Agency Information Collection Activities: Submission for OMB Review; Comment Request (OMB No. 3064-0195), 40289-40292 [2018-17377]

Agencies

• FEDERAL DEPOSIT INSURANCE CORPORATION

[Federal Register Volume 83, Number 157 (Tuesday, August 14, 2018)]
[Notices]
[Pages 40289-40292]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-17377]


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FEDERAL DEPOSIT INSURANCE CORPORATION


Agency Information Collection Activities: Submission for OMB 
Review; Comment Request (OMB No. 3064-0195)

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Notice and request for comment.

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SUMMARY: The FDIC, as part of its continuing effort to reduce paperwork 
and respondent burden, invites the general public and other Federal 
agencies to take this opportunity to comment on the renewal of an 
existing information collection, as required by the Paperwork Reduction 
Act of 1995. The FDIC published a notice of its intent to renew the 
information collection described below in the Federal Register and 
requested comment for 60 days. FDIC received one comment which is fully 
discussed in the Supplementary Information section

[[Page 40290]]

below. No other comments were received. The FDIC hereby gives notice of 
its plan to submit to OMB a request to approve the renewal of this 
information collection, and again invites comment on the renewal.

DATES: Comments must be submitted on or before September 13, 2018.

ADDRESSES: Interested parties are invited to submit written comments to 
the FDIC by any of the following methods:
     Agency website: https://www.FDIC.gov/regulations/laws/federal.
     Email: [email protected]. Include the name and number of 
the collection in the subject line of the message.
     Mail: Manny Cabeza, Counsel, Room MB-3007, Federal Deposit 
Insurance Corporation, 550 17th Street NW, Washington, DC 20429.
     Hand Delivery: Comments may be hand-delivered to the guard 
station at the rear of the 17th Street Building (located on F Street), 
on business days between 7:00 a.m. and 5:00 p.m.
    All comments should refer to the relevant OMB control number. A 
copy of the comments may also be submitted to the OMB desk officer for 
the FDIC: Office of Information and Regulatory Affairs, Office of 
Management and Budget, New Executive Office Building, Washington, DC 
20503.

FOR FURTHER INFORMATION CONTACT: Manny Cabeza, Counsel, 202-898-3767, 
[email protected], MB-3007, Federal Deposit Insurance Corporation, 550 
17th Street NW, Washington, DC 20429.

SUPPLEMENTARY INFORMATION: 
    Proposal to renew the following currently approved collection of 
information:
    1. Title: Minimum requirements for appraisal management companies.
    OMB Number: 3064-0195.
    Form Number: None.
    Affected Public: Participating States and Appraisal Management 
Companies that are subsidiaries owned and controlled by insured 
depository institutions.
    Burden Estimate:

                                                                                    Summary of Annual Burden
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                                                                        Estimated       Estimated    Estimated time                                Total annual    FDIC, FRB and
                                             Type of  burden            number of       number of     per response      Frequency of response        estimated       OCC share      FHFA share
                                                                       respondents      responses        (hours)                                   burden hours       (hours)         (hours)
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IC #1--AMC Written Notice of         Record Keeping................           9,881               1            0,08  On Occasion................             790             237             79.
 Appraiser Removal from Network or
 Panel (323.10).
IC #2--State Recordkeeping           Record Keeping................               5               1              40  On Occasion................             200              50             50.
 Requirements (323.11(a) & (b).
IC #3--AMC Reporting Requirements    Reporting.....................             200               2               1  On Occasion................             400             120             40.
 (State and Federal AMCs)(323.12 &
 13(c)).
IC #4--State Reporting Requirements  Reporting.....................              55               1               1  On Occasion................              55              14             14.
 to the Appraisal Sub Committee
 (323.14).
                                                                    ----------------------------------------------------------------------------------------------------------------------------
    Total Estimated Annual Burden..  ..............................  ..............  ..............  ..............  ...........................           1,445             421             183
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    General Description of Collection: The FDIC, the Office of the 
Comptroller of the Currency (OCC), The Board of Governors of the 
Federal Reserve System (FRB) and the Federal Home Finance Agency (FHFA) 
(collectively, the Agencies) issued regulations to implement the 
requirements of section 1473 of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act to be applied by States in the registration and 
supervision of appraisal management companies (AMCs). The regulations 
also implement the requirement in section 1473 of the Dodd-Frank Act 
for States to report to the Appraisal Subcommittee (ASC) 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). The FDIC's regulation is found at 12 CFR part 
323 (the Regulation) and contains the following PRA recordkeeping and 
reporting requirements:
    AMC Recordkeeping Requirements (IC #1). Section 323.10 of the 
Regulation 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.
    State Recordkeeping Requirements (IC #2). States seeking to 
register AMCs must have an AMC registration and supervision program. 
Section 323.11(a) of the Regulation requires each participating State 
to establish and maintain within its appraiser certifying and licensing 
agency a registration and supervision 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 panel members' certifications or 
licenses; (v) investigate and assess potential violations of laws, 
regulations, or orders; (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 
ASC.
    Section 323.11(b) requires each participating State to impose 
requirements on AMCs not regulated by a Federal financial institutions 
regulatory agency nor owned and

[[Page 40291]]

controlled by an insured depository institution 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 the Uniform Standards of Professional Appraisal 
Practice; 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.
    AMC Reporting Requirements (IC #3). Section 323.13(c) requires that 
a Federally-regulated AMC report to the State or States in which it 
operates the information required to be submitted by the State pursuant 
to the ASC's policies, including: (i) Information regarding the 
determination of the AMC National Registry fee; and (ii) the 
information listed in section 323.12 of the Regulation. Section 323.12 
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 AMC is required to submit to a background investigation 
carried out by the State appraiser certifying and licensing agency. 
While section 323.12 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.
    State Reporting Requirements (IC #4). Section 323.14 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 ASC the information concerning such 
AMCs required to be submitted under the Regulation and any additional 
information required by the ASC.
    Burden Estimate Methodology and Assumptions:
    There is no change in the methodology or substance of this 
information collection. For the information collections described 
above, the general methodology is to compute the industry wide burden 
hours for States and appraisal management companies (AMCs) and then 
assign a share of the burden hours to each of the regulatory agencies 
for each information collection. The Agencies are revising their burden 
estimates based on the following assumptions:
    IC #1: AMC Written Notice of Appraiser Removal from Network or 
Panel. The burden for written notices of appraiser removal from a 
network or panel is estimated to be equal to the number of appraisers 
who leave the profession per year multiplied by the estimated 
percentage of appraisers who work for AMCs, then multiplied by burden 
hours per notice. The number of appraisers who leave is calculated by 
adding the number of appraisers who are laid off or resign to the 
number of appraisers that have had their licenses revoked or 
surrendered. The total burden hours are then split between the Federal 
Reserve Board (FRB), the Office of the Comptroller of the Currency 
(OCC), the Federal Deposit Insurance Corporation (FDIC), and the 
Federal Housing Finance Agency (FHFA) in a ratio of 3:3:3:1 in 
accordance with the burden sharing agreement among the Agencies.
    Finally, the burden hours are calculated by multiplying the 
estimated number of written notices of appraiser removal (9,881) by the 
estimated burden per notice (0.08 hours) for a total of 790 burden 
hours.\1\ As previously mentioned, the total burden hours are then 
split between the FDIC, FRB, OCC, and the FHFA such that the FHFA is 
responsible for 79 hours and the other three agencies are responsible 
for 237 hours each.
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    \1\ The ``per notice'' burden estimate of 0.08 hours is 
unchanged from the estimate provided for the currently-approved ICR. 
The subject matter experts at the FDIC do not believe this estimate 
needs to be updated for this renewal.
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    IC #2: Develop and Maintain a State Licensing Program. The burden 
on the States for developing and maintaining an AMC licensing program 
is calculated by multiplying the number of states without a 
registration and licensing program by the hour burden to develop the 
system. The total burden hours are then equally divided among the FDIC, 
FRB, OCC, and FHFA. According to the Appraisal Institute as of July 26, 
2017, there are 5 states that have not developed a system to register 
and oversee AMCs.\2\ The 2015 ICR estimate of the hour burden per state 
without a registration system was 40 hours. The FDIC does not believe 
this estimate needs to be updated for this renewal. Therefore, the 
total hour burden is 200 hours: 5 states x 40 hours/state = 200 hours. 
Finally, the total hour burden is divided among the four agencies such 
that each agency is responsible for 50 burden hours.\3\
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    \2\ Appraisal Institute ``Enacted State AMC Laws,'' https://www.appraisalinstitute.org/advocacy/enacted-state-amc-laws1/.
    \3\ The assumption to divide the burden hours between the 
agencies is based on a burden-sharing agreement among the FDIC, FRB, 
OCC, and FHFA. The burden hours are shared in the same ratio as the 
2015 ICR.
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    IC #3: AMC Reporting Requirements (State and Federal AMCs). The 
burden for AMC reporting requirements is calculated by multiplying the 
number of AMCs by the frequency of response then by the burden per 
response. The burden hours are then divided between the FDIC, FRB, OCC, 
and FHFA at a ratio of 3:3:3:1.\4\ FDIC estimates there are 
approximately 400 entities that provide appraisal management services 
as defined by section 323.9(d). Of these 400 entities, FDIC estimates 
approximately 200 entities meet the definition of an AMC as defined by 
section 323.9(c).\5\
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    \4\ Id.
    \5\ The FDIC anticipates more definitive information will become 
available when AMC registration requirements become effective on 
August 10, 2018.
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    The frequency of response is estimated as the number of states that 
do not have an AMC registration program in which the average AMC 
operates.\6\ According to the Appraisal Institute, Five (5) states do 
not have AMC registration or oversight programs.\7\ According to the 
Consumer Financial Protection Bureau (CFPB), the average AMC operates 
in 19.56 states.\8\ Therefore, the average AMC operates in 
approximately 2 states that do not have AMC registration systems: (5 
states / 55 states) x 19.56 states = 1.778 states ~ 2 states. Therefore 
the total hour burden for IC #3 is 400 hours: 200 AMCs x 2 states 
(frequency) x 1 hour = 400 hours. The burden hours are then divided 
such that the FDIC, FRB, and OCC are each responsible for 120 burden 
hours and

[[Page 40292]]

the FHFA is responsible for 40 burden hours.\9\
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    \6\ The number of states includes all U.S. states, territories, 
and districts, to include the Commonwealth of the Northern Mariana 
Islands, the District of Columbia, Guam, Puerto Rico, and the U.S. 
Virgin Islands.
    \7\ Appraisal Institute ``Enacted State AMC Laws,'' https://www.appraisalinstitute.org/advocacy/enacted-state-amc-laws1/ 
(accessed February 27, 2018).
    \8\ The CFPB conducted a survey of 9 AMCs in 2013 regarding the 
provisions in the rule and the related PRA burden.
    \9\ See footnote 9.
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    IC #4: State Reporting Requirements to the Appraisal Subcommittee. 
The burden hours for State reporting to the ASC are estimated by 
multiplying the number of states by the hour burden per state.\10\ Then 
the burden hours are divided equally among the FDIC, FRB, OCC, and the 
FHFA. The total burden hour for state reporting is 50 hours: 55 states 
x 1 hour/state = 55 hours. This is then equally divided across the 4 
agencies for 14 burden hours each, with rounding.\11\
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    \10\ The number of states includes all U.S. states, territories, 
and districts, to include the Commonwealth of the Northern Mariana 
Islands, the District of Columbia, Guam, Puerto Rico, and the U.S. 
Virgin Islands. The burden estimate of one hour per report is 
unchanged from the estimate provided for the currently-approved ICR. 
The subject matter experts at the FDIC do not believe this estimate 
needs to be updated for this renewal.
    \11\ See footnote 9.
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    Comments Received:
    The FDIC received one comment letter from an appraisal management 
company trade association.
    In response to the request for comment on whether this collection 
of information is necessary for the proper performance of the functions 
of the FDIC, including whether the information has practical utility, 
the commenter agreed that this collection of information is necessary 
and has practical utility but ``only to the extent that the information 
collected serves the proper purpose to promote appraiser independence 
while ensuring a healthy real estate valuation market.'' This suggests 
that the commenter believes that the ``proper purpose'' of the 
collection is limited to the promotion to appraiser independence. In 
response to this comment, the FDIC notes that the purpose of the AMC 
rule and the collection is to implement all required elements of the 
statute, not only provisions that relate to appraiser independence.\12\ 
The Agencies were required to adopt regulations to implement all the 
statutory requirements and this collection of information is a 
necessary and useful component of such implementation.
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    \12\ See 12 U.S.C. 3353(a) (setting minimum requirements for 
registration regulation in participating states); id. section 
3353(d) (setting registration limitations for AMCs); and id. section 
3353(e) (requiring reporting of information by AMCs to the ASC).
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    In response to the request for comment on the accuracy of FDIC's 
estimate of the information collection burden, the commenter opines 
that the FDIC's estimate of the number of entities that meet the 
definition of an AMC under IC #3: (Reporting Requirements for State and 
Federal AMCs) is too low. The commenter did not offer an estimate of 
what the number should be and appears to agree that, as stated in 
footnote 5, the actual number of affected AMCs will be known once the 
AMC National Registry is fully operational.
    The commenter indicates that its members believe that the estimate 
of the annual burden to comply is also too low. The commenter 
recommends that the estimate be increased to twice the current 
estimate. The commenter notes that each state differs in complexity of 
their demands for the collection of information and not all are on the 
same renewal schedule. Some renew annually and some biennially, which 
have varying burdens for preparation and validation. The burden 
estimates for this collection have historically been prepared on an 
industry-wide basis and then allotted to each agency. The FDIC prepared 
the industry-wide estimates for this renewal. We invite commenters to 
review the analysis, which is included in our supporting statement, and 
comment during the 30-day comment period.
    In response to the request for comment on ways to enhance the 
quality, utility, and clarity of the information to be collected, the 
commenter suggested that the ASC should issue additional guidance to 
states and AMCs concerning the AMC minimum requirements. The goal of 
such guidance would be to ``provide consistency in the implementation 
of the regulations and information required.''
    The commenter also expressed concern that wide variation of AMC 
requirements from state to state may have material unintended 
consequences on lending activity in a particular jurisdiction. The 
commenter's suggestions do not relate to the information collection. In 
addition, while Title XI and the AMC rule set minimum standards for the 
registration and supervision of AMCs by states, Title XI and the AMC 
rule expressly provide that a state may adopt requirements in addition 
to those contained in the AMC regulation. 12 U.S.C. 3353(b); 12 CFR 
34.210(d). The FDIC will, however, refer these suggestions to the ASC 
for consideration.
    In response to the request for comments on ways to minimize the 
burden of the collection on respondents, including through the use of 
automated collection techniques or other forms of information 
technology, the commenter recommends that the ASC find opportunities to 
develop reporting efficiencies in the licensing system, which could 
include partnering with the Nationwide Multistate Licensing System 
(NMLS) or investing in a new process. Furthermore, the commenter 
believes the ASC should be more aggressive in supporting modernization 
of the outdated National Appraiser Registry (which AMCs must use to 
comply with the minimum requirements). FDIC notes that the commenter's 
suggestions do not relate to the information collection. The FDIC will, 
however, refer these suggestions to the ASC for consideration.
    Request for Comment: Comments are invited on: (a) Whether the 
collection of information is necessary for the proper performance of 
the FDIC's functions, including whether the information has practical 
utility; (b) the accuracy of the estimates of the burden 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; and (d) ways to minimize the burden 
of the collection of information on respondents, including through the 
use of automated collection techniques or other forms of information 
technology. All comments will become a matter of public record.

    Dated at Washington, DC, on August 8, 2018.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2018-17377 Filed 8-13-18; 8:45 am]
 BILLING CODE 6714-01-P