Collectively, the FDIC, the OCC, FRB, CFPB, NCUA and FHFA issued a proposed rule establishing the minimum requirements for mortgage appraisal management companies. An appraisal management company is generally an entity that serves as an intermediary between appraisers and lenders and provides appraisal management services. Section 1473 of the Dodd-Frank Act established minimum requirements to be applied by state regulators in the registration and supervision of appraisal management companies. Section 1473 also created the appraisal management company national registry. The proposed rule will require appraisal management companies to have systems in place to ensure that only state-certified or licensed appraisers perform appraisals, that the appraisers have the requisite education, expertise and experience, follow the appraisal independence requirements in the Truth in Lending Act and comply with Uniform Standards of Professional Appraisal Practice. The proposed rule will also require states to report to the Financial Institutions Examination Council any information required by the FFIEC to administer the newly created appraisal management company national registry. Of note, appraisal management companies that are owned and controlled by subsidiaries of an insured depository institution or an insured credit union and regulated by a federal banking regulator are not required to register with a state. However, these federally regulated appraisal management companies are subject to the same minimum requirements as those that are not regulated by a federal banking regulator.
Both the FDIC and the OCC also proposed to rescind the appraisal regulations issued by the former OTS. Comments on the proposed rule are due 60 days from publication in the federal register.