The April 9 Federal Register contains the announcement for which the appraisal management industry has been waiting for months: the federal banking and finance regulatory agencies’ proposal of minimum standards for appraisal management companies (“AMCs”). Section 1473 of the Dodd-Frank Act requires the agencies – the OCC, FRB, FDIC, NCUA, CFPB, and FHFA (the “Agencies”) -to adopt standards for states to apply in their registration and supervision of AMCs.
It is old news that the Dodd-Frank Act sets standards for pricing appraisals and subjects appraisal management companies, known as AMCs, to federal and state oversight. The news for 2012 is that lenders may need to contend with alternate state law requirements addressing the payment of fee appraisers, some of which may be inconsistent with federal law.
AMCs – the business entities that administer networks of independent appraisers to procure real estate appraisal assignments on behalf of lenders – are now subject to supervision by state governments through their appraisal boards. Under the Dodd-Frank Act, the federal banking agencies must jointly by rule establish minimum requirements to be applied by a state, including state registration and supervision of AMCs, and that appraisals be conducted in compliance with Section 129E of TILA. While states have three years from the date the federal agencies finalize their rules establishing minimum requirements, AMC registration laws now exist in 28 states.