and FDIC rules.\12\ This proposed rule implements this 
authority by rescinding the OTS regulatory provisions on appraisals 
pertaining to State savings associations as such associations are 
covered by the FDIC's existing appraisal rules.
---------------------------------------------------------------------------

    \12\ The OTS was abolished on October 19, 2011.
---------------------------------------------------------------------------

II. The Proposed Rule

    The Agencies are issuing this proposal to implement the minimum 
requirements for registration and supervision of AMCs in the Dodd-Frank 
Act, Title XIV, Subtitle F (Appraisal Activities). As required by the 
Dodd-Frank Act, this proposal was developed jointly by the OCC, the 
Board, the FDIC, the Bureau, the FHFA, and the NCUA. The proposed rule 
would: (1) Establish

[[Page 19524]]

the minimum requirements in section 1473 of the Dodd-Frank Act for 
registration of AMCs; (2) establish the minimum requirements for AMCs 
that register with the State under section 1473 of the Dodd-Frank Act; 
(3) require Federally regulated AMCs to meet the minimum requirements 
of section 1473 (other than registering with the State); and (4) 
require the reporting of certain AMC information to the ASC. The 
proposed rule is being published in the CFR separately by the OCC, the 
Board, the FDIC, and the FHFA. No substantive difference between the 
rules is intended. The proposed rule would also integrate FDIC 
appraisal regulations for State nonmember banks and State savings 
associations.

Key Definitions

    Appraisal management company. Proposed Sec.  34.211(c) \13\ defines 
an AMC as a person \14\ that: (1) provides appraisal management 
services to creditors or secondary mortgage market participants; (2) 
provides such services in connection with valuing a consumer's 
principal dwelling as security for a consumer credit transaction 
(including consumer credit transactions incorporated into 
securitizations); and (3) within a given year, oversees an appraiser 
panel of more than 15 State-certified or State-licensed appraisers in a 
State or 25 or more State-certified or State-licensed appraisers in two 
or more States. The proposed definition cross-references proposed Sec.  
34.212 for the rules on how to calculate the numeric threshold for the 
appraiser panel.
---------------------------------------------------------------------------

    \13\ For ease of reference, the preamble refers to section 
numbers in the proposed rule text for the OCC.
    \14\ The proposed rule incorporates the definition of ``person'' 
from Regulation Z, which defines a person as ``a natural person or 
an organization, including a corporation, partnership, 
proprietorship, association, cooperative, estate, trust, or 
government unit.'' 12 CFR 1026.2(22).
---------------------------------------------------------------------------

    Securitization within the definition of appraisal management 
company. The proposed definition of AMC applies to appraisal management 
services provided in connection with residential mortgage transactions 
and securitizations involving residential mortgages. The proposed rule 
does not extend to appraisal management services provided in connection 
with commercial real estate transactions or securitizations involving 
commercial real estate mortgages. In drafting the definition of AMC for 
the proposal, the Agencies considered whether the statutory definition 
of AMC in section 1121 should be construed to encompass not only 
appraisal management services provided for securitizations of 
residential mortgages, but also appraisal services in connection with 
securitizations of commercial mortgages.
    The Agencies' reading of the statute--that it only extends to 
residential mortgage transactions and securitizations involving 
residential mortgages--is consistent with the text of section 1124 and 
of other relevant portions of the Dodd-Frank Act taken as a whole. Non-
residential or commercial mortgages are not mentioned in any AMC 
provisions in section 1473 (or elsewhere in Title XIV of the Dodd-Frank 
Act). The lack of a reference to commercial mortgage lending in the 
relevant Dodd-Frank Act provisions suggests that AMCs were not intended 
to be covered by the AMC minimum requirements when they are providing 
appraisal management services for underwriters or other principals of 
commercial mortgage securitizations. Moreover, the Agencies understand 
that individual appraisers, as opposed to AMCs, are more typically 
retained to provide an appraisal of properties that will be included in 
securitizations of commercial mortgage loans because of the size and 
complexity of those properties.\15\
---------------------------------------------------------------------------

    \15\ This understanding is based on the supervisory experience 
of the Agencies as well as outreach to a major trade association for 
AMCs and a large AMC, which confirmed that, under the current 
business model, AMCs do not generally provide services in connection 
with securitizations of commercial mortgages.
---------------------------------------------------------------------------

    ``External third party'' within the definition of appraisal 
management company. Section 1121 defines an AMC as any ``external third 
party'' authorized to take certain actions by a creditor of a consumer 
credit transaction secured by a consumer's principal dwelling or by an 
underwriter of or other principal in the secondary mortgage 
markets.\16\ Consistent with the statutory definition, the proposal 
would define the term AMC to exclude a department or division of an 
entity when such department or division provides appraisal management 
services only to that entity. These departments or divisions are not 
``external third parties'' as required by the statute. An AMC that is 
an affiliate (rather than a department or division) of a creditor or 
secondary market principal, however, would be treated as an AMC under 
the proposed rule, even if the AMC provides appraisal management 
services only to the entity with which it is affiliated, because the 
affiliate is a separate legal entity.
---------------------------------------------------------------------------

    \16\ 12 U.S.C. 3350(11).
---------------------------------------------------------------------------

    The Agencies believe that this interpretation is consistent with 
the plain meaning of ``external'' and ``third party,'' as well as with 
section 1124(c), which by its terms contemplates that the requirements 
of section 1124 would apply to subsidiaries of financial institutions. 
In the Agencies' view, this interpretation is also consistent with 
section 1124 as a whole, which is directed at regulating parties that 
provide appraisal management services on behalf of creditors and 
secondary market principals, but does not regulate creditors or 
secondary market principals directly.
    Question 1. The Agencies request comment on all aspects of the 
proposed definition of AMC.
    Appraisal management services. Proposed Sec.  34.211(d) defines 
``appraisal management services'' to mean one or more of the following: 
(1) recruiting, selecting, and retaining appraisers; (2) contracting 
with State-certified or State-licensed appraisers to perform appraisal 
assignments; (3) managing the process of having an appraisal performed, 
including providing administrative duties such as receiving appraisal 
orders and appraisal reports, submitting completed appraisal reports to 
creditors and secondary mortgage market participants, collecting fees 
from creditors and secondary mortgage market participants for services 
provided, and paying appraisers for services performed; or (4) 
reviewing and verifying the work of appraisers. This definition 
reflects the appraisal management services outlined in the definition 
of AMC in section 1121.
    Appraiser panel. The definition of AMC in section 1473 of the Dodd-
Frank Act provides that an entity will be treated as an AMC for 
purposes of State registration if it has an ``appraiser network or 
panel'' of more than 15 State-certified or State-licensed appraisers in 
a State or 25 or more nationally within a given year. Section 1473 does 
not specify whether a ``network or panel'' consists of employees of an 
AMC or independent contractors retained by the AMC (or both). To help 
address this issue, the Agencies conducted outreach with associations 
that represent AMCs and appraisers to gather information about the AMC 
business model. The Agencies also conducted outreach with State 
appraiser certifying and licensing agencies to gather information on 
the experience of States that have adopted AMC laws that define 
``appraiser panel.'' \17\
---------------------------------------------------------------------------

    \17\ The Agencies conducted outreach in 2013 with State 
appraiser certifying and licensing agencies through the Association 
of Appraisal Regulatory Officials (AARO), see https://www.aaro.net/.

---------------------------------------------------------------------------

[[Page 19525]]

    Based on this outreach, the Agencies understand that a majority of 
States that have adopted AMC laws define ``appraiser panel'' as being 
comprised of independent contractors.\18\ A minority of States use a 
broader definition for ``appraiser panel'' that encompasses a 
combination of independent contractors and employees.\19\ The majority 
approach is consistent with the model AMC code offered by a trade 
association for appraisers and the minority approach is consistent with 
a model code offered by a trade association for AMCs.
---------------------------------------------------------------------------

    \18\ See, e.g., N.C. Gen. Stat. section 93E-2-2 (defining an 
appraiser panel as a network or panel of appraisers who are 
independent contractors to the AMC); Vernon's Tex. Code Ann. 
Occupations Code section 1104.003(b)(3) (same); Louisiana La. Rev. 
Stat. Ann section 37:3415.2(a) (same); see also Ohio (draft code) 
(same).
    \19\ See, e.g., Cal. Bus. & Prof. Code section 11302 (defining 
AMC to include both independent contractors and employees); Ark. 
Code Ann. section 17-14-402(2) (same); Ky. Rev, Stat. section 
324A.150(2)(same).
---------------------------------------------------------------------------

    Proposed Sec.  34.211(e) defines an appraiser network or panel as a 
network of State-licensed or State-certified appraisers who are 
independent contractors to an AMC. This definition reflects the 
approach taken by the majority of States that have adopted AMC 
registration laws or have proposed such laws, as discussed above. The 
proposed definition of appraiser panel also reflects the Agencies' 
understanding, based on the outreach, that AMCs typically engage 
appraisers as independent contractors under the current AMC business 
model, rather than having employees perform appraisals. Proposed Sec.  
34.211(e) also reflects the definition of appraisal management company 
in section 1121, which outlines typical tasks carried out by AMCs, such 
as contracting with State-licensed or State-certified appraisers. This 
definition of AMC and its description of appraisal management services 
do not include performing appraisals.
    Although the Agencies believe that defining an ``appraiser network 
or panel'' as including independent contractors is consistent with the 
Dodd-Frank Act and the current business model of AMCs, the Agencies, in 
conjunction with the ASC, will monitor AMCs to assess whether they are 
hiring appraisers as part-time employees to avoid State registration 
requirements. Outreach with State officials did not indicate this is 
currently occurring or at significant risk of occurring.
    Question 2. The Agencies request comment on the proposed definition 
of ``appraiser network or panel'' and on the alternative of defining 
this term to include employees as well as independent contractors. The 
Agencies also request comment on whether the term ``independent 
contractor'' should be defined, and if so why and how, including 
whether it should be defined based upon Federal law (e.g., using the 
standards issued by the Internal Revenue Service \20\ or standards 
adopted in other Federal regulations, such as those issued under the 
Secure and Fair Enforcement for Mortgage Licensing Act \21\ (S.A.F.E. 
Act)),\22\ or left to State law (so as to be consistent with existing 
AMC laws).
---------------------------------------------------------------------------

    \20\ See, e.g., IRS Publication 1779, ``Independent Contractor 
or Employee,'' available at https://www.irs.gov/pub/irs-pdf/p1779.pdf; IRS Publication 15-A, ``Employer's Supplemental Tax 
Guide,'' at p. 7 et seq. (discussing factors for distinguishing 
employees from independent contractors), available at https://www.irs.gov/pub/irs-pdf/p15a.pdf.
    \21\ 12 CFR 1008.23 (``Independent contractor means an 
individual who performs his or her duties other than at the 
direction of and subject to the supervision and instruction of an 
individual . . .''). The term ``independent contractor'' is 
distinguished from ``employee,'' which is defined as an individual 
(1) whose manner and means of performance of work are subject to the 
right of control of, or are controlled by, a person, and (2) whose 
compensation for Federal income tax purposes is reported, or 
required to be reported, on a W-2 form issued by the controlling 
person.).
    \22\ The S.A.F.E. Act was enacted as part of the Housing and 
Economic Recovery Act of 2008, Public Law 110-289, Division A, Title 
V, sections 1501-1517, 122 Stat. 2654, 2810-2824 (July 30, 2008), 
codified at 12 U.S.C. 5101-5116.
---------------------------------------------------------------------------

    Appraisal firms. An appraisal firm is a firm that is engaged to 
perform appraisals. Section 1473 of the Dodd-Frank Act appears to 
distinguish AMCs that contract with others to perform appraisals from 
appraisal firms that are comprised of groups of appraisers that perform 
appraisals as part of a single firm or partnership. For the following 
reasons, the Agencies believe that appraisal firms should not be 
treated as AMCs under section 1473.
    One basic reason to distinguish between AMCs and appraisal firms is 
that the business models of AMCs and appraisal firms are different. 
AMCs provide appraisal management services to third parties, including 
retaining appraisers to perform appraisals, but AMCs do not perform 
appraisals. This is a core characteristic of an AMC that distinguishes 
its model from appraisal firms, given that appraisal firms perform 
appraisals using one of the firm's employees or partners.\23\
---------------------------------------------------------------------------

    \23\ See, e.g., U.S. House of Reps., Comm. on Fin. Servs., 
Report on H.R. 1728, Mortgage Reform and Anti-Predatory Lending Act, 
No. 111-94, 75 (May 4, 2009) (noting that the AMC statutory 
provision would authorize the ASC to oversee companies that retain 
or contract with appraisers and manage the process of having an 
appraisal performed (appraisal management companies)).
---------------------------------------------------------------------------

    The text of section 1473 also reflects these difference in the 
business models of AMCs and appraisal firms. Section 1473 describes the 
duties of AMCs as including ``contracting with State-certified or 
State-licensed appraisers to perform appraisal assignments.'' While 
Congress could have explicitly included ``performing appraisal 
assignments'' in this list of business lines, it did not. Another basis 
for excluding appraisal firms from State AMC registration is that 
section 1124 uses the term ``Appraisal Management Company,'' which, 
again, is understood generally to refer to an entity that provides 
appraisal management services by retaining appraisers as independent 
contractors and not by performing appraisals.
    Given this statutory language, the proposal differentiates between 
entities that contract with appraisers to perform appraisals (such 
entities being AMCs), versus those whose employees directly perform 
appraisals (those entities being appraisal firms). For this reason, and 
for other reasons discussed above, the Agencies have proposed that 
business entities that perform appraisals should not be treated as AMCs 
for purposes of implementing the Dodd-Frank Act's State registration 
and supervision requirements, with the exception of a hybrid firm, as 
discussed below. Thus, the proposed regulation does not authorize 
participating States to require appraisal firms to register as AMCs or 
to require that appraisal firms be subject to supervision under the AMC 
registration and supervision programs implemented by the proposed 
regulation (again, however, with the exception of a hybrid firm).\24\
---------------------------------------------------------------------------

    \24\ The Agencies note that participating States would have 
authority, under their general power to regulate commerce within 
their borders, and not in implementation of this rule, to regulate 
appraisal firms.
---------------------------------------------------------------------------

    Hybrid firms or entities. The Agencies have considered the 
possibility that there are, or may be in the future, ``hybrid'' 
entities, meaning entities that both hire appraisers as employees to 
perform appraisals, and engage independent contractors to perform 
appraisals. In this situation, the entity could be considered both an 
AMC and an appraisal firm. In such a case, the entity should be treated 
as an AMC for purposes of State registration if it meets the numerical 
test (of overseeing more than 15 State-certified or State-licensed 
appraisers in a State or 25 or more State-certified or State-licensed 
appraisers in two or more States within a given year). The numerical 
calculation for hybrid entities should only include appraisers engaged 
as independent contractors.

[[Page 19526]]

    Question 3. The Agencies request comment on the distinction the 
Agencies have drawn between employees and independent contractors as a 
basis for exclusion of appraisal firms from the definition of an AMC.
    Covered transaction. The proposed rule applies to AMCs that provide 
appraisal management services relating to a ``covered transaction.'' 
Proposed Sec.  34.211(h) defines a covered transaction as any consumer 
credit transaction secured by the consumer's principal dwelling. The 
proposed definition does not limit the definition of ``covered 
transaction'' to Federally related transactions (generally, credit 
transactions involving a Federally regulated depository institution, 
see 12 U.S.C. 3350(4)), even though Title XI of FIRREA and its 
implementing regulations have historically applied only to appraisals 
for Federally related transactions.
    This interpretation is proposed to reflect the statutory text of 
section 1121(11), which defines the term ``appraisal management 
company'' in connection with ``valuing properties collateralizing 
mortgage loans or mortgages incorporated into a securitization.'' This 
interpretation is also consistent with the structure and text of other 
parts of section 1124, which distinguish between ``appraisals'' 
generally and appraisal services related specifically to Federally 
related transactions.\25\ Furthermore, the text of section 1124(a)(4) 
indicates that one of the chief purposes of the minimum requirements 
for AMCs is to ensure compliance with the appraisal independence 
standards established under section 129E of TILA.\26\ Those standards 
apply to AMCs whenever they engage in a consumer credit transaction 
secured by a principal dwelling, regardless of whether the transaction 
is a Federally related transaction.\27\
---------------------------------------------------------------------------

    \25\ See 12 U.S.C. 3353(a)(3) and (4); contra 12 U.S.C. 
3353(a)(2) and (f)(1).
    \26\ 12 U.S.C. 3353(a)(4).
    \27\ See 15 U.S.C. 1639e(a) (defining scope); 12 CFR 
1026.42(b)(1)-(2) (implementing regulations defining scope).
---------------------------------------------------------------------------

    For these reasons, the proposed rule would establish minimum 
requirements in participating States for all entities that meet the 
definition of AMC, regardless of whether the AMC participates in 
Federally related transactions.
    Federally regulated AMCs and Federally related transaction 
regulations. Under section 1124(c), an AMC that is a subsidiary owned 
and controlled by an insured depository institution or an insured 
credit union and that is regulated by a Federal financial institutions 
regulatory agency \28\ is not required to register with a State.\29\ 
Proposed Sec.  34.211(j) defines such an AMC as a ``Federally regulated 
AMC,'' meaning an AMC that is owned and controlled by an insured 
depository institution, as defined in 12 U.S.C. 1813, or an insured 
credit union, as defined in 12 U.S.C. 1752, and that is regulated by 
the OCC, Board, NCUA, or the FDIC.
---------------------------------------------------------------------------

    \28\ The term ``Federal financial institutions regulatory 
agencies'' means the Board, the FDIC, the OCC, the former OTS, and 
the NCUA. 12 U.S.C. 3350(6). Title III of the Dodd-Frank Act 
provides that the OCC is now the Federal financial institutions 
regulatory agency for Federal savings associations. Title III of the 
Dodd-Frank Act also provides that the FDIC is the Federal financial 
institutions regulatory agency for state savings associations. 
Finally, the Dodd-Frank Act provides that the Board is responsible 
for regulation of savings and loan holding companies.
    \29\ 12 U.S.C. 3353(c).
---------------------------------------------------------------------------

    A Federally regulated AMC must follow the minimum requirements that 
are applicable to State-registered AMCs and is subject to supervision 
for compliance with these standards by the appropriate Federal 
financial institutions regulatory agency. In addition, a Federally 
regulated AMC must report to the State or States in which it operates 
the information required to be submitted by the State to the ASC for 
inclusion of the AMC on the AMC National Registry.
    The NCUA, unlike the other banking agencies to this rulemaking, 
does not directly oversee or regulate any subsidiaries owned and 
controlled by credit unions, including AMC subsidiaries. Rather, the 
NCUA's regulations permit Federal credit unions to invest in or lend 
only to credit union service organizations (CUSOs) that conform to 
specific requirements outlined in part 712 of the NCUA's 
regulations.\30\ As explained above, the Agencies are interpreting 
section 1124(c) \31\ to apply only to AMC subsidiaries owned and 
controlled by an insured depository institution, or an insured credit 
union, and regulated by a Federal financial institutions regulatory 
agency. NCUA has not, historically, asserted that CUSOs or their 
employees are exempt from applicable State registration and licensing 
regimes, and this proposed rule would not alter that approach.\32\ Nor 
does NCUA directly regulate or oversee CUSOs owned by State-chartered 
credit unions. Accordingly, under the proposal, AMC CUSOs, whether 
owned by a State or Federally chartered credit union, are not 
considered to be regulated by a Federal financial institutions 
regulatory agency at this time and would be required to be registered 
in accordance with applicable State requirements.
---------------------------------------------------------------------------

    \30\ 12 CFR Part 712.
    \31\ 12 U.S.C. 3353(c).
    \32\ See 75 FR 44656, 44659 (July 28, 2010) (Applying similar 
reasoning to the licensing of mortgage loan originators who were 
employees of CUSOs under the Secure and Fair Enforcement for 
Mortgage Licensing Act of 2008).
---------------------------------------------------------------------------

    Question 4. The agencies request comment on whether references to 
the NCUA and insured credit unions should be removed from the 
definition of `Federally regulated AMC' and other parts of the final 
regulation to clarify that AMC CUSOs are subject to State registration 
and supervision.
    Proposed Sec.  34.211(k) defines ``Federally related transaction 
regulations'' to mean the regulations issued by the OCC, Board, FDIC, 
and NCUA pursuant to sections 1112, 1113, and 1114 of FIRREA Title XI, 
12 U.S.C. 3341-3343. These interagency regulations established certain 
safety and soundness standards for appraisals conducted in connection 
with lending by institutions regulated by the OCC, Board, FDIC, or 
NCUA. The Agencies added this definition to implement the minimum 
standard in section 1124(a)(2) that requires an AMC to verify that only 
certified or licensed appraisers are used for Federally related 
transactions.
    Secondary mortgage market participant. The term ``secondary 
mortgage market participant'' is used in the proposed regulation to 
implement the corresponding reference in the statute to ``an 
underwriter of or other principal in the secondary mortgage markets.'' 
Proposed Sec.  34.211(n) defines ``secondary mortgage market 
participant'' to mean a guarantor or insurer of mortgage-backed 
securities, or an underwriter or issuer of mortgage-backed securities. 
The definition includes individual investors in a mortgage-backed 
security only if they also serve in the capacity of a guarantor, 
insurer, underwriter, or issuer for the mortgage-backed security.
    Question 5. The Agencies request comment on the proposed definition 
of ``secondary mortgage market participant.'' Are the types of entities 
cited in the proposed definition appropriately included in this 
context? Should any other types of entities be expressly included or 
excluded from this definition, for the sake of clarity? Should any 
other types of entities be considered ``an underwriter or other 
principal in the secondary mortgage markets'' for the purpose of the 
definition of AMC in the Dodd-Frank Act?

[[Page 19527]]

Minimum AMC Requirements and Implementation Issues

    Method for assessing the number of appraisers on AMC panels. The 
proposed rule provides parameters for determining whether, within a 
given year, an AMC oversees an appraiser panel of more than 15 State-
certified or State-licensed appraisers in a State or 25 or more State-
certified or State-licensed appraisers in two or more States.\33\ Under 
the proposed rule, an appraiser is deemed part of the AMC's appraiser 
panel as of the earliest date the AMC accepts the appraiser for 
consideration for future appraisal engagements, or contracts with the 
appraiser to perform one or more appraisals on behalf of a creditor or 
secondary mortgage market principal, including an affiliate of such a 
creditor or principal.
---------------------------------------------------------------------------

    \33\ The Agencies recognize that States, in exercise of their 
general powers to license and regulate commerce within their borders 
and not in implementation of this rule, may choose to adopt 
registration provisions for AMCs that do not meet the size 
thresholds in the proposed rule.
---------------------------------------------------------------------------

    An appraiser who is considered to be part of the AMC's appraiser 
panel is deemed to remain on the panel until the date on which the AMC 
sends written notice to the appraiser removing the appraiser from the 
appraiser panel, with an explanation of its action; receives written 
notice from the appraiser asking to be removed from the appraiser 
panel; or receives notice of the death or incapacity of the appraiser. 
If an appraiser is removed from an AMC's appraiser panel, but the AMC 
subsequently re-admits the appraiser or engages the appraiser at any 
time during the twelve months after the appraiser's removal, the 
removal will be deemed not to have occurred, and the appraiser will be 
deemed to have been part of the AMC's appraiser panel without 
interruption. The Agencies believe that these procedural provisions 
will provide clarity to States and prevent circumvention of the 
registration requirement.
    Minimum requirements for State registration and supervision of 
AMCs. Under the proposed rule, participating States must have in place 
within the State appraiser certifying and licensing agency a licensing 
program that has authority to: (1) Review and approve or deny an AMC's 
application for initial registration; (2) review and renew or refuse to 
renew an AMC's registration periodically; (3) examine the books and 
records of an AMC operating in the State and require the AMC to submit 
reports, information, and documents to the State; (4) verify that the 
appraisers on the AMC's appraiser list, network, panel, or roster hold 
valid State certifications or licenses, as applicable; (5) conduct 
investigations of AMCs to assess potential violations of applicable 
appraisal-related laws, regulations, or orders; (6) discipline, 
suspend, terminate, and refuse to renew the registration of an AMC that 
violates applicable appraisal-related laws, regulations, or orders; and 
(7) report an AMC's violation of applicable appraisal-related laws, 
regulations, or orders, as well as disciplinary and enforcement actions 
and other relevant information about an AMC's operations, to the ASC.
    These proposed authorities and mechanisms reflect the Agencies' 
interpretation of the provisions of section 1124(a), including the 
minimum requirement in section 1124(a)(1) that AMCs be ``subject to 
supervision'' by the State agency.\34\ The Agencies interpret section 
1124(a) as being consistent with the criteria outlined in sections 
1103, 1109, and 1118(a) of FIRREA, as amended by the Dodd-Frank Act, 
which describe the elements of State regulation of AMCs that will be 
monitored by the ASC.\35\ For example, the ASC will monitor whether 
States have supervision systems in place that would allow a State to 
process complaints against an AMC and conduct investigations in 
connection with those complaints. The ASC will also monitor whether a 
State takes appropriate enforcement actions against an AMC that is 
found to have violated applicable laws and regulations.
---------------------------------------------------------------------------

    \34\ The Agencies believe that section 1124 allows the Agencies 
to establish more specific requirements for supervision and 
registration of AMCs that implement the general requirements 
enumerated in section 1124(a). In addition, by providing that the 
regulation shall ``include'' the requirements enumerated in section 
1124, it is implied that the Agencies have the discretion to 
establish additional supervisory standards for State oversight of 
AMCs beyond the general requirements specifically enumerated in 
section 1124(a).
    \35\ See 12 U.S.C. 3332(a)(1)(B) (requiring the ASC to monitor 
requirements established by the States for supervision of AMCs); 12 
U.S.C. 3338(a) (requiring each participating State to transmit 
reports to the ASC on supervisory activities involving AMCs and 
disciplinary actions taken); and 12 U.S.C. 3347(a) (requiring the 
ASC to monitor States to assess whether a State has an effective 
regulatory program).
---------------------------------------------------------------------------

    The Agencies believe that the proposed rule will provide notice to 
States of the enforcement and supervision obligations the States have 
under FIRREA and ensure that State appraiser certifying and licensing 
agencies have the required minimum structures for registration and 
supervision of AMCs
    Question 6. The Agencies request comment on the proposed minimum 
requirements for State registration and supervision of AMCs.
    Minimum requirements for State-registered AMCs. Under section 1124, 
participating States are required to ensure that AMCs that provide 
appraisal management services for a creditor or ``underwriter of or 
other principal in the secondary mortgage markets'' related to a 
covered transaction follow certain minimum requirements. The proposed 
rule implements these requirements.
    Under the proposed rule, an AMC must register with, and be subject 
to supervision by, a State appraiser certifying and licensing agency in 
each State in which the AMC operates. (Again, however, the requirement 
to register with a State does not apply to Federally regulated AMCs; 
the rules for these AMCs are discussed further below.) In addition, an 
AMC must verify that only State-certified or State-licensed appraisers 
are used when a creditor or secondary mortgage market participant 
engages in a transaction that requires the services of a State-
certified or State-licensed appraiser under the Federally related 
transaction regulations. An AMC must also have processes and controls 
reasonably designed to ensure that the AMC, in engaging an appraiser, 
selects an appraiser who has the requisite education, expertise, and 
experience necessary to complete competently the assignment for the 
particular market and property type. This minimum requirement 
implements the requirement of section 1124(a)(3) and emphasizes a core 
principle of the Interagency Appraisal and Evaluation Guidelines and 
USPAP, which is that an appraiser must be not only be competent 
generally, but also have specific competency to perform a particular 
appraisal.\36\
---------------------------------------------------------------------------

    \36\ Interagency Appraisal and Evaluation Guidelines, 75 FR 
77450, 77458 (December 10, 2010).
---------------------------------------------------------------------------

    The proposed rule also requires that an AMC establish and comply 
with processes and controls reasonably designed to ensure that the AMC 
conducts its appraisal management services in accordance with: (1) The 
AMC's obligations as a covered person with respect to mandatory 
reporting, conflicts of interest, and other acts or practices that 
would violate appraisal independence pursuant to section 129E(a) 
through (e) of TILA; and (2) the AMC's obligations as a creditor's 
agent with respect to appraiser compensation pursuant to section 
129E(i) of TILA, 15 U.S.C. 1639e(i).\37\ The proposed rule directly 
imposes these requirements on Federally regulated AMCs.
---------------------------------------------------------------------------

    \37\ See 12 CFR 226.42 (Board); 12 CFR 1026.42 (Bureau).

---------------------------------------------------------------------------

[[Page 19528]]

    The purpose and scope section of the proposed rule notes that the 
AMC minimum standards do not affect the responsibility of banks, 
Federal savings associations, state savings associations, bank holding 
companies, and credit unions for compliance with applicable regulations 
and guidance concerning appraisals. Under the interagency appraisal 
standards, for example, if an appraisal is prepared by a fee appraiser 
(as opposed to in-house, by the institution), the appraiser must be 
engaged directly by the regulated institution or its agent, and have no 
direct or indirect interest, financial or otherwise, in the property or 
the transaction.\38\ As such, as stated in the Interagency Appraisal 
and Evaluation Guidelines, an institution that engages a third party 
such as an AMC to act as its agent in administering any part of the 
institution's appraisal program remains responsible for compliance with 
applicable laws concerning appraisers and appraisals.\39\
---------------------------------------------------------------------------

    \38\ 12 CFR 34.45 and 164.5 (OCC); 12 CFR 225.65 (Board); 12 CFR 
323.5 (FDIC).
    \39\ See Interagency Appraisal and Evaluation Guidelines, 75 FR 
77450, 77463 (December 10, 2010)(discussing third party 
arrangements).
---------------------------------------------------------------------------

    In drafting these minimum requirements, and the definition of 
appraisal management services discussed previously, the Agencies 
considered whether to require AMCs to follow minimum standards when 
performing appraisal reviews. The Agencies note that section 1110 of 
FIRREA, as amended by section 1473 of the Dodd-Frank Act,\40\ requires 
a separate rulemaking to require ``appropriate'' appraisal review for 
compliance with USPAP in connection with Federally related 
transactions. The Agencies believe that the section 1110 rulemaking 
provides the appropriate opportunity to address the requirement for 
appraisal reviews. For this reason, the Agencies are not proposing to 
issue appraisal review standards in this AMC rulemaking.
---------------------------------------------------------------------------

    \40\ Section 1110(3), 12 U.S.C. 3339(3).
---------------------------------------------------------------------------

    Question 7. The Agencies request comment on the proposed approach 
to the appraisal review issue.
    Minimum requirements for Federally regulated AMCs. As explained 
earlier in this preamble, section 1124 provides that AMCs that are 
owned and controlled subsidiaries of an insured depository institution 
or an insured credit union and regulated by a Federal financial 
institutions regulatory agency, are not required to register with a 
State.\41\ These Federally regulated AMCs are, however, subject to the 
same minimum requirements as AMCs that are not regulated by a Federal 
financial institutions agency.
---------------------------------------------------------------------------

    \41\ However, nothing in the proposed rule would prohibit a 
Federally regulated AMC from registering with a State if the State 
permitted it to do so.
---------------------------------------------------------------------------

    The proposed rule implements these minimum requirements in Sec.  
34.214(a) using the same substantive standards that are proposed for 
AMCs that are not subject to regulation by a Federal financial 
institutions regulatory agency. Specifically, the proposed rule 
requires Federally regulated AMCs to have systems in place to ensure 
that only State-certified or State-licensed appraisers perform 
appraisals for Federally related transactions; that appraisers with the 
requisite education, expertise, and experience necessary for the 
assignment are used; that the appraisers comply with USPAP; and that 
the appraisal independence requirements of TILA section 129E are 
complied with.\42\
---------------------------------------------------------------------------

    \42\ See proposed Sec.  34.214(a) and 15 U.S.C. 1639e 
(implemented at 12 CFR 1026.42) (implementing section 129E of TILA).
---------------------------------------------------------------------------

    In addition, in order to establish a means for Federally regulated 
AMCs to be included in the ASC National Registry, the proposed rule 
would require Federally regulated AMCs to provide to each participating 
State in which it operates the information required by the ASC for 
administration of the AMC National Registry. First, the proposed rule 
would require Federally regulated AMCs to provide information related 
to the determination by the ASC of the AMC National Registry fee. This 
provision implements section 1124(e) of FIRREA.\43\ Second, the 
proposed rule would require Federally regulated AMCs to provide to each 
participating State the information needed to determine whether the 
limitations on registration or inclusion in the AMC National Registry 
under Sec.  34.215 apply. See proposed Sec.  34.215 and accompanying 
section-by-section analysis, below. The proposed rule recognizes, 
however, the possibility that a State might not establish a system for 
collecting such information from Federally regulated AMCs. If the State 
does not have a system for accepting such information and reporting it 
to the ASC, the proposed rule would direct the Federally regulated AMC 
to the ASC for more information on alternative means for submitting the 
information outlined in Sec.  34.214(b).
---------------------------------------------------------------------------

    \43\ 12 U.S.C. 3353(e).
---------------------------------------------------------------------------

    Registration limitations. Proposed Sec.  34.215 would place certain 
limitations on whether an AMC (whether or not Federally regulated) can 
be registered in a State or included in the National Registry. Proposed 
Sec.  34.215 is based on section 1124(d) of FIRREA,\44\ which provides 
that an AMC shall not be registered by a State or included on the AMC 
National Registry if such company, in whole or in part, directly or 
indirectly, is owned by any person who has had an appraiser license or 
certificate refused, denied, cancelled, surrendered in lieu of 
revocation, or revoked in any State. Section 1124(d) provides further 
that each person who owns more than 10 percent of an AMC must be of 
good moral character, as determined by the State appraiser certifying 
and licensing agency, and must submit to a background investigation 
carried out by the State appraiser certifying and licensing agency.
---------------------------------------------------------------------------

    \44\ 12 U.S.C. 3353(d).
---------------------------------------------------------------------------

    To implement this provision, proposed Sec.  34.215(a) would provide 
that an AMC may not be registered by a State or included on the AMC 
National Registry if such company, in whole or in part, directly or 
indirectly, is owned by any person who has had an appraiser license or 
certificate refused, denied, cancelled, surrendered in lieu of 
revocation, or revoked in any State. As indicated above, the statute 
clearly states that the limitations regarding appraiser licensure and 
certification determine both whether an AMC may be ``registered by a 
State'' and whether an AMC may be ``included on the national registry'' 
of AMCs.\45\
---------------------------------------------------------------------------

    \45\ 12 U.S.C. 3353(d).
---------------------------------------------------------------------------

    Proposed Sec.  34.215(b) provides that, for AMCs seeking to be 
registered in a State, each person who owns more than 10 percent of an 
AMC must be of good moral character, as determined by the State 
appraiser certifying and licensing agency, and must submit to a 
background investigation carried out by the State appraiser certifying 
and licensing agency. The statute is ambiguous regarding whether the 
limitation regarding the moral character of AMC owners applies to both 
registration with a State and inclusion on the AMC National Registry. 
Given that the title of the statutory section is ``Registration 
Limitations,'' the Agencies have proposed that the limitation would 
apply only with respect to AMC registration with a State. Under the 
proposal, this limitation would apply to Federally regulated AMCs only 
if they seek to register voluntarily with a State.
    Under the proposal, these threshold requirements concerning 
licensure would be ongoing obligations for State appraiser certifying 
and licensing agencies. As such, a State would be expected to review 
whether an AMC meets the proposed registration

[[Page 19529]]

limitations, as described in the statute and in proposed Sec.  34.215, 
at the time of registration of an AMC, and at the time of renewal of 
the AMC license each year, or more frequently as determined necessary 
by that State.
    Submission of reports to the ASC. Under Sec.  34.216 of the 
proposed rule, States that establish AMC registration programs must 
submit to the ASC the information regarding AMCs required by ASC 
regulations and guidance. The proposed rule implements the requirement 
in section 1124(e) for the Agencies to establish these reporting 
requirements.

Integration of FDIC and OTS Rules on Appraisals

    As noted previously, pursuant to Title III of the Dodd-Frank Act, 
the FDIC is proposing to integrate its appraisal regulations for both 
nonmember banks and State savings associations. Specifically, the FDIC 
proposes to rescind 12 CFR Part 390, Subpart X (Part 390, Subpart X), 
of the former OTS regulation entitled ``Appraisals.'' The proposed 
rescission of Part 390, Subpart X completes the FDIC's review of this 
subpart of the OTS rules for rescission, amendment, or adoption. This 
subpart was included in the regulations that were transferred to the 
FDIC from the OTS on July 21, 2011, in connection with the 
implementation of applicable provisions of Title III of the Dodd-Frank 
Act. Upon removal of Part 390, Subpart X, the appraisal regulations 
applicable for all insured depository institutions (``IDIs''), for 
which the FDIC has been designated the appropriate Federal banking 
agency (including State savings associations), will be found at 12 CFR 
Part 323, entitled ``Appraisals.''
    Rescinding Part 390, Subpart X will serve to streamline the FDIC's 
rules and eliminate redundancy and unnecessary regulations. The FDIC 
does not, however, see any need to make conforming amendments to Part 
323 of its Regulations to accomplish this goal. This is because Part 
323 already applies to ``regulated institutions,'' defined by section 
323.1(b) as ``institutions regulated by the FDIC.'' As noted 
previously, under Title III of the Dodd-Frank Act, the FDIC is now 
responsible for the regulation of State savings association. The FDIC 
is therefore of the opinion that Part 323 as currently drafted is 
sufficiently broad to include State savings associations without any 
further amendment. If the proposal is adopted in final form, all 
insured depository institutions regulated by the FDIC, including State 
savings associations, will be regulated in a uniform manner. The FDIC 
nonetheless solicits comment on these proposed changes.

III. Request for Comment on the Proposed Rule

    The Agencies request comments on all aspects of this proposed rule, 
including specific requests for comment that appear throughout the 
Supplementary Information above. In addition, we ask for specific 
comment on the following questions:
    Question 8. What barriers, if any, exist that may make it difficult 
for a State to implement the proposed AMC rules?
    Question 9. What aspects of the rule, if any, will be challenging 
for States to implement within 36 months? To the extent such challenges 
exist, what alternative approaches do commenters suggest that would 
make implementation easier, while maintaining consistency with the 
statute?
    Question 10. Are there any barriers to a State collecting 
information on Federally regulated AMCs and submitting such information 
to the ASC? And if so what are they?
    Question 11. Are any questions raised by any differences between 
State laws and the proposed AMC rules? Should these be addressed in the 
final AMC rules and, if so, how?

IV. Regulatory Analysis

Paperwork Reduction Act

    Certain provisions of the proposed rule contain ``information 
collection'' requirements within the meaning of the Paperwork Reduction 
Act (PRA) of 1995 (44 U.S.C. 3501 et seq.). Under the PRA, the Agencies 
may not conduct or sponsor, and a person is not required to respond to, 
an information collection unless the information collection displays a 
valid Office of Management and Budget (OMB) control number. The 
information collection requirements contained in this proposed rule are 
being submitted to OMB for review and approval by the FDIC, FHFA, and 
OCC under section 3506 of the PRA and section 1320.11 of the OMB's 
implementing regulations (5 CFR part 1320). The Board reviewed the 
proposed rule under the authority delegated to the Board by OMB.
    The collection of information requirements in the proposed rule are 
found in Sec. Sec.  34.212-34.216. This information is required to 
implement section 1473 of the Dodd-Frank Act.
    Title of Information Collection: Minimum Requirements for Appraisal 
Management Companies.
    OMB Control Nos.: The Agencies will be seeking new control numbers 
for these collections.
    Frequency of Response: Event generated.
    Affected Public: States; businesses or other for-profit and not-
for-profit organizations.
Abstract
State Recordkeeping Requirements
    States seeking to register AMCs must have an AMC certifying and 
licensing program. Section 34.213(a) requires participating States to 
establish and maintain within its appraiser certifying and licensing 
agency a licensing program with the legal authority and mechanisms to: 
(i) review and approve or deny an application for initial registration; 
(ii) periodically review and renew, or deny renewal of, an AMC's 
registration; (iii) examine an AMC's books and records and require the 
submission of reports, information, and documents; (iv) verify an AMC's 
certifications or licenses; (v) investigate and assess potential law, 
regulation, or order violations; (vi) discipline, suspend, terminate, 
or deny registration renewals of, AMCs that violate laws, regulations, 
or orders; and (vii) report violations of appraisal-related laws, 
regulations, or orders, and disciplinary and enforcement actions to the 
Appraisal Subcommittee.
    Section 34.213(b) requires each participating State to impose 
requirements on AMCs not owned and controlled by an insured depository 
institution and regulated by a Federal financial institution regulatory 
agency to: (i) Register with and be subject to supervision by a State 
appraiser certifying and licensing agency in each State in which the 
AMC operates; (ii) use only State-certified or State-licensed 
appraisers for Federally regulated transactions in conformity with any 
Federally regulated transaction regulations; (iii) establish and comply 
with processes and controls reasonably designed to ensure that the AMC, 
in engaging an appraiser, selects an appraiser who is independent of 
the transaction and who has the requisite education, expertise, and 
experience necessary to competently complete the appraisal assignment 
for the particular market and property type; (iv) direct the appraiser 
to perform the assignment in accordance with USPAP; and (v) establish 
and comply with processes and controls reasonably designed to ensure 
that the AMC conducts its appraisal management services in accordance 
with section 129E(a)-(i) of the Truth in Lending Act.

[[Page 19530]]

State Reporting Burden
    Section 34.216 requires that each State electing to register AMCs 
for purposes of permitting AMCs to provide appraisal management 
services relating to covered transactions in the State must submit to 
the Appraisal Subcommittee the information required to be submitted 
under this Subpart and any additional information required by the 
Appraisal Subcommittee concerning AMCs.
AMC Reporting Requirements
    Section 34.214(b) requires that a Federally regulated AMC must 
report to the State or States in which it operates the information 
required to be submitted by the State pursuant to the Appraisal 
Subcommittee's policies, including: (i) Policies regarding the 
determination of the AMC National Registry fee; and (ii) the 
information listed in Sec.  34.215.
    Section 34.215 provides that an AMC may not be registered by a 
State or included on the AMC National Registry if such company is 
owned, directly or indirectly, by any person who has had an appraiser 
license or certificate refused, denied, cancelled, surrendered in lieu 
of revocation, or revoked in any State. Each person that owns more than 
10 percent of an appraisal management company shall submit to a 
background investigation carried out by the State appraiser certifying 
and licensing agency. While section 34.215 does not authorize States to 
conduct background investigations of Federally regulated AMCs, it would 
allow a State to do so if the Federally regulated AMC chooses to 
register voluntarily with the State.
AMC Recordkeeping Requirements
    Section 34.212(b) provides that an appraiser in an AMC's network or 
panel is deemed to remain on the network or panel until: (i) The AMC 
sends a written notice to the appraiser removing the appraiser with an 
explanation; or (ii) receives a written notice from the appraiser 
asking to be removed or a notice of the death or incapacity of the 
appraiser. The AMC would retain these notices in its files.
Burden Estimates
    Total Number of Respondents: 500 AMCs, 50 States.
    Bureau: The Bureau is not seeking OMB approval for the information 
collection requirements already accounted for by the other agencies' 
information collection requests submitted to OMB in association with 
this rule.
    FDIC Burden Total: 1,545 hours.
    FHFA Burden Total: 617 hours.
    OCC Burden Total: 1,545 hours.
    Board Burden Total: 1,545 hours.
    Total Burden: 5,252 hours.
    The Agencies have a continuing interest in the public opinion of 
our collections of information. Comments regarding the questions set 
forth below may be sent to the OMB desk officer for the Agencies by 
mail to U.S. Office of Management and Budget, Office of Information and 
Regulatory Affairs, Washington, DC 20503, or by the Internet to oira_submission@omb.eop.gov, with copies to the Agencies at the addresses 
listed in the ADDRESSES section of this SUPPLEMENTARY INFORMATION.
    a. Whether the information collection is necessary for the proper 
performance of the Agencies' functions, and how the instructions can be 
clarified so that information gathered has more practical utility;
    b. The accuracy of the Agencies' estimates of the burdens of the 
information collection, including the validity of the methodology and 
assumptions used;
    c. Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    d. Ways to minimize the burden of the information collection on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
    e. Estimates of capital or startup costs and costs of operation, 
maintenance, and purchase of services to provide information.

Regulatory Flexibility Act

    OCC: The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., 
generally requires that, in connection with a notice of proposed 
rulemaking, an agency prepare and make available for public comment an 
initial regulatory flexibility analysis that describes the impact of a 
proposed rule on small entities. However, the regulatory flexibility 
analysis otherwise required under the RFA is not required if an agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities (defined in regulations 
promulgated by the Small Business Administration to include banking 
organizations with total assets of less than or equal to $500 million) 
and publishes its certification and a brief explanatory statement in 
the Federal Register together with the rule.
    The OCC currently supervises 1,745 banks (1,139 commercial banks, 
66 trust companies, 492 federal savings associations, and 48 branches 
or agencies of foreign banks). Approximately 1,195 of OCC-supervised 
banks are small entities based on the Small Business Administration's 
(SBA's) definition of small entities for RFA purposes. The OCC 
classifies the economic impact of total costs on a bank as significant 
if the total costs in a single year are greater than 5 percent of total 
salaries and benefits, or greater than 2.5 percent of total non-
interest expense.
    As discussed in the SUPPLEMENTARY INFORMATION above, section 1473 
of the Dodd-Frank Act requires the Agencies to jointly prescribe 
regulations to implement the minimum requirements for State 
registration and supervision of AMCs. The proposal meets this 
obligation by requiring States that elect to register and supervise 
AMCs to impose certain requirements on AMCs. The proposal also requires 
participating States to have certain basic supervisory authorities, 
such as the ability to investigate complaints against AMCs, and take 
disciplinary action with respect to AMCs that violate applicable laws.
    The OCC believes the proposed rule will not have a significant 
economic impact on a substantial number of small entities for several 
reasons. First, the proposed rule imposes requirements primarily on 
States, not on national banks or Federal savings associations. Second, 
to the extent that the proposal imposes burden on national banks or 
Federal savings associations that own and control an AMC, there are 
only two such AMCs, and these are owned by large national banks. For 
these reasons, the OCC estimates that the average cost per small bank 
or Federal savings association will be zero. Therefore, the OCC 
certifies that the proposed rule would not have a significant economic 
impact on a substantial number of small entities. Accordingly, an 
initial regulatory flexibility analysis is not required.
    Board: The RFA requires an agency to provide and make available for 
public comment an initial regulatory flexibility analysis that 
describes the impact of a proposed rule on small entities. A regulatory 
flexibility analysis is not required, if the agency certifies that the 
rule will not have a significant economic impact on a substantial 
number of small entities (defined in regulations of the Small Business 
Administration to include banking organizations with total assets of 
less than or equal to $500 million or $35.5 million or less in annual 
revenues for the majority of nonbank entities that are likely to be 
subject to the proposed regulations) and publishes its certification 
and a short explanatory statement in the Federal Register

[[Page 19531]]

together with the rule.\46\ Based on its analysis, and for the reasons 
stated below, the Board believes that the final rule will not have a 
significant economic impact on a substantial number of small entities.
---------------------------------------------------------------------------

    \46\ U.S. Small Business Administration, Table of Small Business 
Size Standards Matched to North American Industry Classification 
System Codes, available at https://www.sba.gov/sites/default/files/files/size_table_07222013.pdf.
---------------------------------------------------------------------------

    The proposed AMC rule applies to States that establish licensing 
and certifying authorities to regulate AMCs. In the Board's regulatory 
flexibility analysis for this rule, the Board determined that 
approximately 32 entities subject to Board regulation and supervision 
would be subject to the requirements of the rule. Data currently 
available to the Board are not sufficient to estimate how many of the 
approximately 32 entities subject to Board regulation and supervision 
would be classified as ``small entities.'' In addition, the number of 
these 32 entities that will be subject to State regulation and 
supervision is currently unknown since one or more of the entities may 
have a network or panel of contract appraisers that is too small to 
satisfy a threshold requirement of the proposed AMC rule and therefore 
may be exempt from registration.
    The proposed AMC rule does not impose directly any significant new 
recordkeeping, reporting, or compliance requirements on small entities. 
The proposed AMC rule requires those States electing to establish 
licensing and certifying authorities for AMCs to impose certain 
requirements on AMCs registered in the State. Generally, the RFA 
requires an agency to perform a regulatory flexibility analysis of 
small entity impacts only when the agency's rule directly regulates the 
small entities. The impact of the proposed rule on small entities is 
indirect.
    In addition, while certain minimum requirements are imposed on 
participating States by the language of section 1473 of the Dodd-Frank 
Act, each State may establish additional requirements in addition to 
those required by section 1473. Furthermore, an entity with a network 
or panel of appraisers that does not meet the numerical test specified 
in section 1473 may voluntarily register with a participating state and 
the ASC, thus incurring some nominal expenses in establishing and 
maintaining the required registration information and meeting the 
minimum operational requirements. Because of these uncertainties, 
calculation of the impact of the proposed rule on an affected 
institution or entity is uncertain, although the number of Board-
supervised institutions or entities subject to the rule is expected to 
be less than 32.
    Based on its analysis, and for the reasons stated above, the Board 
believes that the proposed rule, if adopted in final form, will not 
have a significant economic impact on a substantial number of small 
entities. The Board is publishing an initial regulatory flexibility 
analysis and, if necessary, will conduct a final regulatory flexibility 
analysis after consideration of comments received during the public 
comment period.
    The Board requests public comment on all aspects of this analysis.
    FDIC: The RFA generally requires that, in connection with a notice 
of proposed rulemaking, an agency prepare and make available for public 
comment an initial regulatory flexibility analysis that describes the 
impact of a proposed rule on small entities.\47\ A regulatory 
flexibility analysis is not required, however, if the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities (defined in regulations 
promulgated by the Small Business Administration to include banking 
organizations with total assets of less than or equal to $500 million) 
and publishes its certification and a short, explanatory statement in 
the Federal Register together with the rule. As of September 30, 2013, 
there were approximately 3,632 small FDIC-supervised institutions, 
which include 3,324 State nonmember banks and 308 State-chartered 
savings institutions.
---------------------------------------------------------------------------

    \47\ See 5 U.S.C. 601 et seq.
---------------------------------------------------------------------------

    The FDIC analyzed the organizational structure information in the 
Board of Governors of the Federal Reserve System's National Information 
Center database. This analysis found that few FDIC-supervised 
institutions owned or controlled an entity that provides the types of 
appraisal management services specified in Section 1473. Of these 
institutions, none oversees a network or panel of appraisers that meets 
the numerical test requirement specified in Section 1473 for an entity 
to be an AMC. Therefore, the proposed rule would not have any impact on 
any FDIC-supervised institutions. If any FDIC-supervised institution 
that owns or controls an entity with a network or panel of appraisers 
that does not meet the numerical test specified in Section 1473 
voluntarily decides to register that entity with the States, then the 
institution may incur some nominal expenses in establishing and 
maintaining a process for providing the required registration 
information and meeting the minimum operational requirements.
    It is the opinion of the FDIC that the proposed rule will not have 
a significant economic impact on a substantial number of small entities 
that it regulates in light of the fact that no FDIC-supervised 
institutions own or control an entity with a network or panel of 
appraisers that meets the numerical test requirement specified in 
Section 1473 for an entity to be an AMC. Accordingly, the FDIC 
certifies that the proposed rule would not, if promulgated, have a 
significant economic impact on a substantial number of small entities. 
Thus, an initial regulatory flexibility analysis is not required.
    The FDIC seeks comment on whether the proposed rule, if adopted in 
final form, would impose undue burdens, or have unintended consequences 
for, small FDIC-supervised institutions and whether there are ways such 
potential burdens or consequences could be minimized in a manner 
consistent with section 1473(f) of the Dodd-Frank Act.
    Bureau: The Regulatory Flexibility Act (RFA) generally requires an 
agency to conduct an initial regulatory flexibility analysis (IRFA) and 
a final regulatory flexibility analysis (FRFA) of any rule subject to 
notice-and-comment rulemaking requirements, unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities.\48\ The Bureau also is subject to 
certain additional procedures under the RFA involving the convening of 
a panel to consult with small business representatives prior to 
proposing a rule for which an IRFA is required.\49\
---------------------------------------------------------------------------

    \48\ For purposes of assessing the impacts of the proposed rule 
on small entities, ``small entities'' is defined in the RFA to 
include small businesses, small not-for-profit organizations, and 
small government jurisdictions. 5 U.S.C. 601(6). A ``small 
business'' is determined by application of Small Business 
Administration regulations and reference to the North American 
Industry Classification System (NAICS) classifications and size 
standards. 5 U.S.C. 601(3). A ``small organization'' is any ``not-
for-profit enterprise which is independently owned and operated and 
is not dominant in its field.'' 5 U.S.C. 601(4). A ``small 
governmental jurisdiction'' is the government of a city, county, 
town, township, village, school district, or special district with a 
population of less than 50,000. 5 U.S.C. 601(5).
    \49\ 5 U.S.C. 609.
---------------------------------------------------------------------------

    An IRFA is not required for this proposed rule because the 
proposal, if adopted, would not have a significant economic impact on a 
substantial number of small entities.
    The Bureau notes that the proposed rule would not impose 
requirements on AMCs, but instead seeks to encourage States to adopt 
minimum requirements in their regulation of AMCs.

[[Page 19532]]

Nonetheless, to inform the rulemaking and to inform the public, the 
Bureau has exercised its discretion to analyze economic impacts that 
may be imposed by States on AMCs if the proposed rule were adopted.\50\ 
For this purpose, the Bureau assumed States that have not yet passed an 
AMC licensing and registration law (14 States, as of July 2013; this 
number is expected to decrease by the time the Agencies adopt a final 
rule) would all elect to pass such a law and establish an AMC licensing 
and supervision program that satisfies the standards of the proposed 
rule. This assumption is taken to establish an outer bound. Because the 
proposed rule does not require States to adopt the minimum requirements 
in the proposed rule, however, it is possible that not all 14 States 
would do so.\51\
---------------------------------------------------------------------------

    \50\ The Bureau does not assume costs associated with the 
proposed rule's requirements to ensure compliance with USPAP and 
other regulations because AMCs would be subject to these standards 
even without their being referenced in the proposed rule.
    \51\ A state could accept the consequences on AMCs' business in 
the state from not implementing the proposed rule. FIRREA section 
1124(f) provides that three years after the proposed rule takes 
effect, AMCs cannot provide services related to Federally related 
transactions in a state that has not implemented the proposed rule. 
However, the Bureau understands that only a minority of mortgage 
transactions are ``Federally related transactions'' within the 
meaning of FIRREA. See, e.g., 12 CFR 225.62(f) (transaction must 
``[r]equire the services of an appraiser'' to be federally related). 
But see id. at 225.63(a)(1),(9),(10) (exemptions from FIRREA 
appraisal requirements for transactions of $250,000 or less, 
transactions insured by or sold to a U.S. government agency, and 
transactions that conform to GSE appraisal standards). However, the 
Bureau believes all states will choose to participate.
---------------------------------------------------------------------------

    State registration fees would constitute the primary economic 
impact of the proposed rule. In estimating the impact of the proposed 
rule in the 14 States that have not yet passed an AMC licensing and 
registration law as of July 2013, the Bureau notes that State fees vary 
widely. Such State registration and renewal fees are not necessarily 
for the sole purpose of recovering costs of administering the minimum 
requirements under the proposed rule. States can impose charges for a 
variety of reasons, including to raise revenue (independent of the cost 
of the registration regime) or to fund the administration of a regime 
that exceeds the minimum requirements under the proposed rule. The 
Bureau believes that the fee charged by Vermont--$125 for registration 
and $250 for annual renewal--would be sufficient to comply with the 
proposed rule.\52\ The Bureau therefore considered this fee in 
estimating the economic impact of the proposed rule in the 14 States 
that do not yet have AMC registration requirements. As discussed below, 
however, the Bureau also considered more conservative estimates of the 
impact of the proposed rule using significantly higher fee amounts.
---------------------------------------------------------------------------

    \52\ As of the Bureau's 2013 review of State laws, the 
application fee in Vermont was $125. See https://vtprofessionals.org/opr1/real_estate_appraisers/AMC/AMC_Application.pdf. The 
application fee in Vermont is $125. The annual renewal fee is $250. 
See http: //vtprofessionals.org/opr1/real_estate_appraisers/AMC/Appraisal%20Management%20Company%20Renewal%202013.pdf.https://vtprofessionals.org/opr1/real_estate_appraisers/AMC/Appraisal%20Management%20Company%20Renewal%202013.pdf. In addition, 
while some States may elect to impose additional requirements 
relating to examination and inspection of their AMCs, the Bureau 
does not believe that the minimum requirements that states must 
provide would lead to significant costs for AMCs.
---------------------------------------------------------------------------

    With respect to the Federal registration fee, the Bureau notes that 
the proposed rule neither requires collection of registration fees by 
the Appraisal Subcommittee (ASC) nor authorizes the collection of such 
fees. The Dodd-Frank Act grants that authority exclusively to the 
ASC.\53\ Therefore, the Bureau does not consider any fees imposed on 
AMCs by the ASC (whether directly or through the States for forwarding 
to the ASC) as an impact of the proposed rule.
---------------------------------------------------------------------------

    \53\ See 12 U.S.C. 3338.
---------------------------------------------------------------------------

    An additional requirement in the proposed rule is that the State 
AMC licensing programs have authority and mechanisms to examine books 
and records of the AMCs, to otherwise obtain information from the AMCs, 
and to discipline AMCs. The Bureau believes that existing State 
registration fees generally already account for the cost to the States 
of having such authority and mechanisms, and that the requirement in 
the proposed rule therefore would not lead to higher registration fees 
in any significant amount.\54\ Accordingly, in the 14 States that would 
adopt new registration and renewal systems, the Bureau believes the 
registration fee currently charged in Vermont would cover the State's 
cost associated with implementing this requirement.
---------------------------------------------------------------------------

    \54\ See, e.g., Vermont Statutes Title 26 section 3324 
(requiring AMCs to ``retain all records related to an appraisal, 
review, or consulting assignment for no less than five years . . . 
[and w]ith reasonable notice, a licensee or registrant shall produce 
any records governed by this section for inspection and copying by 
the board or its authorized agent.'').
---------------------------------------------------------------------------

    The Bureau notes that the proposed rule is not prescriptive as to 
how or when the States must exercise the authority or mechanisms. 
Exercise of such authority and mechanisms is determined by the 
discretion of the States, subject to monitoring by the ASC for 
effectiveness in the judgment or discretion of the ASC. Accordingly, to 
the extent that State exercise of such authority and mechanisms leads 
to burden on small entities, such burden would be attributable to such 
State implementation and/or ASC oversight expectations rather than to 
the proposed rule itself. Therefore, State statutes that implement this 
requirement relating to establishing examination authority and 
mechanisms are not expected to cause fee increases or new burden above 
the $125 overall baseline assumed for purposes of this analysis.\55\
---------------------------------------------------------------------------

    \55\ In addition, the Bureau does not believe that in States 
that add this requirement there will be any significant new burden 
on the AMCs. The Bureau believes that the AMCs already keep their 
books and records in order as a standard course of business 
practice, and thus the occasional State examiner visits should not 
impose any significant burden. In addition, the proposed rule 
requires only that the State have the authority and mechanism to 
request records and information. The proposed rule does not require 
that the State exercise this authority and any burdensome exercise 
of this authority would therefore not be caused by the proposed 
rule. Finally, to the extent State supervision programs do increase 
burden, the Bureau believes this burden would be within the 
sensitivity tolerances described in the footnote at the end of this 
section.
---------------------------------------------------------------------------

    Similarly, the Bureau believes that other minimum requirements for 
AMCs under the proposed rule (verifying the use of licensed or 
certified status of appraisers, requiring that appraisers comply with 
USPAP, complying with any contractual review provisions, and 
establishing and complying with processes to ensure appraisers are 
qualified and independent and that the AMC acts in compliance with 
applicable appraisal independence regulations), as well as the standard 
for removing appraisers from the appraiser panel, would not result in 
new burden on AMCs because these standards merely reinforce existing 
compliance requirements as well as industry practice.\56\ The Bureau 
further notes that States have discretion to interpret the requirements 
to establish processes and controls to ensure compliance, subject to 
monitoring by the ASC for effectiveness in the judgment or discretion 
of the ASC. Accordingly, to the extent that State interpretations of 
such requirements leads to burden on small entities, such burden would 
be attributable to such State implementation and/or ASC oversight

[[Page 19533]]

expectations rather than to the proposed rule itself.
---------------------------------------------------------------------------

    \56\ These requirements also would not result in new burden on 
Federally regulated AMCs, for the same reason. Federally regulated 
AMCs do not have to comply with state registration and renewal 
requirements, which can entail fees. Conservatively, however, the 
Bureau applied the State fee burden to all of the small AMCs in its 
calculation method described herein. As a result, the estimated 
burden of State fees associated with the proposed rule may be 
overestimated.
---------------------------------------------------------------------------

    Just as these conduct standards would not impose a significant 
burden on AMCs required to register at the State level, the Bureau does 
not believe they would impose significant burdens on Federally 
regulated AMCs either. See Interagency Appraisal and Evaluation 
Guidelines, 75 FR 77450 (Dec. 10, 2010) (Interagency Guidelines). The 
Interagency Guidelines, part VI, already require Federal financial 
institutions to select appraisers who are certified or licensed, 
qualified, in compliance with USPAP, and independent. 75 FR at 77458. 
AMCs that are affiliated with Federal financial institutions frequently 
perform appraisals for their affiliates. Therefore, it can be assumed 
that in delegating these functions to AMCs, these Federal financial 
institutions also delegate these requirements from part VI of the 
Interagency Guidelines to these AMCs.
    To estimate the impact of the proposed rule on small AMCs, the 
Bureau conducted a survey. The Bureau called nine AMCs, picked randomly 
from a list of approximately 500 AMCs provided by industry trade 
associations. The AMCs were asked for certain basic data including the 
number of States in which they operate, their revenue (including the 
revenue from any non-appraisal business), and the number of appraisals 
that they performed in 2012.\57\ The Bureau estimated the revenue to be 
the number of appraisals performed in 2012 multiplied by $350--the 
average appraisal cost assumed in the Agencies' analysis under section 
1022 of the Dodd-Frank Act in the 2013 Interagency Appraisals Rule. 
This revenue estimate is likely to be underestimated, given that 
several AMCs out of nine reported additional revenue that was not due 
to the residential appraisal business. Out of the nine AMCs, seven had 
revenues of less than $7,000,000 in 2012, and thus would be within the 
scope of the RFA analysis based upon Small Business Administration 
guidelines.\58\ The Bureau computed the cost of registration and 
renewal fees in States that do not already have them, allocated these 
costs to individual AMCs based upon the number of States in which the 
AMC operated,\59\ and computed the ratio of these allocated costs to 
the AMCs' revenues.
---------------------------------------------------------------------------

    \57\ One of the AMCs did not report its revenue.
    \58\ NAICS code 531320--Offices of Real Estate Appraisers--
includes ``appraisal services,'' which we believe would include 
services provided by AMCs in the processing and review of 
appraisals. An alternative classification would be NAICS code 
561110--Office Administrative Services. In any event, this code also 
has an SBA threshold of $7,000,000.
    \59\ The Bureau assumed that an AMC that operated in x states 
needs to register in additional (14/50)*x states. This assumption 
results in a (14/50)*x*$250 state registration and renewal fee 
burden on an AMC operating in x states.
---------------------------------------------------------------------------

    The Bureau acknowledges that requiring AMCs to send letters to the 
appraisers that the AMC decides to remove from its panel might add 
burden in States that do not already have registration requirements 
(which typically include notice provisions). The Bureau does not 
possess any evidence on the number of appraisers to whom an AMC would 
have to send these letters. According to the Bureau of Labor and 
Statistics' October 2013 preliminary numbers (available at https://www.bls.gov/news.release/jolts.t11.htm), 1.9 percent of the labor force 
in the real estate and rental and leasing industry was either laid off 
or discharged in the most recent month. Thus, the Bureau estimates that 
an AMC will dismiss approximately a quarter of appraisers from its 
panel in any given year. The Bureau assumes that each AMC will have 
several standardized letters explaining the reason for dismissal: For 
example, changing economic conditions or the appraiser's violation of 
USPAP or work performance issues. Each AMC might incur a minimal one-
time cost to draft these letters, with some industry associations 
potentially providing templates. After this minimal one-time cost is 
incurred, the ongoing cost would include a minimal adjustment of the 
letter based on the appraiser's particular circumstances and the actual 
printing and mailing cost. These letters also could be sent in batches, 
periodically, such as on an annual basis. Thus, for the purposes of 
this analysis, the Bureau implicitly accounts for these costs in the 
sensitivity analyses below (which use a State fee to $5,250 and include 
a $300 administrative expense). The Bureau requests comments on 
availability of data on these costs.
    The Bureau then fit the received ratios using three different 
distributions: normal, generalized extreme value, and logistic. The 
three different distributions were used because no a priori assumptions 
regarding how these ratios are distributed can be made. The three 
distributions mentioned above are commonly used by empirical 
researchers to fit observed values. Considering the costs imposed by 
the States as a result of the proposed rule, the Bureau believes that 
less than 1 percent of the small entities would experience a cost of 
over 1 percent of their revenue, using either the normal, or the 
logistic, or the generalized extreme value distributions.\60\ The 
Bureau also notes that because the sample did not include any AMCs that 
were either too small (for example, less than 15 appraisers in one 
State) or that were subsidiaries of Federally regulated financial 
institutions, these estimates are likely overstated.
---------------------------------------------------------------------------

    \60\ The Bureau notes that the percentage of small institutions 
for which the estimated burden of the proposed rule would amount to 
over 3 percent of the revenue would remain under 1 percent even if 
the Bureau had used the following alternative assumptions: (1) 
$5,250 as the assumed burden of the proposed rule for states that 
adopt new registration regimes--the highest among the existing State 
registration fees as of the Bureau's 2013 review of state laws (in 
Minnesota), and assumed this same amount as the annual renewal fee 
(even though the Minnesota renewal fee at the time of the review was 
only $2,650); and (2) an additional annual labor cost of $300 for 
any possible associated burden of (a) filling out registration and 
renewal forms in those states (assuming an AMC operates in 
approximately 20 States on average, such that 6.26 of those States 
adopt new AMC licensing programs) and any additional burden related 
to notices from small AMCs removing appraisers from their panels in 
those states. The percentages of institutions for which this cost 
would amount to over 1 percent of the revenue changed, respectively, 
to 18 percent, 13 percent, and 9 percent of the small institutions 
affected, according to the normal, generalized extreme value, and 
logistic distributions.
---------------------------------------------------------------------------

    The Bureau seeks comment on the data used in its analysis as well 
as the methodology for estimating burden described in this analysis, 
including data from States that have existing registration and renewal 
regimes on whether the proposed minimum requirements would lead them to 
change their laws and impose any new fees (which this analysis assumes 
would not occur). In addition, as noted in the section-by-section 
analysis above, the Agencies are seeking comment on the proposed 
approach of not imposing minimum requirements for appraisal reviews or 
defining appraisal review and verification activities. The Bureau seeks 
data on the types of review and verification services provided by AMCs, 
and in particular, AMCs that meet the definition of small entities, as 
well as the frequency with which each type of practice is performed. 
Further, the Bureau seeks data on the potential impact of any minimum 
review requirements or review and verification definitions--such as 
requirements or definitions that would be set at a level above 
administrative checks for grammatical errors or other technical or 
computerized quality checks that are not performed by licensed 
appraisers.
Certification
    Accordingly, the Bureau Director, by signing below, certifies that 
this

[[Page 19534]]

proposal, if adopted, would not have a significant economic impact on a 
substantial number of small entities.
    FHFA: The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) 
requires an agency to analyze a proposed regulation's impact on small 
entities if the final rule is expected to have a significant economic 
impact on a substantial number of small entities. 5 U.S.C. 605(b). The 
proposed rule implements Section 1124 of the Financial Institutions 
Reform, Recovery, and Enforcement Act and establishes minimum 
requirements to be imposed by a participating State appraiser 
certifying and licensing agency on AMCs doing business in the State. 
FHFA has considered the impact of this regulation and determined that 
it is not likely to have a significant economic impact on a substantial 
number of small entities because States and FHFA's regulated entities--
Fannie Mae, Freddie Mac, and the Federal Home Loan Banks--are not small 
entities for purposes of the Regulatory Flexibility Act. See 5 U.S.C. 
601(6).
    NCUA: The Regulatory Flexibility Act (RFA) \61\ requires NCUA to 
provide an initial regulatory flexibility analysis with a proposed rule 
to certify that the rule will not have a significant economic impact on 
a substantial number of small entities and publish its certification 
and a short explanatory statement in the Federal Register also with the 
proposed rule.\62\ As explained above, the requirements of this 
proposed rule would only apply directly to AMC subsidiaries owned and 
controlled by an insured depository institution, or an insured credit 
union, and regulated by a Federal financial institutions regulatory 
agency. NCUA, unlike the other banking agencies to this rulemaking, 
does not directly oversee or regulate any subsidiaries owned and 
controlled by credit unions, including AMC subsidiaries. Rather, NCUA's 
regulations permit Federal credit unions to invest in or lend only to 
credit union service organizations (CUSOs) that conform to specific 
requirements outlined in part 712 of the NCUA's regulations. Because 
NCUA does not directly regulate or oversee CUSOs owned by State or 
federally chartered credit unions, NCUA is not proposing regulatory 
text or proposing any requirements through this rulemaking that would 
directly affect small entities. Accordingly, the NCUA Board certifies 
the proposed rule will not have a significant economic impact on a 
substantial number of small entities.
---------------------------------------------------------------------------

    \61\ 5 U.S.C. 601 et seq.
    \62\ 78 FR 4032 (Jan. 18, 2013).
---------------------------------------------------------------------------

Unfunded Mandates Reform Act of 1995 Determination

    OCC: The OCC has analyzed the proposed rule under the factors in 
the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532). Under 
this analysis, the OCC considered whether the proposed rule includes a 
Federal mandate that may 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 (adjusted annually for inflation). For 
the following reasons, the OCC finds that the proposal does not trigger 
the $100 million UMRA threshold. First, the mandates in the proposed 
rule apply only to those States that choose to establish an AMC 
registration system. Second, the costs specifically related to 
requirements set forth in law are excluded from expenditures under the 
UMRA. Given that the proposed rule reflects requirements that arise 
from section 1473, the UMRA cost estimate for the proposal, if 
implemented, is zero. For this reason, and for the other reasons cited 
above, the OCC has determined that this proposed rule will not result 
in expenditures by State, local, and tribal governments, or the private 
sector, of $100 million or more in any one year. Accordingly, this 
proposal is not subject to section 202 of the Unfunded Mandates Act.

List of Subjects

12 CFR Part 34

    Appraisal, Appraiser, Banks, Banking, Consumer protection, Credit, 
Mortgages, National banks, Reporting and recordkeeping requirements, 
Savings associations, Truth in lending.

12 CFR Part 208

    Accounting, Agriculture, Banks, Banking, Confidential business 
information, Consumer protection, Crime, Currency, Insurance, 
Investments, Mortgages, Reporting and recordkeeping requirements, 
Securities.

12 CFR Part 225

    Administrative practice and procedure, Banks, Banking, Federal 
Reserve System, Holding companies, Reporting and recordkeeping 
requirements, Securities.

12 CFR Part 323

    Banks, banking, Mortgages, Reporting and recordkeeping 
requirements, Savings associations.

12 CFR Part 1026

    Advertising, Appraisal, Appraiser, Banks, Banking, Consumer 
protection, Credit, Credit unions, Mortgages, National banks, Reporting 
and recordkeeping requirements, Savings associations, Truth in lending.

12 CFR Part 1222

    Appraisals, Government sponsored enterprises, Mortgages.

Department of the Treasury

Office of the Comptroller of the Currency

Authority and Issuance
    For the reasons set forth in the preamble, the OCC proposes to 
amend 12 CFR part 34 as follows:

PART 34--REAL ESTATE LENDING AND APPRAISALS

0
1. The authority citation for part 34 is revised to read as follows:

    Authority: 12 U.S.C. 1 et seq., 25b, 29, 93a, 371, 1463, 1465, 
1701j-3, 1828(o), 3331 et seq., 5101 et seq., and 5412(b)(2)(B) and 
15 U.S.C. 1639h.

0
2. Subpart H to part 34 is added to read as follows:

Subpart H--Appraisal Management Company Minimum Requirements

Sec.
34.210 Authority, purpose, and scope.
34.211 Definitions.
34.212 Appraiser panel.
34.213 Appraisal management company registration.
34.214 Requirements for Federally regulated appraisal management 
companies.
34.215 Registration limitations.
34.216 Information to be presented to the Appraisal Subcommittee by 
participating States.


Sec.  34.210  Authority, purpose, and scope.

    (a) Authority. This subpart is issued by the Office of the 
Comptroller of the Currency under 12 U.S.C. 93a and Title XI of the 
Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), 
as amended by the Dodd-Frank Wall Street Reform and Consumer Protection 
Act (the Dodd-Frank Act) (Pub. L. 111-203, 124 Stat. 1376 (2010)), 12 
U.S.C. 3331 et seq.
    (b) Purpose. The purpose of this subpart is to implement sections 
1109, 1117, 1121, and 1124 of FIRREA Title XI, 12 U.S.C. 3338, 3346, 
3350, and 3353.
    (c) Scope. This subpart applies to States and to appraisal 
management companies (AMCs) providing appraisal management services in 
connection

[[Page 19535]]

with consumer credit transactions secured by a consumer's principal 
dwelling or securitizations of those transactions.
    (d) Rule of construction. Nothing in this subpart should be 
construed to prevent a State from establishing requirements in addition 
to those in this subpart. In addition, nothing in this subpart should 
be construed to alter guidance in, and applicability of, the 
Interagency Appraisal and Evaluation Guidelines \4\ or other relevant 
agency guidance that cautions banks, bank holding companies, Federal 
savings associations, state savings associations, and credit unions, as 
applicable, that each such entity is accountable for overseeing the 
activities of third party service providers and ensuring that any 
services provided by a third party comply with applicable laws, 
regulations, and supervisory guidance applicable directly to the 
financial institution.
---------------------------------------------------------------------------

    \4\ 75 FR 77450 (December 10, 2010).
---------------------------------------------------------------------------


Sec.  34.211  Definitions.

    For purposes of this subpart:
    (a) Affiliate has the meaning provided in 12 U.S.C. 1841.
    (b) AMC National Registry means the registry of State-registered 
appraisal management companies (AMCs) and Federally regulated AMCs 
maintained by the Appraisal Subcommittee.
    (c)(1) Appraisal management company (AMC) means a person that:
    (i) Provides appraisal management services to creditors or to 
secondary mortgage market participants, including affiliates;
    (ii) Provides such services in connection with valuing a consumer's 
principal dwelling as security for a consumer credit transaction or 
incorporating such transactions into securitizations; and
    (iii) Within a given year, oversees an appraiser panel of more than 
15 State-certified or State-licensed appraisers in a State or 25 or 
more State-certified or State-licensed appraisers in two or more 
States, as described in Sec.  34.212;
    (2) An AMC does not include a department or division of an entity 
that provides appraisal management services only to that entity.
    (d) Appraisal management services means one or more of the 
following:
    (1) Recruiting, selecting, and retaining appraisers;
    (2) Contracting with State-certified or State-licensed appraisers 
to perform appraisal assignments;
    (3) Managing the process of having an appraisal performed, 
including providing administrative services such as receiving appraisal 
orders and appraisal reports, submitting completed appraisal reports to 
creditors and secondary market participants, collecting fees from 
creditors and secondary market participants for services provided, and 
paying appraisers for services performed; and
    (4) Reviewing and verifying the work of appraisers.
    (e) Appraiser panel means a network or panel of licensed or 
certified appraisers who are independent contractors to the AMC.
    (f) Appraisal Subcommittee means the Appraisal Subcommittee of the 
Federal Financial Institutions Examination Council.
    (g) Consumer credit has the meaning provided in 12 CFR 
1026.2(a)(12).
    (h) Covered transaction means any consumer credit transaction 
secured by the consumer's principal dwelling.
    (i) Creditor has the meaning provided in 12 CFR 1026.2(a)(17).
    (j) Federally regulated AMC means an AMC that is owned and 
controlled by an insured depository institution, as defined in 12 
U.S.C. 1813, or an insured credit union, as defined in 12 U.S.C. 1752, 
and that is regulated by the Office of the Comptroller of the Currency, 
the Board of Governors of the Federal Reserve System, the National 
Credit Union Administration, or the Federal Deposit Insurance 
Corporation.
    (k) Federally related transaction regulations means regulations 
established by the Office of the Comptroller of the Currency, the Board 
of Governors of the Federal Reserve System, the Federal Deposit 
Insurance Corporation, or the National Credit Union Administration, 
pursuant to sections 1112, 1113, and 1114 of FIRREA Title XI, 12 U.S.C. 
3341-3343.
    (l) Person has the meaning in 12 CFR 1026.2(a)(22).
    (m) Principal dwelling means a residential structure that contains 
one to four units, whether or not that structure is attached to real 
property, that is also a consumer's primary residence. The term 
includes an individual condominium unit, cooperative unit, mobile home, 
and trailer, if it is used as a residence. A vacation or other second 
home is not a principal dwelling. A consumer can have only one 
principal dwelling at a time. However, if a consumer buys or builds a 
new dwelling that will become the consumer's principal dwelling within 
a year or upon the completion of construction, the new dwelling is 
considered the principal dwelling.
    (n) Secondary mortgage market participant means a guarantor or 
insurer of mortgage-backed securities, or an underwriter or issuer of 
mortgage-backed securities. Secondary mortgage market participant only 
includes an individual investor in a mortgage-backed security if that 
investor also serves in the capacity of a guarantor, insurer, 
underwriter, or issuer for the mortgage-backed security.
    (o) States mean the 50 States and the District of Columbia and the 
territories of Guam, Mariana Islands, Puerto Rico, and the U.S. Virgin 
Islands.
    (p) Uniform Standards of Professional Appraisal Practice (USPAP) 
means the appraisal standards promulgated by the Appraisal Standards 
Board of the Appraisal Foundation.


Sec.  34.212  Appraiser panel.

    For purposes of determining whether, within a given year, an AMC 
oversees an appraiser panel of more than 15 State-certified or State-
licensed appraisers in a State or 25 or more State-certified or State-
licensed appraisers in two or more States under Sec.  
34.211(c)(1)(iii)--
    (a) An appraiser is deemed part of the AMC's appraiser panel as of 
the earliest date on which the AMC:
    (1) Affirms eligibility or acceptance of the appraiser for the 
AMC's consideration for future appraisal assignments; or
    (2) Engages the appraiser to perform one or more appraisals on 
behalf of a creditor or secondary mortgage market principal.
    (b) An appraiser who is deemed part of the AMC's appraiser panel 
pursuant to paragraph (a) of this section is deemed to remain on the 
panel until the date on which the AMC:
    (1) Sends written notice to the appraiser removing the appraiser 
from the appraiser panel, with an explanation of its action; or
    (2) Receives written notice from the appraiser asking to be removed 
from the appraiser panel or notice of the death or incapacity of the 
appraiser.
    (c) If an appraiser is removed from an AMC's appraiser panel 
pursuant to paragraph (b) of this section, but the AMC subsequently re-
admits or engages the appraiser at any time during the twelve months 
after the AMC's removal, the removal will be deemed not to have 
occurred, and the appraiser will be deemed to have been part of the 
AMC's appraiser panel without interruption.
    (d) The annual period for purposes of counting appraisers on an 
AMC's appraiser panel may be the calendar year or a 12-month period 
established by law or rule of each State with which the AMC is required 
to register.

[[Page 19536]]

Sec.  34.213  Appraisal management company registration.

    Each State electing to register AMCs pursuant to paragraph (b)(1) 
of this section must:
    (a) Establish and maintain within the State appraiser certifying 
and licensing agency a licensing program that is subject to the 
limitations set forth in Sec.  34.215 and with the legal authority and 
mechanisms to:
    (1) Review and approve or deny an AMC's application for initial 
registration;
    (2) Review and renew or review and deny an AMC's registration 
periodically;
    (3) Examine the books and records of an AMC operating in the State 
and require the AMC to submit reports, information, and documents;
    (4) Verify that the appraisers on the AMC's appraiser list, 
network, panel, or roster hold valid State certifications or licenses, 
as applicable;
    (5) Conduct investigations of AMCs to assess potential violations 
of applicable appraisal-related laws, regulations, or orders;
    (6) Discipline, suspend, terminate, or deny renewal of the 
registration of an AMC that violates applicable appraisal-related laws, 
regulations, or orders; and
    (7) Report an AMC's violation of applicable appraisal-related laws, 
regulations, or orders, as well as disciplinary and enforcement actions 
and other relevant information about an AMC's operations, to the 
Appraisal Subcommittee.
    (b) Impose requirements on AMCs that are not owned and controlled 
by an insured depository institution or by an insured credit union and 
not regulated by a Federal financial institutions regulatory agency to:
    (1) Register with and be subject to supervision by the State 
appraiser certifying and licensing agency;
    (2) Use only State-certified or State-licensed appraisers for 
Federally related transactions in conformity with any Federally related 
transaction regulations;
    (3) Establish and comply with processes and controls reasonably 
designed to ensure that the AMC, in engaging an appraiser, selects an 
appraiser who is independent of the transaction and who has the 
requisite education, expertise, and experience necessary to competently 
complete the appraisal assignment for the particular market and 
property type;
    (4) Direct the appraiser to perform the assignment in accordance 
with USPAP; and
    (5) Establish and comply with processes and controls reasonably 
designed to ensure that the AMC conducts its appraisal management 
services in accordance with the requirements of section 129E(a)-(i) of 
the Truth in Lending Act, 15 U.S.C. 1639e(a)-(i), and regulations 
thereunder.


Sec.  34.214  Requirements for Federally regulated appraisal management 
companies.

    (a) Requirements in providing services. To provide appraisal 
management services for a creditor or secondary mortgage market 
participant relating to a covered transaction, a Federally regulated 
AMC must comply with the requirements in Sec. Sec.  34.213(b)(2) 
through (5).
    (b) Reporting information for the AMC National Registry. A 
Federally regulated AMC must:
    (1) Report to the State or States in which it operates the 
information required to be submitted by the State pursuant to the 
Appraisal Subcommittee's policies regarding:
    (i) The determination of the AMC National Registry fee, including 
but not necessarily limited to a statement that the AMC is a Federally 
regulated AMC; and
    (ii) The collection of information related to the limitations set 
forth in Sec.  34.215, as applicable.
    (2) Contact the Appraisal Subcommittee for alternative arrangements 
to submit the information described in paragraph (b)(1) of this section 
if a State in which a Federally regulated AMC operates has not 
established a process for accepting the information from Federally 
regulated AMCs.


Sec.  34.215  Registration limitations.

    (a) Appraiser certification or licensing of owners. An AMC shall 
not be registered by a State or included on the AMC National Registry 
if such AMC, in whole or in part, directly or indirectly, is owned by 
any person who has had an appraiser license or certificate refused, 
denied, cancelled, surrendered in lieu of revocation, or revoked in any 
State.
    (b) Good moral character of owners. An AMC shall not be registered 
by a State if any person that owns more than 10 percent of the AMC--
    (1) Is determined by the State appraiser certifying and licensing 
agency not to have good moral character; or
    (2) Fails to submit to a background investigation carried out by 
the State appraiser certifying and licensing agency.


Sec.  34.216  Information to be presented to the Appraisal Subcommittee 
by participating States.

    Each State electing to register AMCs for purposes of permitting 
AMCs to provide appraisal management services relating to covered 
transactions in the State must submit to the Appraisal Subcommittee the 
information required to be submitted by Appraisal Subcommittee 
regulations or guidance concerning AMCs that operate in the State.

Board of Governors of the Federal Reserve System

    For the reasons set forth in the preamble, the Board proposes to 
amend 12 CFR parts 208 and 225, as follows:

PART 208--MEMBERSHIP OF STATE BANKING INSTITUTIONS IN THE FEDERAL 
RESERVE SYSTEM (REGULATION H)

0
3. The authority citation for part 208 is revised to read as follows:

    Authority: 12 U.S.C. 24, 36, 92a, 93a, 248(a), 248(c), 321-338a, 
371d, 461, 481-486, 601, 611, 1814, 1816, 1818, 1820(d)(9), 1833(j), 
1828(o), 1831, 1831o, 1831p-1, 1831r-1, 1831w, 1831x, 1835a, 1882, 
2901-2907, 3105, 3310, 3331-3351, 3353, and 3905-3909; 15 U.S.C. 
78b, 78l(b), 78l(i), 780-4(c)(5), 78q, 78q-1, 78w, 1681s, 1681w, 
6801 and 6805; 31 U.S.C. 5318; 42 U.S.C. 4012a, 4104b, 4106, and 
4128.

0
4. Revise the heading of subpart E to read as follows:

Subpart E--Real Estate Lending, Appraisal Standards, and Minimum 
Requirements for Appraisal Management Companies

0
5. Section 208.50 is revised to read as follows:


Sec.  208.50  Authority, purpose, and scope.

    (a) Authority. Subpart E of Regulation H (12 CFR part 208, subpart 
E) is issued by the Board of Governors of the Federal Reserve System 
under section 304 of the Federal Deposit Insurance Corporation 
Improvement Act of 1991, (12 U.S.C 1828(o)), Title XI of the Financial 
Institutions Reform, Recovery, and Enforcement Act, (12 U.S.C 3331-
3351), and section 1473 of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act, (12 U.S.C. 3353).
    (b) Purpose and scope. This subpart E prescribes standards for real 
estate lending to be used by member banks in adopting internal real 
estate lending policies. The standards applicable to appraisals 
rendered in connection with federally related transactions entered into 
by member banks and the minimum requirements for Appraisal Management 
Companies are set forth in

[[Page 19537]]

12 CFR part 225, subparts G and M respectively (Regulation Y).

PART 225--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL 
(REGULATION Y)

0
6. The authority citation for part 225 is revised to read as follows:

    Authority: 12 U.S.C. 1844(b), 3106 and 3108, 1817(j)(13), 
1818(b), 1831i, 1972, 3310, 3331-3351 and 3353 and the International 
Lending Supervision Act of 1983 (Pub. L. 98-181, title IX). The BHC 
Act is codified at 12 U.S.C. 1841, et seq.

0
7. Subpart M is added to part 225 to read as follows:

Subpart M--Minimum Requirements for Appraisal Management Companies

Sec.
225.190 Authority, purpose, and scope.
225.191 Definitions.
225.192 Appraiser panel.
225.193 Appraisal management company registration.
225.194 Requirements for Federally regulated appraisal management 
companies.
225.195 Registration limitations.
225.196 Information to be presented to the Appraisal Subcommittee by 
participating States.


Sec.  225.190  Authority, purpose, and scope.

    (a) Authority. This subpart is issued by the Board of Governors of 
the Federal Reserve System (the Board) under title XI of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) 
(Pub. L. No. 101-73, 103 Stat. 183 (1989)), 12 U.S.C. 3310, 3331-3351, 
section 1473 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act, 12 U.S.C. 3353, and section 5(b) of the Bank Holding 
Company Act, 12 U.S.C. 1844(b).
    (b) Purpose and scope. (1) The purpose of this subpart is to 
implement sections 1109, 1117, 1121, and 1124 of FIRREA Title XI, 12 
U.S.C. 3338, 3346, 3350, and 3353.
    Title XI provides protection for federal financial and public 
policy interests in real estate related transactions by requiring real 
estate appraisals used in connection with federally related 
transactions to be performed in writing, in accordance with uniform 
standards, by appraisers whose competency has been demonstrated and 
whose professional conduct will be subject to effective supervision. 
This subpart implements the requirements of title XI as amended by the 
Dodd-Frank Wall Street Reform and Consumer Protection Act and applies 
to all federally related transactions entered into by the Board or by 
institutions regulated by the Board and applies to States and to 
appraisal management companies (AMCs) performing appraisal management 
services in connection with consumer credit transactions secured by a 
consumer's principal dwelling or securitizations of those transactions.
    (2) This subpart:
    (i) Identifies which real estate related financial transactions 
require the services of an appraiser.
    (ii) Prescribes which categories of federally related transactions 
shall be appraised by a State certified appraiser and which by a State 
licensed appraiser;
    (iii) Prescribes minimum standards for the performance of real 
estate appraisals in connection with federal related transactions under 
the jurisdiction of the Board;
    (iv) Prescribes minimum requirements to be applied by participating 
States in the registration and supervision of appraisal management 
companies (AMCs); and
    (v) Prescribes minimum requirements to be applied by participating 
States to report certain information concerning appraisal management 
companies registered with the States to a national registry of 
appraisal management companies.
    (c) Rule of construction. Nothing in this subpart should be 
construed to prevent a State from establishing requirements in addition 
to those in this subpart. In addition, nothing in this subpart should 
be construed to alter guidance in, and applicability of, the 
Interagency Appraisal and Evaluation Guidelines \1\ or other relevant 
agency guidance that cautions banks and bank holding companies, that 
each organization is accountable for overseeing the activities of third 
party service providers and ensuring that any services provided by a 
third party comply with applicable laws, regulations, and supervisory 
guidance applicable directly to the creditor.
---------------------------------------------------------------------------

    \1\ 75 FR 77450 (December 10, 2010).
---------------------------------------------------------------------------


Sec.  225.191  Definitions.

    For purposes of this subpart:
    (a) Affiliate has the meaning provided in 12 U.S.C. 1841.
    (b) AMC National Registry means the registry of State-registered 
appraisal management companies (AMCs) and Federally regulated AMCs 
maintained by the Appraisal Subcommittee.
    (c) Appraisal Foundation means the Appraisal Foundation established 
on November 30, 1987, as a not-for-profit corporation under the laws of 
Illinois.
    (d)(1) Appraisal management company (AMC) means a person that:
    (i) Provides appraisal management services to creditors or to 
secondary mortgage market participants, including affiliates;
    (ii) Provides such services in connection with valuing a consumer's 
principal dwelling as security for a consumer credit transaction or 
incorporating such transactions into securitizations; and
    (iii) Within a given year, oversees an appraiser panel of more than 
15 State-certified or State-licensed appraisers in a State or 25 or 
more State-certified or State-licensed appraisers in two or more 
States, as described in Sec.  225.192;
    (2) An AMC does not include a department or division of an entity 
that provides appraisal management services only to that entity.
    (e) Appraisal management services means one or more of the 
following:
    (1) Recruiting, selecting, and retaining appraisers;
    (2) Contracting with State-certified or State-licensed appraisers 
to perform appraisal assignments;
    (3) Managing the process of having an appraisal performed, 
including providing administrative services such as receiving appraisal 
orders and appraisal reports, submitting completed appraisal reports to 
creditors and secondary market participants, collecting fees from 
creditors and secondary market participants for services provided, and 
paying appraisers for services performed; and
    (4) Reviewing and verifying the work of appraisers.
    (f) Appraiser panel means a network or panel of licensed or 
certified appraisers who are independent contractors to the AMC.
    (g) Consumer credit has the meaning provided in 12 CFR 
1026.2(a)(12).
    (h) Covered transaction means any consumer credit transaction 
secured by the consumer's principal dwelling.
    (i) Creditor has the meaning provided in 12 CFR 1026.2(a)(17).
    (j) Federally regulated AMC means an AMC that is owned and 
controlled by an insured depository institution, as defined in 12 
U.S.C. 1813, or an insured credit union, as defined in 12 U.S.C. 1752, 
and regulated by the Office of the Comptroller of the Currency, the 
Board of Governors of the Federal Reserve System, the Federal Deposit 
Insurance Corporation or the National Credit Union Administration.
    (k) Federally related transaction regulations means regulations 
established by the Office of the Comptroller of the Currency, the Board 
of Governors of the Federal Reserve System, the Federal Deposit 
Insurance Corporation, or the National Credit Union Administration, 
pursuant to

[[Page 19538]]

sections 1112, 1113, and 1114 of FIRREA Title XI, 12 U.S.C. 3341-3343.
    (l) Person has the meaning in 12 CFR 1026.2(a)(22).
    (m) Principal dwelling means a residential structure that contains 
one to four units, whether or not that structure is attached to real 
property, that is also a consumer's primary residence. The term 
includes an individual condominium unit, cooperative unit, mobile home, 
and trailer, if it is used as a residence. A vacation or other second 
home is not a principal dwelling. A consumer can have only one 
principal dwelling at a time. However, if a consumer buys or builds a 
new dwelling that will become the consumer's principal dwelling within 
a year or upon the completion of construction, the new dwelling is 
considered the principal dwelling.
    (n) Secondary mortgage market participant means a guarantor or 
insurer of mortgage-backed securities, or an underwriter or issuer of 
mortgage-backed securities. Secondary mortgage market participant only 
includes an individual investor in a mortgage-backed security if that 
investor also serves in the capacity of a guarantor, insurer, 
underwriter, or issuer for the mortgage-backed security.
    (o) States mean the 50 States and the District of Columbia and the 
territories of Guam, Mariana Islands, Puerto Rico, and the U.S. Virgin 
Islands.
    (p) Uniform Standards of Professional Appraisal Practice (USPAP) 
means the appraisal standards promulgated by the Appraisal Standards 
Board of the Appraisal Foundation.


Sec.  225.192  Appraiser panel.

    For purposes of determining whether, within a given year, an AMC 
oversees an appraiser panel of more than 15 State-certified or State-
licensed appraisers in a State or 25 or more State-certified or State-
licensed appraisers in two or more States under Sec.  
225.191(d)(1)(iii)--
    (a) An appraiser is deemed part of the AMC's appraiser panel as of 
the earliest date on which the AMC:
    (1) Affirms eligibility or acceptance of the appraiser for the 
AMC's consideration for future appraisal assignments; or
    (2) Engages the appraiser to perform one or more appraisals on 
behalf of a creditor or secondary mortgage market principal.
    (b) An appraiser who is deemed part of the AMC's appraiser panel 
pursuant to paragraph (a) of this section is deemed to remain on the 
panel until the date on which the AMC:
    (1) Sends written notice to the appraiser removing the appraiser 
from the appraiser panel, with an explanation of its action; or
    (2) Receives written notice from the appraiser asking to be removed 
from the appraiser panel or notice of the death or incapacity of the 
appraiser.
    (c) If an appraiser is removed from an AMC's appraiser panel 
pursuant to paragraph (b) of this section, but the AMC subsequently re-
admits or engages the appraiser at any time during the twelve months 
after the AMC's removal, the removal will be deemed not to have 
occurred, and the appraiser will be deemed to have been part of the 
AMC's appraiser panel without interruption.
    (d) The annual period for purposes of counting appraisers on an 
AMC's appraiser panel may be the calendar year or a 12-month period 
established by law or rule of each State with which the AMC is required 
to register.


Sec.  225.193  Appraisal management company registration.

    Each State electing to register AMCs pursuant to paragraph (b)(1) 
of this section must:
    (a) Establish and maintain within the State appraiser certifying 
and licensing agency a licensing program that is subject to the 
limitations set forth in Sec.  225.195 and with the legal authority and 
mechanisms to:
    (1) Review and approve or deny an AMC's application for initial 
registration;
    (2) Review and renew or review and deny an AMC's registration 
periodically;
    (3) Examine the books and records of an AMC operating in the State 
and require the AMC to submit reports, information, and documents;
    (4) Verify that the appraisers on the AMC's appraiser list, 
network, panel, or roster hold valid State certifications or licenses, 
as applicable;
    (5) Conduct investigations of AMCs to assess potential violations 
of applicable appraisal-related laws, regulations, or orders;
    (6) Discipline, suspend, terminate, or deny renewal of the 
registration of an AMC that violates applicable appraisal-related laws, 
regulations, or orders; and
    (7) Report an AMC's violation of applicable appraisal-related laws, 
regulations, or orders, as well as disciplinary and enforcement actions 
and other relevant information about an AMC's operations, to the 
Appraisal Subcommittee.
    (b) Impose requirements on AMCs that are not owned and controlled 
by an insured depository institution, an insured credit union, and not 
regulated by a Federal financial institutions regulatory agency to:
    (1) Register with and be subject to supervision by the State 
appraiser certifying and licensing agency;
    (2) Use only State-certified or State-licensed appraisers for 
Federally related transactions in conformity with any Federally related 
transaction regulations;
    (3) Establish and comply with processes and controls reasonably 
designed to ensure that the AMC, in engaging an appraiser, selects an 
appraiser who is independent of the transaction and who has the 
requisite education, expertise, and experience necessary to competently 
complete the appraisal assignment for the particular market and 
property type;
    (4) Direct the appraiser to perform the assignment in accordance 
with USPAP; and
    (5) Establish and comply with processes and controls reasonably 
designed to ensure that the AMC conducts its appraisal management 
services in accordance with the requirements of section 129E(a)-(i) of 
the Truth in Lending Act, 15 U.S.C. 1639e(a)-(i), and regulations 
thereunder.


Sec.  225.194  Requirements for Federally regulated appraisal 
management companies.

    (a) Requirements in providing services. To provide appraisal 
management services for a creditor or secondary mortgage market 
participant relating to a covered transaction, a Federally regulated 
AMC must comply with the requirements in Sec. Sec.  225.193(b)(2) 
through (5).
    (b) Reporting information for the AMC National Registry. A 
Federally regulated AMC must:
    (1) Report to the State or States in which it operates the 
information required to be submitted by the State pursuant to the 
Appraisal Subcommittee's policies regarding:
    (i) The determination of the AMC National Registry fee, including 
but not necessarily limited to a statement that the AMC is a Federally 
regulated AMC; and
    (ii) The collection of information related to the limitations set 
forth in Sec.  225.195.
    (2) Contact the Appraisal Subcommittee for alternative arrangements 
to submit the information described in paragraph (b)(1) of this section 
if a State in which a Federally regulated AMC operates has not 
established a process for accepting the information from Federally 
regulated AMCs.

[[Page 19539]]

Sec.  225.195  Registration limitations.

    (a) Appraiser certification or licensing of owners. An AMC shall 
not be registered by a State or included on the AMC National Registry 
if such AMC, in whole or in part, directly or indirectly, is owned by 
any person who has had an appraiser license or certificate refused, 
denied, cancelled, surrendered in lieu of revocation, or revoked in any 
State.
    (b) Good moral character of owners. An AMC shall not be registered 
by a State if any person that owns more than 10 percent of the AMC--
    (1) Is determined by the State appraiser certifying and licensing 
agency not to have good moral character; or
    (2) Fails to submit to a background investigation carried out by 
the State appraiser certifying and licensing agency.


Sec.  225.196  Information to be presented to the Appraisal 
Subcommittee by participating States.

    Each State electing to register AMCs for purposes of permitting 
AMCs to provide appraisal management services relating to covered 
transactions in the State must submit to the Appraisal Subcommittee the 
information required to be submitted by Appraisal Subcommittee 
regulations or guidance concerning AMCs that operate in the State.

Federal Deposit Insurance Corporation

Authority and Issuance
    For the reasons set forth in the preamble, the FDIC proposes to 
amend 12 CFR parts 323 and 390 as follows:

PART 323--APPRAISALS

0
8. Revise the authority citation for part 323 to read as follows:

    Authority: 12 U.S.C. 1818, 1819 [``Seventh'' and ``Tenth''] and 
3331 et seq.

0
9. Add a heading for new subpart A to read as follows:

Subpart A--Appraisals Generally


Sec. Sec.  323.1 through 323.7--  [Designated as subpart A]

0
10. Designate Sec. Sec.  323.1 through 323.7 under new subpart A.


Sec. Sec.  323.1, 323.3, 323.4, and 323.5--  [Amended]

0
11. Amend Sections 323.1, 323.3, 323.4, and 323.5 by removing ``part'' 
and adding ``subpart'' in its place in each instance in which it 
appears.
0
12. Add subpart B to part 323 to read as follows:

Subpart B--Appraisal Management Company Minimum Requirements

Sec.
323.210 Authority, purpose, and scope.
323.211 Definitions.
323.212 Appraiser panel.
323.213 Appraisal management company registration.
323.214 Requirements for Federally regulated appraisal management 
companies.
323.215 Registration limitations.
323.216 Information to be presented to the Appraisal Subcommittee by 
participating States.


Sec.  323.210  Authority, purpose, and scope.

    (a) Authority. This subpart is issued under 12 U.S.C. 1818, 1819 
[``Seventh'' and ``Tenth''] and Title XI of the Financial Institutions 
Reform, Recovery, and Enforcement Act (FIRREA), as amended by the Dodd-
Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank 
Act) (Pub. L. 111-203, 124 Stat. 1376 (2010)), 12 U.S.C. 3331 et seq.
    (b) Purpose. The purpose of this subpart is to implement sections 
1109, 1117, 1121, and 1124 of FIRREA Title XI, 12 U.S.C. 3338, 3346, 
3350, and 3353.
    (c) Scope. This subpart applies to States and to appraisal 
management companies (AMCs) providing appraisal management services in 
connection with consumer credit transactions secured by a consumer's 
principal dwelling or securitizations of those transactions.
    (d) Rule of construction. Nothing in this subpart should be 
construed to prevent a State from establishing requirements in addition 
to those in this subpart. In addition, nothing in this subpart should 
be construed to alter guidance in, and applicability of, the 
Interagency Appraisal and Evaluation Guidelines \1\ or other relevant 
agency guidance that cautions banks, bank holding companies, Federal 
savings associations, state savings association, and credit unions, as 
applicable, that each such entity is accountable for overseeing the 
activities of third party service providers and ensuring that any 
services provided by a third party comply with applicable laws, 
regulations, and supervisory guidance applicable directly to the 
financial institution.
---------------------------------------------------------------------------

    \1\ 75 FR 77450 (December 10, 2010).
---------------------------------------------------------------------------


Sec.  323.211  Definitions.

    For purposes of this subpart:
    (a) Affiliate has the meaning provided in 12 U.S.C. 1841.
    (b) AMC National Registry means the registry of State-registered 
appraisal management companies (AMCs) and Federally regulated AMCs 
maintained by the Appraisal Subcommittee.
    (c)(1) Appraisal management company (AMC) means a person that:
    (i) Provides appraisal management services to creditors or to 
secondary mortgage market participants, including affiliates;
    (ii) Provides such services in connection with valuing a consumer's 
principal dwelling as security for a consumer credit transaction or 
incorporating such transactions into securitizations; and
    (iii) Within a given year, oversees an appraiser panel of more than 
15 State-certified or State-licensed appraisers in a State or 25 or 
more State-certified or State-licensed appraisers in two or more 
States, as described in Sec.  323.212;
    (2) An AMC does not include a department or division of an entity 
that provides appraisal management services only to that entity.
    (d) Appraisal management services means one or more of the 
following:
    (1) Recruiting, selecting, and retaining appraisers;
    (2) Contracting with State-certified or State-licensed appraisers 
to perform appraisal assignments;
    (3) Managing the process of having an appraisal performed, 
including providing administrative services such as receiving appraisal 
orders and appraisal reports, submitting completed appraisal reports to 
creditors and secondary market participants, collecting fees from 
creditors and secondary market participants for services provided, and 
paying appraisers for services performed; and
    (4) Reviewing and verifying the work of appraisers.
    (e) Appraiser panel means a network or panel of licensed or 
certified appraisers who are independent contractors to the AMC.
    (f) Appraisal Subcommittee means the Appraisal Subcommittee of the 
Federal Financial Institutions Examination Council.
    (g) Consumer credit has the meaning provided in 12 CFR 
1026.2(a)(12).
    (h) Covered transaction means any consumer credit transaction 
secured by the consumer's principal dwelling.
    (i) Creditor has the meaning provided in 12 CFR 1026.2(a)(17).
    (j) Federally regulated AMC means an AMC that is owned and 
controlled by an insured depository institution, as defined in 12 
U.S.C. 1813, or an insured credit union, as defined in 12 U.S.C. 1752, 
and that is regulated by the Office of the Comptroller of the Currency, 
the Board of Governors of the Federal Reserve System, the National 
Credit

[[Page 19540]]

Union Administration, or the Federal Deposit Insurance Corporation.
    (k) Federally related transaction regulations means regulations 
established by the Office of the Comptroller of the Currency, the Board 
of Governors of the Federal Reserve System, the Federal Deposit 
Insurance Corporation, or the National Credit Union Administration, 
pursuant to sections 1112, 1113, and 1114 of FIRREA Title XI, 12 U.S.C. 
3341-3343.
    (l) Person has the meaning in 12 CFR 1026.2(a)(22).
    (m) Principal dwelling means a residential structure that contains 
one to four units, whether or not that structure is attached to real 
property, that is also a consumer's primary residence. The term 
includes an individual condominium unit, cooperative unit, mobile home, 
and trailer, if it is used as a residence. A vacation or other second 
home is not a principal dwelling. A consumer can have only one 
principal dwelling at a time. However, if a consumer buys or builds a 
new dwelling that will become the consumer's principal dwelling within 
a year or upon the completion of construction, the new dwelling is 
considered the principal dwelling.
    (n) Secondary mortgage market participant means a guarantor or 
insurer of mortgage-backed securities, or an underwriter or issuer of 
mortgage-backed securities. Secondary mortgage market participant only 
includes an individual investor in a mortgage-backed security if that 
investor also serves in the capacity of a guarantor, insurer, 
underwriter, or issuer for the mortgage-backed security.
    (o) States mean the 50 States and the District of Columbia and the 
territories of Guam, Mariana Islands, Puerto Rico, and the U.S. Virgin 
Islands.
    (p) Uniform Standards of Professional Appraisal Practice (USPAP) 
means the appraisal standards promulgated by the Appraisal Standards 
Board of the Appraisal Foundation.


Sec.  323.212  Appraiser panel.

    For purposes of determining whether, within a given year, an AMC 
oversees an appraiser panel of more than 15 State-certified or State-
licensed appraisers in a State or 25 or more State-certified or State-
licensed appraisers in two or more States under Sec.  
323.211(c)(1)(iii)--
    (a) An appraiser is deemed part of the AMC's appraiser panel as of 
the earliest date on which the AMC:
    (1) Affirms eligibility or acceptance of the appraiser for the 
AMC's consideration for future appraisal assignments; or
    (2) Engages the appraiser to perform one or more appraisals on 
behalf of a creditor or secondary mortgage market principal.
    (b) An appraiser who is deemed part of the AMC's appraiser panel 
pursuant to paragraph (a) of this section is deemed to remain on the 
panel until the date on which the AMC:
    (1) Sends written notice to the appraiser removing the appraiser 
from the appraiser panel, with an explanation of its action; or
    (2) Receives written notice from the appraiser asking to be removed 
from the appraiser panel or notice of the death or incapacity of the 
appraiser.
    (c) If an appraiser is removed from an AMC's appraiser panel 
pursuant to paragraph (b) of this section, but the AMC subsequently re-
admits or engages the appraiser at any time during the twelve months 
after the AMC's removal, the removal will be deemed not to have 
occurred, and the appraiser will be deemed to have been part of the 
AMC's appraiser panel without interruption.
    (d) The annual period for purposes of counting appraisers on an 
AMC's appraiser panel may be the calendar year or a 12-month period 
established by law or rule of each State with which the AMC is required 
to register.


Sec.  323.213  Appraisal management company registration.

    Each State electing to register AMCs pursuant to paragraph (b)(1) 
of this section must:
    (a) Establish and maintain within the State appraiser certifying 
and licensing agency a licensing program that is subject to the 
limitations set forth in Sec.  323.215 and with the legal authority and 
mechanisms to:
    (1) Review and approve or deny an AMC's application for initial 
registration;
    (2) Review and renew or review and deny an AMC's registration 
periodically;
    (3) Examine the books and records of an AMC operating in the State 
and require the AMC to submit reports, information, and documents;
    (4) Verify that the appraisers on the AMC's appraiser list, 
network, panel, or roster hold valid State certifications or licenses, 
as applicable;
    (5) Conduct investigations of AMCs to assess potential violations 
of applicable appraisal-related laws, regulations, or orders;
    (6) Discipline, suspend, terminate, or deny renewal of the 
registration of an AMC that violates applicable appraisal-related laws, 
regulations, or orders; and
    (7) Report an AMC's violation of applicable appraisal-related laws, 
regulations, or orders, as well as disciplinary and enforcement actions 
and other relevant information about an AMC's operations, to the 
Appraisal Subcommittee.
    (b) Impose requirements on AMCs that are not owned and controlled 
by an insured depository institution or an insured credit union and not 
regulated by a Federal financial institution regulatory agency to:
    (1) Register with and be subject to supervision by the State 
appraiser certifying and licensing agency;
    (2) Use only State-certified or State-licensed appraisers for 
Federally regulated transactions in conformity with any Federally 
related transaction regulations;
    (3) Establish and comply with processes and controls reasonably 
designed to ensure that the AMC, in engaging an appraiser, selects an 
appraiser who is independent of the transaction and who has the 
requisite education, expertise, and experience necessary to competently 
complete the appraisal assignment for the particular market and 
property type;
    (4) Direct the appraiser to perform the assignment in accordance 
with USPAP; and
    (5) Establish and comply with processes and controls reasonably 
designed to ensure that the AMC conducts its appraisal management 
services in accordance with the requirements of section 129E(a)-(i) of 
the Truth in Lending Act, 15 U.S.C. 1639e(a)-(i), and regulations 
thereunder.


Sec.  323.214  Requirements for Federally regulated appraisal 
management companies.

    (a) Requirements in providing services. To provide appraisal 
management services for a creditor or secondary mortgage market 
participant relating to a covered transaction, a Federally regulated 
AMC must comply with the requirements in Sec. Sec.  323.213(b)(2) 
through (5).
    (b) Reporting information for the AMC National Registry. A 
Federally regulated AMC must:
    (1) Report to the State or States in which it operates the 
information required to be submitted by the State pursuant to the 
Appraisal Subcommittee's policies regarding:
    (i) The determination of the AMC National Registry fee, including 
but not necessarily limited to a statement that the AMC is a Federally 
regulated AMC; and
    (ii) The collection of information related to the limitations set 
forth in Sec.  323.215, as applicable.
    (2) Contact the Appraisal Subcommittee for alternative

[[Page 19541]]

arrangements to submit the information described in paragraph (b)(1) of 
this section if a State in which a Federally regulated AMC operates has 
not established a process for accepting the information from Federally 
regulated AMCs.


Sec.  323.215  Registration limitations.

    (a) Appraiser certification or licensing of owners. An AMC shall 
not be registered by a State or included on the AMC National Registry 
if such AMC, in whole or in part, directly or indirectly, is owned by 
any person who has had an appraiser license or certificate refused, 
denied, cancelled, surrendered in lieu of revocation, or revoked in any 
State.
    (b) Good moral character of owners. An AMC shall not be registered 
by a State if any person that owns more than 10 percent of the AMC--
    (1) Is determined by the State appraiser certifying and licensing 
agency not to have good moral character; or
    (2) Fails to submit to a background investigation carried out by 
the State appraiser certifying and licensing agency.


Sec.  323.216  Information to be presented to the Appraisal 
Subcommittee by participating States.

    Each State electing to register AMCs for purposes of permitting 
AMCs to provide appraisal management services relating to covered 
transactions in the State must submit to the Appraisal Subcommittee the 
information required to be submitted by Appraisal Subcommittee 
regulations or guidance concerning AMCs that operate in the State.

PART 390--REGULATIONS TRANSFERRED FROM THE OFFICE OF THRIFT 
SUPERVISION

0
13. The authority citation for part 390 continues to read as follows:

    Authority: 12 U.S.C. 1819.
    Subpart A also issued under 12 U.S.C. 1820.
    Subpart B also issued under 12 U.S.C. 1818.
    Subpart C also issued under 5 U.S.C. 504; 554-557; 12 U.S.C. 
1464; 1467; 1468; 1817; 1818; 1820; 1829; 3349, 4717; 15 U.S.C. 78l; 
78o-5; 78u-2; 28 U.S.C. 2461 note; 31 U.S.C. 5321; 42 U.S.C. 4012a.
    Subpart D also issued under 12 U.S.C. 1817; 1818; 1820; 15 
U.S.C. 78l.
    Subpart E also issued under 12 U.S.C. 1813; 1831m; 15 U.S.C. 78.
    Subpart F also issued under 5 U.S.C. 552; 559; 12 U.S.C. 2901 et 
seq.
    Subpart G also issued under 12 U.S.C. 2810 et seq., 2901 et 
seq.; 15 U.S.C. 1691; 42 U.S.C. 1981, 1982, 3601-3619.
    Subpart I also issued under 12 U.S.C. 1831x.
    Subpart J also issued under 12 U.S.C. 1831p-1.
    Subpart K also issued under 12 U.S.C. 1817; 1818; 15 U.S.C. 78c; 
78l.
    Subpart L also issued under 12 U.S.C. 1831p-1.
    Subpart M also issued under 12 U.S.C. 1818.
    Subpart N also issued under 12 U.S.C. 1821.
    Subpart O also issued under 12 U.S.C. 1828.
    Subpart P also issued under 12 U.S.C. 1470; 1831e; 1831n; 1831p-
1; 3339.
    Subpart Q also issued under 12 U.S.C. 1462; 1462a; 1463; 1464.
    Subpart R also issued under 12 U.S.C. 1463; 1464; 1831m; 1831n; 
1831p-1.
    Subpart S also issued under 12 U.S.C. 1462; 1462a; 1463; 1464; 
1468a; 1817; 1820; 1828; 1831e; 1831o; 1831p-1; 1881-1884; 3207; 
3339; 15 U.S.C. 78b; 78l; 78m; 78n; 78p; 78q; 78w; 31 U.S.C. 5318; 
42 U.S.C. 4106.
    Subpart T also issued under 12 U.S.C. 1462a; 1463; 1464; 15 
U.S.C. 78c; 78l; 78m; 78n; 78w.
    Subpart U also issued under 12 U.S.C. 1462a; 1463; 1464; 15 
U.S.C. 78c; 78l; 78m; 78n; 78p; 78w; 78d-1; 7241; 7242; 7243; 7244; 
7261; 7264; 7265.
    Subpart V also issued under 12 U.S.C. 3201-3208.
    Subpart W also issued under 12 U.S.C. 1462a; 1463; 1464; 15 
U.S.C. 78c; 78l; 78m; 78n; 78p; 78w.
    Subpart Y also issued under 12 U.S.C. 1831o.
    Subpart Z also issued under 12 U.S.C. 1462; 1462a; 1463; 1464; 
1828 (note).

Subpart X--[Removed and Reserved]

0
14. Remove and reserve subpart X consisting of Sec. Sec.  390.440 
through 390.447.

Bureau of Consumer Financial Protection

Authority and Issuance
    For the reasons stated above, the Bureau amends Regulation Z, 12 
CFR part 1026, as follows:

PART 1026--TRUTH IN LENDING (REGULATION Z)

0
14. The authority citation for part 1026 is revised to read as follows:

    Authority: 12 U.S.C. 2601, 2603-2605, 2607, 2609, 2617, 3353, 
5511, 5512, 5532, 5581; 15 U.S.C. 1601 et seq.

Subpart A--General

0
15. Section 1026.1 is amended by revising paragraph (a) to read as 
follows:


Sec.  1026.1  Authority, purpose, coverage, organization, enforcement, 
and liability.

    (a) Authority. This part, known as Regulation Z, is issued by the 
Bureau of Consumer Financial Protection to implement the Federal Truth 
in Lending Act, which is contained in title I of the Consumer Credit 
Protection Act, as amended (15 U.S.C. 1601 et seq.). This part also 
implements title XII, section 1204 of the Competitive Equality Banking 
Act of 1987 (Public Law 100-86, 101 Stat. 552). Furthermore, this part 
implements certain provisions of the Real Estate Settlement Procedures 
Act of 1974, as amended (12 U.S.C. 2601 et seq.). In addition, this 
part implements certain provisions of the Financial Institutions 
Reform, Recovery, and Enforcement Act, as amended (12 U.S.C. 3331 et 
seq.). The Bureau's information-collection requirements contained in 
this part have been approved by the Office of Management and Budget 
under the provisions of 44 U.S.C. 3501 et seq. and have been assigned 
OMB No. 3170-0015 (Truth in Lending).
* * * * *

Subpart E--Special Rules for Certain Home Mortgage Transactions

0
16. Section 1026.42 is amended by adding paragraph (h), as follows:


Sec.  1026.42  Valuation independence.

* * * * *
    (h) The Bureau issued a joint rule to implement the appraisal 
management company minimum requirements in the Financial Institutions 
Reform, Recovery, and Enforcement Act, as amended by section 1473 of 
the Dodd-Frank Wall Street Reform and Consumer Protection Act. See 12 
CFR part 34.

Federal Housing Finance Agency

Authority and Issuance
    For the reasons set forth in the Supplementary Information, FHFA 
proposes to amend 12 CFR part 1222, as follows:

PART 1222--APPRAISALS

0
17. The authority citation for part 1222 is revised to read as follows:

    Authority: 12 U.S.C. 4501 et seq., 12 U.S.C. 4526 and 15 U.S.C. 
1639h.

0
18. Add subpart B to part 1222 to read as follows:

Subpart B--Appraisal Management Company Minimum Requirements

Sec.
1222.20 Authority, purpose, and scope.
1222.21 Definitions.
1222.22 Appraiser panel.
1222.23 Appraisal management company registration.
1222.24 Requirements for Federally regulated appraisal management 
companies.
1222.25 Registration limitations.

[[Page 19542]]

1222.26 Information to be presented to the Appraisal Subcommittee by 
participating States.


Sec.  1222.20  Authority, purpose, and scope.

    (a) Authority. This subpart is issued by the Federal Housing 
Finance Agency under 12 U.S.C. 4501 et seq., 12 U.S.C. 4526, and Title 
XI of the Financial Institutions Reform, Recovery, and Enforcement Act 
(FIRREA), as amended by the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (the Dodd-Frank Act) (Pub. L. 111-203, 124 Stat. 1376 
(2010)), 12 U.S.C. 3331 et seq.
    (b) Purpose. The purpose of this subpart is to implement sections 
1109, 1117, 1121, and 1124 of FIRREA Title XI, 12 U.S.C. 3338, 3346, 
3350, and 3353.
    (c) Scope. This subpart applies to States and to appraisal 
management companies (AMCs) providing appraisal management services in 
connection with consumer credit transactions secured by a consumer's 
principal dwelling or securitizations of those transactions.
    (d) Rule of construction. Nothing in this subpart should be 
construed to prevent a State from establishing requirements in addition 
to those in this subpart. In addition, nothing in this subpart should 
be construed to alter guidance in, and applicability of, the 
Interagency Appraisal and Evaluation Guidelines \1\ or other relevant 
agency guidance that cautions banks, bank holding companies, Federal 
savings associations, state savings associations, and credit unions, as 
applicable, that each such entity is accountable for overseeing the 
activities of third party service providers and ensuring that any 
services provided by a third party comply with applicable laws, 
regulations, and supervisory guidance applicable directly to the 
financial institution.
---------------------------------------------------------------------------

    \1\ 75 FR 77450 (December 10, 2010).
---------------------------------------------------------------------------


Sec.  1222.21  Definitions.

    For purposes of this subpart:
    (a) Affiliate has the meaning provided in 12 U.S.C. 1841.
    (b) AMC National Registry means the registry of State-registered 
appraisal management companies (AMCs) and Federally regulated AMCs 
maintained by the Appraisal Subcommittee.
    (c)(1) Appraisal management company (AMC) means a person that:
    (i) Provides appraisal management services to creditors or to 
secondary mortgage market participants, including affiliates;
    (ii) Provides such services in connection with valuing a consumer's 
principal dwelling as security for a consumer credit transaction or 
incorporating such transactions into securitizations; and
    (iii) Within a given year, oversees an appraiser panel of more than 
15 State-certified or State-licensed appraisers in a State or 25 or 
more State-certified or State-licensed appraisers in two or more 
States, as described in Sec.  1222.22;
    (2) An AMC does not include a department or division of an entity 
that provides appraisal management services only to that entity.
    (d) Appraisal management services means one or more of the 
following:
    (1) Recruiting, selecting, and retaining appraisers;
    (2) Contracting with State-certified or State-licensed appraisers 
to perform appraisal assignments;
    (3) Managing the process of having an appraisal performed, 
including providing administrative services such as receiving appraisal 
orders and appraisal reports, submitting completed appraisal reports to 
creditors and secondary market participants, collecting fees from 
creditors and secondary market participants for services provided, and 
paying appraisers for services performed; and
    (4) Reviewing and verifying the work of appraisers.
    (e) Appraiser panel means a network or panel of licensed or 
certified appraisers who are independent contractors to the AMC.
    (f) Appraisal Subcommittee means the Appraisal Subcommittee of the 
Federal Financial Institutions Examination Council.
    (g) Consumer credit has the meaning provided in 12 CFR 
1026.2(a)(12).
    (h) Covered transaction means any consumer credit transaction 
secured by the consumer's principal dwelling.
    (i) Creditor has the meaning provided in 12 CFR 1026.2(a)(17).
    (j) Federally regulated AMC means an AMC that is owned and 
controlled by an insured depository institution, as defined in 12 
U.S.C. 1813, or an insured credit union, as defined in 12 U.S.C. 1752, 
and that is regulated by the Office of the Comptroller of the Currency, 
the Board of Governors of the Federal Reserve System, the National 
Credit Union Administration, or the Federal Deposit Insurance 
Corporation.
    (k) Federally related transaction regulations means regulations 
established by the Office of the Comptroller of the Currency, the Board 
of Governors of the Federal Reserve System, the Federal Deposit 
Insurance Corporation, or the National Credit Union Administration, 
pursuant to sections 1112, 1113, and 1114 of FIRREA Title XI, 12 U.S.C. 
3341-3343.
    (l) Person has the meaning in 12 CFR 1026.2(a)(22).
    (m) Principal dwelling means a residential structure that contains 
one to four units, whether or not that structure is attached to real 
property, that is also a consumer's primary residence. The term 
includes an individual condominium unit, cooperative unit, mobile home, 
and trailer, if it is used as a residence. A vacation or other second 
home is not a principal dwelling. A consumer can have only one 
principal dwelling at a time. However, if a consumer buys or builds a 
new dwelling that will become the consumer's principal dwelling within 
a year or upon the completion of construction, the new dwelling is 
considered the principal dwelling.
    (n) Secondary mortgage market participant means a guarantor or 
insurer of mortgage-backed securities, or an underwriter or issuer of 
mortgage-backed securities. Secondary mortgage market participant only 
includes an individual investor in a mortgage-backed security if that 
investor also serves in the capacity of a guarantor, insurer, 
underwriter, or issuer for the mortgage-backed security.
    (o) States mean the 50 States and the District of Columbia and the 
territories of Guam, Mariana Islands, Puerto Rico, and the U.S. Virgin 
Islands.
    (p) Uniform Standards of Professional Appraisal Practice (USPAP) 
means the appraisal standards promulgated by the Appraisal Standards 
Board of the Appraisal Foundation.


Sec.  1222.22  Appraiser panel.

    For purposes of determining whether, within a given year, an AMC 
oversees an appraiser panel of more than 15 State-certified or State-
licensed appraisers in a State or 25 or more State-certified or State-
licensed appraisers in two or more States under Sec.  
1222.21(c)(1)(iii)--
    (a) An appraiser is deemed part of the AMC's appraiser panel as of 
the earliest date on which the AMC:
    (1) Affirms eligibility or acceptance of the appraiser for the 
AMC's consideration for future appraisal assignments; or
    (2) Engages the appraiser to perform one or more appraisals on 
behalf of a creditor or secondary mortgage market principal.
    (b) An appraiser who is deemed part of the AMC's appraiser panel 
pursuant to paragraph (a) of this section is deemed to remain on the 
panel until the date on which the AMC:

[[Page 19543]]

    (1) Sends written notice to the appraiser removing the appraiser 
from the appraiser panel, with an explanation of its action; or
    (2) Receives written notice from the appraiser asking to be removed 
from the appraiser panel or notice of the death or incapacity of the 
appraiser.
    (c) If an appraiser is removed from an AMC's appraiser panel 
pursuant to paragraph (b) of this section, but the AMC subsequently re-
admits or engages the appraiser at any time during the twelve months 
after the AMC's removal, the removal will be deemed not to have 
occurred, and the appraiser will be deemed to have been part of the 
AMC's appraiser panel without interruption.
    (d) The annual period for purposes of counting appraisers on an 
AMC's appraiser panel may be the calendar year or a 12-month period 
established by law or rule of each State with which the AMC is required 
to register.


Sec.  1222.23  Appraisal management company registration.

    Each State electing to register AMCs pursuant to paragraph (b)(1) 
of this section must:
    (a) Establish and maintain within the State appraiser certifying 
and licensing agency a licensing program that is subject to the 
limitations set forth in Sec.  1222.25 and with the legal authority and 
mechanisms to:
    (1) Review and approve or deny an AMC's application for initial 
registration;
    (2) Review and renew or review and deny an AMC's registration 
periodically;
    (3) Examine the books and records of an AMC operating in the State 
and require the AMC to submit reports, information, and documents;
    (4) Verify that the appraisers on the AMC's appraiser list, 
network, panel, or roster hold valid State certifications or licenses, 
as applicable;
    (5) Conduct investigations of AMCs to assess potential violations 
of applicable appraisal-related laws, regulations, or orders;
    (6) Discipline, suspend, terminate, or deny renewal of the 
registration of an AMC that violates applicable appraisal-related laws, 
regulations, or orders; and
    (7) Report an AMC's violation of applicable appraisal-related laws, 
regulations, or orders, as well as disciplinary and enforcement actions 
and other relevant information about an AMC's operations, to the 
Appraisal Subcommittee.
    (b) Impose requirements on AMCs that are not owned and controlled 
by an insured depository institution or by an insured credit union and 
not regulated by a Federal financial institutions regulatory agency to:
    (1) Register with and be subject to supervision by the State 
appraiser certifying and licensing agency;
    (2) Use only State-certified or State-licensed appraisers for 
Federally related transactions in conformity with any Federally related 
transaction regulations;
    (3) Establish and comply with processes and controls reasonably 
designed to ensure that the AMC, in engaging an appraiser, selects an 
appraiser who is independent of the transaction and who has the 
requisite education, expertise, and experience necessary to competently 
complete the appraisal assignment for the particular market and 
property type;
    (4) Direct the appraiser to perform the assignment in accordance 
with USPAP; and
    (5) Establish and comply with processes and controls reasonably 
designed to ensure that the AMC conducts its appraisal management 
services in accordance with the requirements of section 129E(a)-(i) of 
the Truth in Lending Act, 15 U.S.C. 1639e(a)-(i), and regulations 
thereunder.


Sec.  1222.24  Requirements for Federally regulated appraisal 
management companies.

    (a) Requirements in providing services. To provide appraisal 
management services for a creditor or secondary mortgage market 
participant relating to a covered transaction, a Federally regulated 
AMC must comply with the requirements in Sec. Sec.  1222.23(b)(2) 
through (5).
    (b) Reporting information for the AMC National Registry. A 
Federally regulated AMC must:
    (1) Report to the State or States in which it operates the 
information required to be submitted by the State pursuant to the 
Appraisal Subcommittee's policies regarding:
    (i) The determination of the AMC National Registry fee, including 
but not necessarily limited to a statement that the AMC is a Federally 
regulated AMC; and
    (ii) The collection of information related to the limitations set 
forth in Sec.  1222.25, as applicable.
    (2) Contact the Appraisal Subcommittee for alternative arrangements 
to submit the information described in paragraph (b)(1) of this section 
if a State in which a Federally regulated AMC operates has not 
established a process for accepting the information from Federally 
regulated AMCs.


Sec.  1222.25  Registration limitations.

    (a) Appraiser certification or licensing of owners. An AMC shall 
not be registered by a State or included on the AMC National Registry 
if such AMC, in whole or in part, directly or indirectly, is owned by 
any person who has had an appraiser license or certificate refused, 
denied, cancelled, surrendered in lieu of revocation, or revoked in any 
State.
    (b) Good moral character of owners. An AMC shall not be registered 
by a State if any person that owns more than 10 percent of the AMC--
    (1) Is determined by the State appraiser certifying and licensing 
agency not to have good moral character; or
    (2) Fails to submit to a background investigation carried out by 
the State appraiser certifying and licensing agency.


Sec.  1222.26  Information to be presented to the Appraisal 
Subcommittee by participating States.

    Each State electing to register AMCs for purposes of permitting 
AMCs to provide appraisal management services relating to covered 
transactions in the State must submit to the Appraisal Subcommittee the 
information required to be submitted by Appraisal Subcommittee 
regulations or guidance concerning AMCs that operate in the State.

    Dated: March 20, 2014.
Thomas J. Curry,
Comptroller of the Currency.
    Dated: March 19, 2014.
Robert deV. Frierson,
Secretary of the Board.
    Dated at Washington, DC, this 19th day of March, 2014.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
    Dated: March 11, 2014.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
    Dated: March 1, 2014.
Melvin L. Watt,
Director, Federal Housing Finance Agency.
    In consultation with:

    By the National Credit Union
    Administration Board on March 20, 2014.
Gerard Poliquin,
Secretary of the Board.
[FR Doc. 2014-06860 Filed 4-8-14; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P; 7535-01-P; 4810-AM-P; 
8070-01-P