Minimum state requirements for appraisal management companies have been outlined in a rule that has been finalized by federal regulators.
The
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 amended Title XI of the Financial Institution Reform, Recovery, and Enforcement Act of 1989.
The amendments
prohibit the use of an AMC on federally related transactions in states with no AMC regulation in place.
Federal regulators — including the Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, Federal Deposit Insurance Corp., Federal Housing Finance Agency, National Credit Union Administration and Office of the Comptroller of the Currency — proposed a rule in March 2014 that fulfilled the amendments.
On Thursday, the regulators issued a notice that the rule has been finalized.
The final rule implements minimum requirements for state registration and supervision of AMCs.
Under the final rule, states can elect to register and supervise AMCs as outlined in the rule. Participating states must apply certain minimum requirements in the registration and supervision of AMCs.
“The final rule does not compel a state to establish an AMC registration and supervision program, and no penalty is imposed on a state that does not establish a regulatory structure for AMCs,” the regulators’ statement said. “However, in states that have not established a regulatory structure after 36 months from the effective date of this final rule, any non-federally regulated AMC is barred by section 1124 of Title XI from providing appraisal management services for federally related transactions.
“A state may adopt a regulatory structure for AMCs after this 36-month period, which would lift this restriction.”
AMCs that are subsidiaries of federally regulated financial institutions are subject to the same minimum requirements as state-regulated AMCs except for the requirement to register with a state.
The final rule becomes effective 60 days after publication
in the Federal Register.
While compliance with the rule is required within 12 months of the effective date for federally regulated AMCs, deadlines for state-regulated AMCs are up to the individual states.
