Appraisal Subcommittee; Notice of Proposed Rulemaking To Implement Collection and Transmission of Annual AMC Registry Fees, 31868-31873 [2016-11914]

Agencies

• Federal Financial Institutions Examination Council

[Federal Register Volume 81, Number 98 (Friday, May 20, 2016)]
[Proposed Rules]
[Pages 31868-31873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-11914]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 81, No. 98 / Friday, May 20, 2016 / Proposed 
Rules

[[Page 31868]]



FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL

12 CFR Part 1102

[Docket No. AS16-06]


Appraisal Subcommittee; Notice of Proposed Rulemaking To 
Implement Collection and Transmission of Annual AMC Registry Fees

AGENCY: Appraisal Subcommittee of the Federal Financial Institutions 
Examination Council.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Appraisal Subcommittee of the Federal Financial 
Institutions Examination Council (ASC) is proposing a rule pursuant to 
authority granted in the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act) to implement collection and 
transmission of appraisal management company (AMC) annual registry fees 
by State appraiser certifying and licensing agencies that elect to 
register and supervise AMCs. The ASC requests comment on all aspects of 
this Notice.

DATES: Comments must be received on or before July 19, 2016.

ADDRESSES: Commenters are encouraged to submit comments by the Federal 
eRulemaking Portal or email, if possible. You may submit comments, 
identified by Docket Number AS16-06, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting 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: webmaster@asc.gov. Include the docket number in the 
subject line of the message.
     Fax: (202) 289-4101. Include docket number on fax cover 
sheet.
     Mail: Address to Appraisal Subcommittee, Attn: Lori 
Schuster, Management and Program Analyst, 1401 H Street NW., Suite 760, 
Washington, DC 20005.
     Hand Delivery/Courier: 1401 H Street NW., Suite 760, 
Washington, DC 20005.
    In general, the ASC 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. At the close of the comment period, all public 
comments will also be made available on the ASC's Web site at https://www.asc.gov (follow link in ``What's New'') as submitted, unless 
modified for technical reasons.
    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 AS16-06'' in the Search box and 
click ``Search.'' 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 
comments at the ASC office, 1401 H Street NW., Suite 760, Washington, 
DC 20005. To make an appointment, please call Lori Schuster at (202) 
595-7578.

FOR FURTHER INFORMATION CONTACT: James R. Park, Executive Director, at 
(202) 595-7575, or Alice M. Ritter, General Counsel, at (202) 595-7577, 
Appraisal Subcommittee, 1401 H Street NW., Suite 760, Washington, DC 
20005.

SUPPLEMENTARY INFORMATION:

I. Background

    Title XI of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989, as amended (Title XI),\1\ established the 
ASC.\2\ Title XI's purpose is to ``provide that Federal financial and 
public policy interests in real estate related transactions will be 
protected by requiring that real estate appraisals utilized in 
connection with federally related transactions are performed in 
writing, in accordance with uniform standards, by individuals whose 
competency has been demonstrated and whose professional conduct will be 
subject to effective supervision.'' \3\
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    \1\ Public Law 101-73, 103 Stat. 183; 12 U.S.C. 3331-3355.
    \2\ The ASC Board is comprised of seven members. Five members 
are designated by the heads of the FFIEC agencies (Board of 
Governors of the Federal Reserve System (Board), Consumer Financial 
Protection Bureau (CFPB), Federal Deposit Insurance Corporation 
(FDIC), Office of the Comptroller of the Currency (OCC), and 
National Credit Union Administration (NCUA)). The other two members 
are designated by the heads of the Department of Housing and Urban 
Development (HUD) and the Federal Housing Finance Agency (FHFA).
    \3\ Title XI Sec.  1101, 12 U.S.C. 3331.
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    On July 21, 2010, the Dodd-Frank Act \4\ was signed into law. 
Section 1473 of the Dodd-Frank Act included amendments to Title XI. 
Section 1117 of Title XI, Establishment of State appraiser certifying 
and licensing agencies, was amended by the Dodd-Frank Act to: (1) 
Authorize States,\5\ if they so choose, to register and supervise AMCs; 
and (2) allow States to add information about AMCs in their State to 
the National Registry of AMCs (AMC Registry). States electing to 
register and supervise AMCs under Section 1117 must implement minimum 
requirements in accordance with the AMC Rule.\6\
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    \4\ Public Law 111-203, 124 Stat. 1376.
    \5\ As of January, 2016, the 50 States, the District of 
Columbia, and four Territories, which are the Commonwealth of Puerto 
Rico, Commonwealth of the Northern Mariana Islands, Guam, and United 
States Virgin Islands, had State appraiser certifying and licensing 
agencies.
    \6\ The Dodd-Frank Act added section 1124 to Title XI, Appraisal 
Management Company Minimum Requirements, which required the OCC, 
Board, FDIC, NCUA, CFPB, and FHFA to establish, by rule, minimum 
requirements for the registration and supervision of AMCs by States 
that elect to register and supervise AMCs pursuant to Title XI and 
the rules promulgated thereunder. The Agencies issued a final rule 
(AMC Rule) with an effective date of August 10, 2015. (80 Federal 
Register 32658, June 9, 2015).
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    Title XI as amended by the Dodd-Frank Act imposes a statutory 
restriction that applies 36 months from the effective date of the AMC 
Rule (Implementation Period).\7\ In summary, beginning 36 months from 
the effective

[[Page 31869]]

date of the AMC Rule, an AMC, as defined by Title XI, may not provide 
services for a Federally related transaction in a State unless the AMC 
is registered with a State that has established a registration and 
supervision program under Section 1117, or is subject to oversight by a 
Federal financial institutions regulatory agency.
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    \7\ 12 U.S.C. 3353(f)(1).
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    Section 1103 of Title XI, Functions of Appraisal Subcommittee, was 
amended by the Dodd-Frank Act to require the ASC to maintain the AMC 
Registry of AMCs that are either: (1) Registered with and subject to 
supervision by a State that has elected to register and supervise AMCs; 
or (2) supervised by a Federal financial institutions regulator 
(Federally regulated AMCs). It is anticipated that on or before the 
effective date of this rule, the ASC will issue an ASC Bulletin to 
States that will address:
    1. When the AMC Registry will be open for States; and
    2. Reporting requirements (information required to be submitted by 
States in order to register AMCs on the AMC Registry).

Only those companies that meet the Federal definition of AMC will be 
eligible to be on the AMC Registry.\8\
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    \8\ Title XI as amended by the Dodd-Frank Act defines 
``appraisal management company'' to mean, in part, an external third 
party that oversees a network or panel of more than 15 appraisers 
(State certified or licensed) in a State, or 25 or more appraisers 
nationally (two or more States) within a given year. (12 U.S.C. 
3350(11)). Title XI as amended by the Dodd-Frank Act also allows 
States to adopt requirements in addition to those in the AMC Rule. 
(12 U.S.C. 3353(b)). For example, States may decide to supervise 
entities that provide appraisal management services, but do not meet 
the size thresholds of the Title XI definition of AMC. If a State 
has a more expansive regulatory framework that covers entities that 
provide appraisal management services but do not meet the Title XI 
definition of AMC, the State should only submit information 
regarding AMCs meeting the Title XI definition to the AMC Registry.

    Section 1109 of Title XI, Roster of State certified or licensed 
appraisers; authority to collect and transmit fees, was amended by the 
Dodd-Frank Act to require States that elect to register and supervise 
AMCs to collect: (1) From AMCs that have been in existence for more 
than a year an annual registry fee of $25 multiplied by the number of 
appraisers working for or contracting with such AMC in such State 
during the previous year; and (2) from AMCs that have not been in 
existence for more than a year, $25 multiplied by an appropriate number 
to be determined by the ASC.\9\ The $25 may be adjusted, up to a 
maximum of $50, at the discretion of the ASC, if necessary to carry out 
the ASC's Title XI functions.\10\
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    \9\ 12 U.S.C. 3338(a)(4)(B).
    \10\ Id.
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    This proposed rule would set the annual AMC registry fee that 
States would collect and transmit to the ASC if they elect to register 
and supervise AMCs. This proposed rule sets forth the ASC's 
interpretation of the phrase ``working for or contracting with'' as 
used in the calculation of annual AMC registry fees.
    The ASC recognizes that the time required for notice and comment 
rulemaking for AMC registry fees could impede States' ability to 
implement the fees within the Implementation Period. However, the 
restriction on performance of services for Federally related 
transactions applies to AMCs that are not registered with the State or 
subject to oversight by a Federal financial institutions regulatory 
agency. Therefore, it is the ASC's understanding that the failure of a 
State to collect the fees under this rule within the Implementation 
Period would not subject otherwise properly registered and supervised 
AMCs in that State to the ban on providing services for Federally 
related transactions in that State.

II. The Proposed Rule

    The ASC is issuing this proposal to implement Section 1109 of Title 
XI for collection and transmission of AMC registry fees by those States 
electing to register and supervise AMCs.\11\ The proposed rule would 
establish the annual AMC registry fee and interpret the phrase 
``working for or contracting with'' in accordance with section 1109 as 
amended by the Dodd-Frank Act. As with appraisers, an AMC operating in 
more than one State that elects to register and supervise AMCs would be 
required to pay a registry fee in each State in order to be on the AMC 
Registry for each of those States.
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    \11\ Id.
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Definitions

    AMC Registry. Proposed Sec.  1102.401(a) proposes to define AMC 
Registry as the national registry maintained by the ASC of those AMCs 
that meet the Federal definition of AMC, as defined in 12 U.S.C. 
3350(11), are registered by a State or are Federally regulated, and 
have paid the annual AMC registry fee.
    AMC Rule. Proposed Sec.  1102.401(b) proposes to define AMC Rule as 
the interagency final rule on minimum requirements for AMCs, 12 CFR 
34.210-34.216; 12 CFR 225.190-225.196; 12 CFR 323.8-323.14; CFR 
1222.20-1222.26 (2015).
    ASC. Proposed Sec.  1102.401(c) proposes to define ASC as the 
Appraisal Subcommittee of the Federal Financial Institutions 
Examination Council established under section 1102 (12 U.S.C. 3310) as 
it amended the Federal Financial Institutions Examination Council Act 
of 1978 (12 U.S.C. 3301 et seq.) by adding section 1011.
    Performance of an appraisal. Proposed Sec.  1102.401(d) proposes to 
define performance of an appraisal to mean the appraisal service 
requested of an appraiser by the AMC was provided to the AMC.
    State. Proposed Sec.  1102.401(e) proposes to define State as any 
State, the District of Columbia, the Commonwealth of Puerto Rico, the 
Commonwealth of the Northern Mariana Islands, Guam, the United States 
Virgin Islands, and American Samoa.
    Terms incorporated by reference. Proposed Sec.  1102.401(f) states 
that the definitions of: Appraisal management company (AMC); appraisal 
management services; appraiser panel; consumer credit; covered 
transaction; dwelling; Federally regulated AMC are incorporated from 
the AMC Rule by reference because the proposed rule is closely related 
to the AMC Rule.

Establishing the Annual AMC Registry Fee

    Proposed Sec.  1102.402 would establish the annual AMC registry fee 
for States that elect to register and supervise AMCs as follows: (1) In 
the case of an AMC that has been in existence for more than a year, $25 
multiplied by the number of appraisers who have performed an appraisal 
for the AMC on a covered transaction in such State during the previous 
year; and (2) in the case of an AMC that has not been in existence for 
more than a year, $25 multiplied by the number of appraisers who have 
performed an appraisal for the AMC on a covered transaction in such 
State since the AMC commenced doing business. Performance of an 
appraisal means the appraisal service requested of an appraiser by the 
AMC was provided to the AMC.
    For AMCs that have been in existence for more than a year, Section 
1109 of Title XI provides that the annual AMC registry fee is based on 
the number of appraisers ``working for or contracting with'' an AMC in 
a State during a 12-month period multiplied by $25, up to a maximum of 
$50.\12\ The proposed rule adopts the minimum fee of $25 as set by 
statute and interprets the phrase ``working for or contracting with'' 
to mean those appraisers on an AMC

[[Page 31870]]

appraiser panel that performed an appraisal for the AMC on a covered 
transaction \13\ during the previous year in a particular State. The 
annual AMC registry fee for AMCs that have not been in existence for 
more than a year requires a determination by the ASC of an appropriate 
multiplier. The ASC proposes to use the same factors of $25 multiplied 
by the number of appraisers that performed an appraisal for the AMC on 
a covered transaction, but the fee would be based on the actual period 
of time since the AMC commenced doing business rather than 12 months.
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    \12\ Title XI Sec.  1109(a)(4)(B), 12 U.S.C. 3338(a)(4)(B).
    \13\ Consistent with the AMC Rule, the proposed determination of 
performing an appraisal is proposed to be based on ``covered 
transactions'' rather than ``Federally related transactions.''
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    The ASC considered three options with respect to interpreting the 
phrase ``working for or contracting with.'' Under the first option, the 
phrase ``working for or contracting with'' would have been interpreted 
to include every appraiser on an AMC appraiser panel during the 
reporting period \14\ in a particular State. The multiplier in this 
option would have included all appraisers on an AMC's appraiser panel 
in a particular State, including appraisers accepted by the AMC for 
consideration for future appraisal assignments.
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    \14\ In the case of AMCs that have been in existence for more 
than a year, the reporting period would be 12 months. In the case of 
an AMC that has not been in existence for more than a year, the 
reporting period would be since the AMC commenced doing business.
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    Under the second option, the phrase ``working for or contracting 
with'' would have been interpreted to include those appraisers engaged 
by the AMC to perform an appraisal on a covered transaction during the 
reporting period in a particular State. The time the appraiser would be 
considered in the calculation is at the point of engagement to perform 
a particular appraisal, regardless of whether the appraisal was fully 
performed during the reporting period. The ASC seeks comment in 
Question 3 below on whether this interpretation would be preferable for 
States to administer over the third option, which is set forth in the 
proposed rule.
    Under the third option, which is set forth in the proposed rule, 
the phrase ``working for or contracting with'' would include appraisers 
that performed an appraisal for the AMC on a covered transaction during 
the reporting period in a particular State. This option would exclude 
appraisers accepted by the AMC for consideration for future appraisal 
assignments as well as appraisers who performed appraisals in the past, 
but did not perform any appraisals in the reporting period. The AMC 
registry fee is not intended to result in duplicate fees for the same 
appraisal, even if there are multiple drafts of an appraisal. 
Therefore, the AMC registry fee is to be calculated based on an 
appraisal one time only.
    The ASC believes the third option imposes the minimum fee allowed 
under the statutory provisions of section 1109 and therefore imposes 
the least burden on AMCs. Based on the ASC's anticipated costs of 
overseeing States that elect to register and supervise AMCs, as well as 
the ASC's anticipated costs of maintaining the AMC Registry, the ASC 
believes the proposed annual AMC registry fee would adequately cover 
those costs while supporting other Title XI functions of the ASC as 
mandated by Congress, including further development of its grant 
programs, particularly for States.

Collection and Transmission of Annual AMC Registry Fees

    Proposed Sec.  1102.403 would implement collection and transmission 
of annual AMC registry fees for States that elect to register and 
supervise AMCs following the statutory scheme set forth in section 1117 
and section 1109 as amended by the Dodd-Frank Act. The proposed rule 
would require AMC registry fees to be collected and transmitted to the 
ASC on an annual basis by States that elect to register and supervise 
AMCs. Only those AMCs whose registry fees have been transmitted to the 
ASC would be eligible to be on the AMC Registry for the 12-month period 
following the payment of the fee.
    Under the proposed rule, States would have the flexibility to align 
a one-year period with any 12-month period, which may or may not be 
based on the calendar year. Just as many States do not use a calendar 
year for their existing appraiser credentialing process, the ASC 
believes that allowing States to set the 12-month period provides 
appropriate flexibility and will help States comply with the collection 
and transmission of AMC fees and reduce regulatory burden for State 
governments. States may choose to do this as they currently do for 
their appraisers, meaning some States have a date certain every year. 
Other States use, for example, the appraiser's date of birth (States 
could use AMC registration date similarly). The registration cycle 
would be left to the individual States to determine, but note that the 
statutory requirement in section 1109(a)(4) requires States that elect 
to register and supervise AMCs to submit AMC registry fees to the ASC 
annually.
    According to the AMC Rule, Federally regulated AMCs must report to 
the State or States in which they operate that have elected to register 
and supervise AMCs the information required to be submitted by the 
State pursuant to the ASC's policies, including: (i) Information 
regarding the determination of the AMC registry fee; and (ii) 
information required by the AMC Rule.\15\
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    \15\ According to the AMC Rule, States are not required to 
identify Federally regulated AMCs operating in their States; nor are 
they responsible for supervising or enforcing a Federally regulated 
AMC's compliance with information submission requirements. A State 
is also not required to assess whether any licensing issues exist in 
that State concerning an owner of a Federally regulated AMC that may 
disqualify the AMC from being on the National Registry of AMCs. 
Rather, Federally regulated AMCs are subject to oversight by the 
Federal financial institutions regulators that supervise the 
financial institutions that own and control AMCs. The AMC Rule does 
not bar a State from collecting a fee from Federally regulated AMCs 
to offset the cost of collecting the AMC registry fee and the 
information related to the fee.
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III. Request for Comment

    The ASC requests comment on all aspects of this proposed rule, 
including specific requests for comment that appear throughout the 
Supplementary Information above. In addition, the ASC requests comments 
on the following questions:
    Question 1. The ASC requests comment on all aspects of the proposed 
annual AMC registry fee.
    Question 2. The ASC requests comment on the ASC's interpretation of 
the phrase ``working for or contracting with.''
    Question 3. The ASC requests comment on the second option's 
interpretation of the phrase ``working for or contracting with.'' While 
the proposal defines ``working for or contracting with'' to include 
only those appraisers that performed an appraisal for the AMC during 
the reporting period, the second option would define ``working for or 
contracting with'' to mean ``the AMC engaged an appraiser to perform an 
appraisal, regardless of whether the appraiser completed the appraisal 
during the reporting period.'' The ASC is requesting comment on whether 
this would be an easier interpretation for the States to administer.
    Question 4. The ASC requests comment on all aspects of proposed 
collection and transmission of annual AMC registry fees.
    Question 5. The ASC requests comment on Federally regulated AMCs 
operating in a State that does not elect

[[Page 31871]]

to register and supervise AMCs. Should the ASC collect information and 
fees directly from Federally regulated AMCs that wish to appear on the 
AMC Registry but operate in States that do not elect to register and 
supervise AMCs?
    Question 6. What barriers, if any, exist that would make it 
difficult for a State to implement the collection and transmission of 
AMC registry fees?
    Question 7. What costs (both direct in terms of fees and indirect 
in terms of administrative costs) would be associated with collection 
and transmission of AMC registry fees?
    Question 8. What aspects of the proposed rule, if any, would be 
challenging for States to implement? To the extent such challenges 
would exist, what alternative approaches do commenters suggest that 
would make implementation easier, while maintaining consistency with 
the statute?

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 ASC may 
not conduct or sponsor, and, notwithstanding any other provision of 
law, 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 at the proposed rule stage by the ASC pursuant 
to section 3506 of the PRA and section 1320.11 of the OMB's 
implementing regulations (5 CFR part 1320). The collection of 
information requirements in the proposed rule are found in Sec. Sec.  
1102.400-1102.403. This information is required to implement section 
1473 of the Dodd-Frank Act.
    Title of Information Collection: Collection and Transmission of 
Annual AMC Registry Fees.
    OMB Control Nos.: The ASC 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 that elect to register and supervise AMCs would be required 
to collect and transmit annual AMC registry fees to the ASC. Section 
1102.402 would establish the annual AMC registry fee for States that 
elect to register and supervise AMCs as follows: (1) In the case of an 
AMC that has been in existence for more than a year, $25 multiplied by 
the number of appraisers who have performed an appraisal for the AMC on 
a covered transaction in such State during the previous year; and (2) 
in the case of an AMC that has not been in existence for more than a 
year, $25 multiplied by the number of appraisers who have performed an 
appraisal for the AMC on a covered transaction in such State since the 
AMC commenced doing business. Performance of an appraisal means the 
appraisal service requested of an appraiser by the AMC was provided to 
the AMC.
    Section 1102.403 would require AMC registry fees to be collected 
and transmitted to the ASC on an annual basis by States that elect to 
register and supervise AMCs. Only those AMCs whose registry fees have 
been transmitted to the ASC would be eligible to be on the AMC Registry 
for the 12-month period following the payment of the fee. Section 
1102.403 clarifies that States may align a one-year period with any 12-
month period, which may, or may not, be based on the calendar year. The 
registration cycle is left to the individual States to determine.
State Reporting Burden
    Section 1103 of Title XI, Functions of Appraisal Subcommittee, was 
amended by the Dodd-Frank Act to require the ASC to maintain a registry 
of AMCs that are either: (1) Registered with and subject to supervision 
by a State; or (2) Federally regulated AMCs. It is anticipated that on 
or before the effective date of this rule, the ASC will issue an ASC 
Bulletin to States that will address:
    1. When the AMC Registry will be open for States; and
    2. Reporting requirements (information required to be submitted by 
States in order to register AMCs on the AMC Registry).
    Burden Estimates:
    Total Number of Respondents: 500 AMCs, 55 States.
    Burden Total: 500 hours.

The ASC has a continuing interest in public opinion regarding the ASC's 
collection of information. Comments regarding the questions set forth 
below may be sent to the OMB desk officer for the ASC 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 ASC at the address 
listed in the ADDRESSES section of this SUPPLEMENTARY INFORMATION.
    (a) Whether the collection of information is necessary for the 
proper performance of the functions of the agency, including whether 
the information shall have practical utility;
    (b) The accuracy of the agency's estimate of the burden of the 
collection of information;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected; and
    (d) Ways to minimize the burden of the collection on respondents, 
including through the use of automated collection techniques or other 
forms of information technology.

Regulatory Flexibility Act

    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 a 
regulatory flexibility analysis that describes the impact of the 
proposed rule on small entities. However, the regulatory flexibility 
analysis otherwise required under the RFA is not required if an agency 
certifies that the proposed rule will not have a significant economic 
impact on a substantial number of small entities and publishes its 
certification and a brief explanatory statement in the Federal Register 
together with the proposed rule. Based on its analysis, and for the 
reasons stated below, the ASC believes that the proposed rule will not 
have a significant economic impact on a substantial number of small 
entities.
    Section 1109 of Title XI provides that State appraiser certifying 
and licensing agencies that elect to register and supervise AMCs shall 
collect (1) from AMCs that have been in existence for more than a year, 
annual AMC registry fees in the amount of $25 (up to a maximum of $50) 
multiplied by the number of appraisers ``working for or contracting 
with'' an AMC in a State during the previous year; and (2) from AMCs 
that have not been in existence for more than a year, annual AMC 
registry fees in the amount of $25 (up to a maximum of $50) multiplied 
by an appropriate number to be determined by the ASC.\16\ The purpose 
of the statutory fee is to support the ASC's functions under Title XI. 
Because the ASC believes the minimum fee required by the statute would 
be adequate to support its functions, the proposed rule

[[Page 31872]]

would adopt the minimum fee of $25 as set by statute. The proposed rule 
would also interpret the phrase ``working for or contracting with'' to 
mean those appraisers that performed an appraisal for the AMC on a 
covered transaction during the reporting period. For AMCs that have 
existed for more than a year, the formula would be $25 multiplied by 
the number of appraisers who have performed an appraisal for the AMC on 
a covered transaction during the previous year. For AMCs that have not 
existed for more than a year, the $25 fee would be multiplied by the 
number of appraisers that performed an appraisal for the AMC on a 
covered transaction, since the AMC commenced doing business.
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    \16\ 12 U.S.C. 3338(a)(4)(B).
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    Regarding the proposed fee for AMCs that have been in existence for 
more than a year, the ASC believes the proposed rule would impose the 
minimum fee allowed under the statutory provisions of section 1109. The 
ASC proposal would not exercise statutory discretion granted to the ASC 
to increase the fee above $25. Further, the ASC would interpret 
``working for or contracting with'' to mean only those appraisers who 
actually performed an appraisal for the AMC, as opposed to all 
appraisers on the AMC's panel or all appraisers engaged, regardless of 
whether the assignment was performed. The ASC believes this formula 
would result in the lowest fee allowed by the statute and the ASC would 
be choosing not to exercise its authority to increase this minimum fee. 
Therefore, any burden produced is the result of statutory and not 
regulatory requirements.
    The ASC has also decided to propose the statutory minimum fee of 
$25 for AMCs that have not existed for a year. As required by statute, 
the ASC is proposing an appropriate number against which to multiply 
the $25 fee. The ASC is proposing to use the same multiple as used for 
AMCs that have existed for more than a year (i.e., the number of 
appraisers that have performed appraisal assignments for the AMC). It 
is possible that the ASC may have been able to propose a multiple that 
would result in a lower fee and would still be deemed appropriate. In 
this regard, the rule may create burden for AMCs that have not existed 
for more than a year, beyond the burden created by the statutory 
requirements alone.
    While some burden beyond the statutory requirements may result from 
the rule for AMCs that have not existed for more than a year, the ASC 
does not believe the rule will have a significant economic impact on a 
substantial number of small entities. There are only approximately 500 
AMCs operating in the United States. The annual regulatory burden will 
only apply to new AMCs that have not existed for more than a year. 
Given the small number of AMCs currently in operation, it is unlikely 
that there will be a substantial number of AMCs that commence doing 
business in any given year. Further, the ASC is proposing the lowest 
possible fee of $25. Therefore, the ASC does not believe that the 
exercise of its discretion in setting the fee formula for such AMCs 
will have a significant economic impact on a substantial number of 
small entities.
    The collection and transmission to the ASC of AMC registry fees by 
the States would create some recordkeeping, reporting and compliance 
requirements. However, these collection and transmission requirements 
are imposed by the statute, not the proposed rule. Further, the RFA 
requires an agency to perform a regulatory flexibility analysis of 
small entity impacts when the agency's rule directly regulates the 
small entities.\17\
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    \17\ 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 SBA 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). Given these definitions, States that elect to 
establish licensing and certification authorities are not small 
entities and the burden on them is not relevant to this analysis.
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    Based on its analysis, and for the reasons stated above, the ASC 
believes that the proposed rule will not have a significant economic 
impact on a substantial number of small entities. Therefore, the ASC 
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. The ASC 
requests comment on all aspects of this analysis.

Unfunded Mandates Reform Act of 1995 Determination

    The ASC 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 ASC 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 ASC finds that the proposed rule 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 and supervision system. Second, the costs specifically 
related to requirements set forth in statute are excluded from 
expenditures under the UMRA. Given that the proposed rule reflects 
requirements that arise from section 1473 of the Dodd-Frank Act, the 
UMRA cost estimate for the proposed rule is zero. For this reason, and 
for the other reasons cited above, the ASC 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 proposed rule is not subject to section 
202 of the UMRA.

List of Subjects in 12 CFR Part 1102

    Administrative practice and procedure, Appraisers, Banks, Banking, 
Freedom of information, Mortgages, Reporting and recordkeeping 
requirements.

Authority and Issuance

    For the reasons set forth in the preamble, the ASC proposes to 
amend 12 CFR part 1102 as follows:

PART 1102--APPRAISER REGULATION

0
1. The authority citation for part 1102 is revised to read as follows:

    Authority:  12 U.S.C. 3348(a), 3332, 3335, 3338 (a)(4)(B), 
3348(c), 5 U.S.C. 552a, 553(e); Executive Order 12600, 52 FR 23781 
(3 CFR, 1987 Comp., p. 235).

0
2. Subpart E to part 1102 is added to read as follows:

Subpart E--Collection and Transmission of Appraisal Management 
Company (AMC)

Registry Fees

Sec.
1102.400 Authority, purpose, and scope.
1102.401 Definitions.
1102.402 Establishing the Annual AMC Registry Fee.
1102.403 Collection and Transmission of Annual AMC Registry Fees.


Sec.  1102.400  Authority, purpose, and scope.

    (a) Authority. This subpart is issued by the Appraisal Subcommittee 
(ASC) under sections 1106 and 1109 (a)(4)(B) of Title XI of the 
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 
(Title XI), as amended by the

[[Page 31873]]

Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank 
Act) (Pub. L. 111-203, 124 Stat. 1376 (2010)), 12 U.S.C. 3335, 3338 
(a)(4)(B)).
    (b) Purpose. The purpose of this subpart is to implement section 
1109 (a)(4)(B) of Title XI, 12 U.S.C. 3338.
    (c) Scope. This subpart applies to States that elect to register 
and supervise appraisal management companies pursuant to 12 U.S.C. 3353 
and the regulations promulgated thereunder.


Sec.  1102.401  Definitions.

    For purposes of this subpart:
    (a) AMC Registry means the national registry maintained by the ASC 
of those AMCs that meet the Federal definition of AMC, as defined in 12 
U.S.C. 3350(11), are registered by a State or are Federally regulated, 
and have paid the annual AMC registry fee.
    (b) AMC Rule means the interagency final rule on minimum 
requirements for AMCs, 12 CFR 34.210-34.216; 12 CFR 225.190-225.196; 12 
CFR 323.8 -323.14; 12 CFR 1222.20-1222.26 (2015).
    (c) ASC means the Appraisal Subcommittee of the Federal Financial 
Institutions Examination Council established under section 1102 (12 
U.S.C. 3310) as it amended the Federal Financial Institutions 
Examination Council Act of 1978 (12 U.S.C. 3301 et seq.) by adding 
section 1011.
    (d) Performance of an appraisal means the appraisal service 
requested of an appraiser by the AMC was provided to the AMC.
    (e) State means any State, the District of Columbia, the 
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, Guam, the United States Virgin Islands, and American Samoa.
    (f) Terms incorporated by reference. Definitions of: Appraisal 
management company (AMC); appraisal management services; appraisal 
panel; consumer credit; covered transaction; dwelling; Federally 
regulated AMC are incorporated from the AMC Rule by reference.


Sec.  1102.402  Annual AMC registry fee.

    The annual AMC registry fee to be applied by States that elect to 
register and supervise AMCs is established as follows:
    (a) In the case of an AMC that has been in existence for more than 
a year, $25 multiplied by the number of appraisers who have performed 
an appraisal for the AMC in connection with a covered transaction in 
such State during the previous year; and
    (b) In the case of an AMC that has not been in existence for more 
than a year, $25 multiplied by the number of appraisers who have 
performed an appraisal for the AMC in connection with a covered 
transaction in such State since the AMC commenced doing business.


Sec.  1102.403  Collection and transmission of annual AMC registry 
fees.

    (a) Collection of annual AMC registry fees. States that elect to 
register and supervise AMCs pursuant to the AMC Rule shall collect an 
annual registry fee as established in Sec.  1102.402 (a) from AMCs 
eligible to be on the AMC Registry.
    (b) Transmission of annual AMC registry fee. States that elect to 
register and supervise AMCs pursuant to the AMC Rule shall transmit AMC 
registry fees as established in Sec.  1102.402 (a) to the ASC on an 
annual basis. Only those AMCs whose registry fees have been transmitted 
to the ASC will be eligible to be on the AMC Registry for the 12-month 
period subsequent to payment of the fee.

    By the Appraisal Subcommittee.

    Dated: May 16, 2016.
James R. Park,
Executive Director.
[FR Doc. 2016-11914 Filed 5-19-16; 8:45 am]
 BILLING CODE P