82_FR_44147 82 FR 43966 - Appraisal Subcommittee; Proposed Revised Policy Statements

82 FR 43966 - Appraisal Subcommittee; Proposed Revised Policy Statements

FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL

Federal Register Volume 82, Issue 181 (September 20, 2017)

Page Range43966-43983
FR Document2017-19998

The Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council requests public comment on a proposal to revise ASC Policy Statements (proposed Policy Statements). The proposed Policy Statements provide guidance to ensure State appraiser regulatory programs comply with Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended, and the rules promulgated thereunder. The proposed Policy Statements would supersede the current ASC Policy Statements. The ASC previously published the Proposed Revised Policy Statements on January 10, 2017, under Docket Number AS17-01. The comment period was scheduled to close on April 10, 2017. The ASC suspended the comment period in response to the White House Chief of Staff Memorandum titled Regulatory Freeze Pending Review, signed on January 20, 2017, pending review by the Office of Management and Budget (OMB). Technical edits for clarification have been made to the proposed Policy Statements since the initial publication, which are addressed below in Supplementary Information, section III, Statement-by-Statement.

Federal Register, Volume 82 Issue 181 (Wednesday, September 20, 2017)
[Federal Register Volume 82, Number 181 (Wednesday, September 20, 2017)]
[Notices]
[Pages 43966-43983]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-19998]


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FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL

[Docket No. AS17-06]


Appraisal Subcommittee; Proposed Revised Policy Statements

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

ACTION: Proposed Revised Policy Statements.

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SUMMARY: The Appraisal Subcommittee (ASC) of the Federal Financial 
Institutions Examination Council requests public comment on a proposal 
to revise ASC Policy Statements (proposed Policy Statements). The 
proposed Policy Statements provide guidance to ensure State appraiser 
regulatory programs comply with Title XI of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989, as amended, and the 
rules promulgated thereunder. The proposed Policy Statements would 
supersede the current ASC Policy Statements. The ASC previously 
published the Proposed Revised Policy Statements on January 10, 2017, 
under Docket Number AS17-01. The comment period was scheduled to close 
on April 10, 2017. The ASC suspended the comment period in response to 
the White House Chief of Staff Memorandum titled Regulatory Freeze 
Pending Review, signed on January 20, 2017, pending review by the 
Office of Management and Budget (OMB). Technical edits for 
clarification have been made to the proposed Policy Statements since 
the initial publication, which are addressed below in Supplementary 
Information, section III, Statement-by-Statement.

DATES: Comments must be received on or before November 20, 2017.

ADDRESSES: Commenters are encouraged to submit comments by the Federal 
eRulemaking Portal or email, if possible. You may submit comments, 
identified by Docket Number AS17-06, 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.
     E-Mail: [email protected]. 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 Federal eRulemaking 
(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 by any of the following methods:
     Viewing Comments Electronically: Go to https://www.Regulations.gov. Enter ``Docket ID AS17-06'' 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), established the ASC.\1\ 
The purpose of Title XI is to provide protection of Federal financial 
and public policy interests by upholding Title XI requirements for 
appraisals performed for federally related transactions.\2\ Pursuant to 
Title XI, one of the ASC's core functions is to monitor the 
requirements established by the States \3\ for certification and 
licensing of appraisers qualified to perform appraisals in connection 
with federally related transactions. This is accomplished through 
periodic ASC Compliance Reviews of each State appraiser regulatory 
program (Appraiser Program) to determine compliance or lack thereof 
with Title XI, and to assess implementation of minimum requirements for 
credentialing of appraisers as adopted by the Appraiser Qualifications 
Board (The Real Property Appraiser Qualification Criteria or AQB 
Criteria).
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    \1\ 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).
    \2\ Refers to any real estate related financial transaction 
which: (a) A federal financial institutions regulatory agency 
engages in, contracts for, or regulates; and (b) requires the 
services of an appraiser. (Title XI Sec.  1121(4), 12 U.S.C. 3350.)
    \3\ 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.
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    Title XI as amended by the Dodd-Frank Wall Street Reform and 
Consumer Protection Act of 2010 (Dodd-Frank Act) \4\ expanded the ASC's 
core functions to include monitoring of the requirements established by 
States that elect to register and supervise the operations and 
activities of appraisal management companies \5\ (AMCs). States 
electing to register and supervise AMCs must implement minimum 
requirements in accordance with the AMC Rule.\6\ As a result, States 
with an

[[Page 43967]]

AMC regulatory program (AMC Program) will be evaluated during the ASC's 
Compliance Review to determine compliance or lack thereof with Title 
XI, and to assess implementation of the minimum requirements for State 
registration and supervision of AMCs as established by the AMC Rule. 
The amendments to Title XI by the Dodd-Frank Act also allow States with 
an AMC Program to add information about AMCs in their State to the 
National Registry of AMCs (AMC Registry). The proposed Policy 
Statements include guidance to the States regarding how AMC Programs 
will be evaluated during ASC Compliance Reviews.
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    \4\ Public Law 111-203, 124 Stat. 1376.
    \5\ Title XI Sec.  1103(a)(1)(B), 12 U.S.C. 3332.
    \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. (Title XI Sec.  1124(a), 12 U.S.C. 
3353(a).) Those rules were finalized and published on June 9, 2015, 
at 80 Federal Register 32658 with an effective date of August 10, 
2015. (12 CFR 34.210-34.216; 12 CFR 225.190-225.196; 12 CFR 323.8-
323.14; 12 CFR 1222.20-1222.26)
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II. Overview of Proposed Policy Statements

    The ASC is issuing these proposed Policy Statements \7\ in three 
parts to provide States with the necessary information to maintain 
their Appraiser Programs and AMC Programs in compliance with Title XI 
and the rules promulgated thereunder:
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    \7\ These Policy Statements, adopted [date to be inserted when 
final], supersede all previous Policy Statements adopted by the ASC.
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    [rtarr8] Part A, Appraiser Program--Policy Statements 1 through 7 
correspond with the categories that are: (a) Evaluated during the 
Appraiser Program Compliance Review; and (b) included in the ASC's 
Compliance Review Report of the Appraiser Program.
    [rtarr8] Part B, AMC Program--Policy Statements 8 through 11 
correspond with the categories that are: (a) Evaluated during the AMC 
Program Compliance Review; and (b) included in the ASC's Compliance 
Review Report of the AMC Program.
    [rtarr8] Part C, Interim Sanctions--Policy Statement 12 sets forth 
required procedures in the event that interim sanctions are imposed 
against a State by the ASC for non-compliance in either the Appraiser 
Program or the AMC Program.
    The proposal also includes two appendices:
    1. Appendix A provides an overview of the Compliance Review 
process; and
    2. Appendix B provides a glossary of terms.

III. Statement-by-Statement

    The following provides a section by section highlight of changes 
presented in the proposed Policy Statements.

Introduction and Purpose

    The ASC proposes to expand the introduction to include the 
monitoring of States that elect to register and supervise the 
operations and activities of AMCs, and to include an explanation of the 
proposed Policy Statements' three parts and appendices.

Part A: Appraiser Program

Policy Statement 1: Statutes, Regulations, Policies and Procedures 
Governing State Appraiser Programs
    The ASC proposes to modify Policy Statement 1 to include a 
definition of trainee appraiser to better reflect how changes to Title 
XI affect Appraiser Programs with trainee requirements.
Policy Statement 2: Temporary Practice
    The ASC proposes to modify Policy Statement 2 to clarify 
requirements for temporary practice and includes requirements to track 
temporary practice permits and maintain documentation.
Policy Statement 3: National Registry of Appraisers
    The ASC proposes to modify Policy Statement 3 to clarify 
requirements regarding States' submission of registry fees and 
eligibility of appraisers for the Appraiser Registry.
    Technical edits for clarification were made to Policy Statement 3 
since the initial publication. The Summary of Requirements include the 
5-day reporting requirement for disciplinary action consistent with the 
body of the Policy Statement, and clarify the requirement for States to 
adopt and implement a policy to protect right of access to the 
Appraiser Registry.
Policy Statement 4: Application Process
    The ASC proposes to modify Policy Statement 4 to include additional 
guidance to States implementing AQB Criteria regarding the background 
of applicants for credentials and requires States to document applicant 
files with evidence supporting decisions made regarding individual 
appraisers. Policy Statement 4 as proposed also provides additional 
guidance on requirements for States to validate renewal requirements 
for appraisers and provides parameters for auditing education-related 
affidavits. Finally, Policy Statement 4 as proposed clarifies the 
requirement that States engage analysts who are knowledgeable about the 
Uniform Standards of Professional Appraisal Practice (USPAP) and 
document how the analysts are qualified.
    Technical edits for clarification were made to Policy Statement 4 
since the initial publication. The section titled Processing of 
Applications refers to ``documentation'' required rather than 
``files.'' In the section titled ``Validation Procedures, Objectives 
and Requirements,'' the subsection ``Selection of Work Product'' is 
renamed ``Experience Hours Validation'' to more accurately reflect the 
content of the subsection, and compliance with USPAP is moved to the 
following subsection titled ``USPAP Compliance''; the subsection 
``Determination of Experience Time Periods'' no longer restates AQB 
Criteria, but rather requires that time periods conform with AQB 
Criteria; and ``Supporting Documentation'' clarifies documentation 
required. The Summary of Requirements were modified to conform with 
these technical edits.
Policy Statement 5: Reciprocity
    The ASC proposes to modify Policy Statement 5 to include a 
requirement that States obtain and maintain sufficient relevant 
documentation pertaining to an application for issuance of a credential 
by reciprocity.
Policy Statement 6: Education
    The ASC proposes to modify Policy Statement 6 to clarify that 
States may not continue to accept AQB approved courses after the AQB's 
expiration date unless the course content is reviewed and approved by 
the State.
Policy Statement 7: State Agency Enforcement
    The ASC proposes to modify Policy Statement 7 to clarify the 
requirement that States consider USPAP violations when investigating a 
complaint whether or not USPAP violations were the basis for the 
complaint.
    Technical edits for clarification were made to Policy Statement 7 
since the initial publication. A footnote was added to clarify that the 
one-year period for resolution of complaints is not intended to have 
the impact of a statute of limitation.

Part B: AMC Program

    As proposed, Policy Statements 8, 9 & 10 duplicate the provisions 
of Policy Statements 1, 3 & 7 to every extent possible. The standard 
language is intentional and will create better understanding of the 
Policy Statements by the States as they will be able to anticipate how 
to comply based on their understanding of the Policy Statements they 
have been following. Differences are discussed below.
Policy Statement 8: Statutes, Regulations, Policies and Procedures 
Governing State AMC Programs
    The ASC proposes a new Policy Statement 8 to reflect the statutory 
provision that States are not required to establish an AMC Program, but 
clarify for those States that establish AMC

[[Page 43968]]

Programs the ASC oversight during ASC Compliance Reviews. As proposed, 
Policy Statement 8 reiterates that States with an AMC Program must: (1) 
Establish and maintain an AMC Program with the legal authority and 
mechanisms consistent with the AMC Rule; (2) impose requirements on 
AMCs consistent with the AMC Rule; and (3) enforce and document 
ownership limitations for State-registered AMCs. As proposed, Policy 
Statement 8 informs States that while they may have a more expansive 
definition of an AMC in their State statute, only AMCs that meet the 
federal definition in Title XI may be included on the AMC Registry.
Policy Statement 9: National Registry of AMCs (AMC Registry)
    The ASC proposes a new Policy Statement 9 to clarify requirements 
for States with an AMC Program to maintain the AMC Registry in the same 
way they maintain the Appraiser Registry.
    Technical edits for clarification were made to Policy Statement 9 
since the initial publication. The Summary of Requirements includes the 
requirement for States to adopt and implement a policy to protect right 
of access to the AMC Registry.
Policy Statement 10: State Agency Enforcement
    The ASC proposes a new Policy Statement 10 to clarify requirements 
for States' AMC enforcement programs in those States with an AMC 
Program.
Policy Statement 11: Statutory Implementation Period
    The ASC proposes a new Policy Statement 11 to clarify the statutory 
implementation period and any extensions that may be granted.

Part C: Interim Sanctions

Policy Statement 12: Interim Sanctions
    The ASC proposes a new Policy Statement 12 which modifies existing 
Policy Statement 8 to clarify interim sanctions which may be imposed on 
State Programs when those programs fail to be effective. The proposed 
procedures include due process provisions and rules of evidence, and 
would establish timeliness for proceedings.

IV. Request for Comment

    The ASC seeks comment on all aspects of the proposed Policy 
Statements. In addition, the ASC requests comments on whether the 
proposed Policy Statements provide State Programs with the necessary 
information to understand the ASC's expectations during a Compliance 
Review.
    The text of the proposed Policy Statements is as follows:

Contents
Introduction and Purpose
Part A: Appraiser Program
Policy Statement 1
Statutes, Regulations, Policies and Procedures Governing State 
Appraiser Programs
    A. State Regulatory Structure
    B. Funding and Staffing
    C. Minimum Criteria
    D. Federally Recognized Appraiser Classifications
    E. Non-Federally Recognized Credentials
    F. Appraisal Standards
    G. Exemptions
    H. ASC Staff Attendance at State Board Meetings
    I. Summary of Requirements
Policy Statement 2
Temporary Practice
    A. Requirement for Temporary Practice
    B. Excessive Fees or Burdensome Requirements
    C. Summary of Requirements
Policy Statement 3
National Registry of Appraisers
    A. Requirements for the National Registry of Appraisers
    B. Registry Fee and Invoicing Policies
    C. Access to Appraiser Registry Data
    D. Information Sharing
    E. Summary of Requirements
Policy Statement 4
Application Process
    A. Processing of Applications
    B. Qualifying Education for Initial or Upgrade Applications
    C. Continuing Education for Reinstatement and Renewal 
Applications
    D. Experience for Initial or Upgrade Applications
    E. Examination
    F. Summary of Requirements
Policy Statement 5
Reciprocity
    A. Reciprocity Policy
    B. Application of Reciprocity Policy
    C. Appraiser Compliance Requirements
    D. Well-Documented Application Files
    E. Summary of Requirements
Policy Statement 6
Education
    A. Course Approval
    B. Distance Education
    C. Summary of Requirements
Policy Statement 7
State Agency Enforcement
    A. State Agency Regulatory Program
    B. Enforcement Process
    C. Summary of Requirements
Part B: AMC Program
Policy Statement 8
Statutes, Regulations, Policies and Procedures Governing State AMC 
Programs
    A. Participating States and ASC Oversight
    B. Relation to State Law
    C. Funding and Staffing
    D. Minimum Requirements for Registration and Supervision of AMCs 
as Established by the AMC Rule
    E. Summary of Requirements
Policy Statement 9
National Registry of AMCs (AMC Registry)
    A. Requirements for the AMC Registry
    B. Registry Fee and Invoicing Policies
    C. Reporting Requirements
    D. Access to AMC Registry Data
    E. Summary of Requirements
Policy Statement 10
State Agency Enforcement
    A. State Agency Regulatory Program
    B. Enforcement Process
    C. Summary of Requirements
Policy Statement 11
Statutory Implementation Period
Part C: Interim Sanctions
Policy Statement 12
Interim Sanctions
    A. Authority
    B. Opportunity to be Heard or Correct Conditions
    C. Procedures
Appendices
Appendix A--Compliance Review Process
Appendix B--Glossary of Terms

Introduction and Purpose

    Title XI of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 as amended (Title XI) established the Appraisal 
Subcommittee of the Federal Financial Institutions Examination Council 
(ASC).\8\ The purpose of Title XI is to provide protection of Federal 
financial and public policy interests by upholding Title XI 
requirements for appraisals performed for federally related 
transactions. Specifically, those appraisals shall be 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.
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    \8\ The ASC board is made up of seven members. Five members are 
designated by the heads of the FFIEC agencies (Board of Governors of 
the Federal Reserve System, Bureau of Consumer Financial Protection, 
Federal Deposit Insurance Corporation, Office of the Comptroller of 
the Currency, and National Credit Union Administration). The other 
two members are designated by the heads of the Department of Housing 
and Urban Development and the Federal Housing Finance Agency.
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    Pursuant to Title XI, one of the ASC's core functions is to monitor 
the requirements established by the States \9\ for certification and 
licensing of appraisers qualified to perform appraisals in connection 
with federally related transactions.\10\ Title XI as amended by the 
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 
(Dodd-Frank Act) \11\ expanded the ASC's core functions to include 
monitoring of the requirements established by States that elect to

[[Page 43969]]

register and supervise the operations and activities of appraisal 
management companies \12\ (AMCs).\13\
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    \9\ See Appendix B, Glossary of Terms, for the definition of 
``State.''
    \10\ See Appendix B, Glossary of Terms, for the definition of 
``federally related transaction.''
    \11\ Public Law. 111-203, 124 Stat. 1376.
    \12\ Title XI Sec.  1103(a)(1)(B), 12 U.S.C. 3332.
    \13\ See Appendix B, Glossary of Terms, for the definition of 
``appraisal management company'' or AMC.
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    The ASC performs periodic Compliance Reviews \14\ of each State 
appraiser regulatory program (Appraiser Program) to determine 
compliance or lack thereof with Title XI, and to assess implementation 
of minimum requirements for credentialing of appraisers as adopted by 
the Appraiser Qualifications Board (The Real Property Appraiser 
Qualification Criteria or AQB Criteria). As a result of the Dodd-Frank 
Act amendments to Title XI, States with an AMC regulatory program (AMC 
Program) will be evaluated during the Compliance Review to determine 
compliance or lack thereof with Title XI, and to assess implementation 
of the minimum requirements for State registration and supervision of 
AMCs as established by the
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    \14\ See Appendix A, Compliance Review Process.
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    AMC Rule.\15\
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    \15\ The Dodd-Frank Act required the Office of the Comptroller 
of the Currency; Board of Governors of the Federal Reserve System; 
Federal Deposit Insurance Corporation; National Credit Union 
Administration; Bureau of Consumer Financial Protection; and Federal 
Housing Finance Agency to establish, by rule, minimum requirements 
to be imposed by a participating State appraiser certifying and 
licensing agency on AMCs doing business in the State. (Title XI 
Sec.  1124(a), 12 U.S.C. 3353(a).) Those rules were finalized and 
published on June 9, 2015, at 80 Federal Register 32658 with an 
effective date of August 10, 2015. (12 CFR 34.210-34.216; 12 CFR 
225.190-225.196; 12 CFR 323.8-323.14; 12 CFR 1222.20-1222.26.)
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    The ASC is issuing these revised Policy Statements \16\ in three 
parts to provide States with the necessary information to maintain 
their Appraiser Programs and AMC Programs in compliance with Title XI:
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    \16\ These Policy Statements, adopted [date to be inserted when 
final], supersede all previous Policy Statements adopted by the ASC.
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    [rtarr8] Part A, Appraiser Program--Policy Statements 1 through 7 
correspond with the categories that are: (a) Evaluated during the 
Appraiser Program Compliance Review; and (b) included in the ASC's 
Compliance Review Report of the Appraiser Program.
    [rtarr8] Part B, AMC Program--Policy Statements 8 through 11 
correspond with the categories that are: (a) Evaluated during the AMC 
Program Compliance Review; and (b) included in the ASC's Compliance 
Review Report of the AMC Program.
    [rtarr8] Part C, Interim Sanctions--Policy Statement 12 sets forth 
required procedures in the event that interim sanctions are imposed 
against a State by the ASC for non-compliance in either the Appraiser 
Program or the AMC Program.

Part A: Appraiser Program

Policy Statement 1

Statutes, Regulations, Policies and Procedures Governing State 
Appraiser Programs
A. State Regulatory Structure
    Title XI requires the ASC to monitor each State appraiser 
certifying and licensing agency for the purpose of determining whether 
each such agency has in place policies, practices and procedures 
consistent with the requirements of Title XI.\17\ The ASC recognizes 
that each State may have legal, fiscal, regulatory or other factors 
that may influence the structure and organization of its Appraiser 
Program. Therefore, a State has flexibility to structure its Appraiser 
Program so long as it meets its Title XI-related responsibilities.
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    \17\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
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    States should maintain an organizational structure for appraiser 
certification, licensing and supervision that avoids conflicts of 
interest. A State agency may be headed by a board, commission or an 
individual. State board \18\ or commission members, or employees in 
policy or decision-making positions, should understand and adhere to 
State statutes and regulations governing performance of 
responsibilities consistent with the highest ethical standards for 
public service. In addition, Appraiser Programs using private entities 
or contractors should establish appropriate internal policies, 
procedures and safeguards to promote compliance with the State agency's 
responsibilities under Title XI and these Policy Statements.
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    \18\ See Appendix B, Glossary of Terms, for the definition of 
``State board.''
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B. Funding and Staffing
    The Dodd-Frank Act amended Title XI to require the ASC to determine 
whether States have sufficient funding and staffing to meet their Title 
XI requirements. Compliance with this provision requires that a State 
must provide its Appraiser Program with funding and staffing sufficient 
to carry out its Title XI-related duties. The ASC evaluates the 
sufficiency of funding and staffing as part of its review of all 
aspects of an Appraiser Program's effectiveness, including the adequacy 
of State boards, committees, or commissions responsible for carrying 
out Title XI-related duties.
C. Minimum Criteria
    Title XI requires States to adopt and/or implement all relevant AQB 
Criteria. Requirements established by a State for certified residential 
or certified general appraisers, as well as requirements established 
for licensed appraisers, trainee appraisers and supervisory appraisers 
must meet or exceed applicable AQB Criteria.
D. Federally Recognized Appraiser Classifications
State Certified Appraisers
    ``State certified appraisers'' means those individuals who have 
satisfied the requirements for residential or general certification in 
a State whose criteria for certification meet or exceed the applicable 
minimum AQB Criteria. Permitted scope of practice and designation for 
State certified residential or certified general appraisers must be 
consistent with State and Federal laws, including regulations and 
supplementary guidance.
State Licensed Appraisers
    ``State licensed appraisers'' means those individuals who have 
satisfied the requirements for licensing in a State whose criteria for 
licensing meet or exceed the applicable minimum AQB Criteria. The 
permitted scope of practice and designation for State licensed 
appraisers must be consistent with State and Federal laws, including 
regulations and supplementary guidance.
Trainee Appraisers
    ``Trainee appraisers'' means those individuals who have satisfied 
the requirements for credentialing in a State whose criteria for 
credentialing meet or exceed the applicable minimum AQB Criteria. Any 
minimum qualification requirements established by a State for 
individuals in the position of ``trainee appraiser'' or ``supervisory 
appraiser'' must meet or exceed the applicable minimum AQB Criteria. 
ASC staff will evaluate State designations such as ``registered 
appraiser,'' ``apprentice appraiser,'' ``provisional appraiser,'' or 
any other similar designation to determine if, in substance, such 
designation is consistent with a ``trainee appraiser'' designation and, 
therefore, administered to comply with Title XI. The permitted scope of 
practice and designation for trainee appraisers must be consistent with 
State and Federal laws, including regulations and supplementary 
guidance.
    Any State or Federal agency may impose additional appraiser 
qualification requirements for trainee, State licensed, certified 
residential or

[[Page 43970]]

certified general classifications, if they consider such requirements 
necessary to carry out their responsibilities under Federal and/or 
State statutes and regulations, so long as the additional qualification 
requirements do not preclude compliance with AQB Criteria.
E. Non-Federally Recognized Credentials
    States using non-federally recognized credentials or designations 
\19\ must ensure that they are easily distinguished from the federally 
recognized credentials.
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    \19\ See Appendix B, Glossary of Terms, for the definition of 
``non-federally recognized credentials or designations.''
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F. Appraisal Standards
    Title XI and the Federal financial institutions regulatory 
agencies' regulations mandate that all appraisals performed in 
connection with federally related transactions be in written form, 
prepared in accordance with generally accepted appraisal standards as 
promulgated by the Appraisal Standards Board (ASB) in the Uniform 
Standards of Professional Appraisal Practice (USPAP), and be subject to 
appropriate review for compliance with USPAP.\20\ States that have 
incorporated USPAP into State law should ensure that statutes or 
regulations are updated timely to adopt the current version of USPAP, 
or if State law allows, automatically incorporate the latest version of 
USPAP as it becomes effective. States should consider ASB Advisory 
Opinions, Frequently Asked Questions, and other written guidance issued 
by the ASB regarding interpretation and application of USPAP.
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    \20\ See Appendix B, Glossary of Terms for the definition of 
``Uniform Standards of Professional Appraisal Practice.''
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    Any State or Federal agency may impose additional appraisal 
standards if they consider such standards necessary to carry out their 
responsibilities, so long as additional appraisal standards do not 
preclude compliance with USPAP or the Federal financial institutions 
regulatory agencies' appraisal regulations for work performed for 
federally related transactions.
    The Federal financial institutions regulatory agencies' appraisal 
regulations define ``appraisal'' and identify which real estate-related 
financial transactions require the services of a State certified or 
licensed appraiser. These regulations define ``appraisal'' as a 
``written statement independently and impartially prepared by a 
qualified appraiser setting forth an opinion as to the market value of 
an adequately described property as of a specific date(s) supported by 
the presentation and analysis of relevant market information.'' Per 
these regulations, an appraiser performing an appraisal review which 
includes the reviewer providing his or her own opinion of value 
constitutes an appraisal. Under these same regulations, an appraisal 
review that does not include the reviewer providing his or her own 
opinion of value does not constitute an appraisal. Therefore, under the 
Federal financial institutions regulatory agencies' regulations, only 
those transactions that involve appraisals for federally related 
transactions require the services of a State certified or licensed 
appraiser.
G. Exemptions
    Title XI and the Federal financial institutions regulatory 
agencies' regulations specifically require the use of State certified 
or licensed appraisers in connection with the appraisal of certain real 
estate-related financial transactions.\21\ A State may not exempt any 
individual or group of individuals from meeting the State's 
certification or licensing requirements if the individual or group 
member performs an appraisal when Federal statutes and regulations 
require the use of a certified or licensed appraiser. For example, an 
individual who has been exempted by the State from its appraiser 
certification or licensing requirements because he or she is an 
officer, director, employee or agent of a federally regulated financial 
institution would not be permitted to perform an appraisal in 
connection with a federally related transaction.
---------------------------------------------------------------------------

    \21\ Title XI Sec.  1112, 12 U.S.C. 3341; Title XI Sec.  1113, 
12 U.S.C. 3342; Title XI Sec.  1114, 12 U.S.C. 3343.
---------------------------------------------------------------------------

H. ASC Staff Attendance at State Board Meetings
    The efficacy of the ASC's Compliance Review process rests on the 
ASC's ability to obtain reliable information about all areas of a 
State's Appraiser Program. ASC staff regularly attends open State board 
meetings as part of the on-site Compliance Review process. States are 
expected to make available for review by ASC staff minutes of closed 
meetings and executive sessions. States are encouraged to allow ASC 
staff to attend closed and executive sessions of State board meetings 
where such attendance would not violate State law or regulation or be 
inconsistent with other legal obligations of the State board. ASC staff 
is obligated to protect information obtained during the Compliance 
Review process concerning the privacy of individuals and any 
confidential matters.
I. Summary of Requirements
    1. States must require that appraisals be performed in accordance 
with the latest version of USPAP.\22\
---------------------------------------------------------------------------

    \22\ Title XI Sec.  1101, 12 U.S.C. 3331; Title XI Sec.  
1118(a), 12 U.S.C. 3347; AQB Real Property Appraiser Qualification 
Criteria.
---------------------------------------------------------------------------

    2. States must, at a minimum, adopt and/or implement all relevant 
AQB Criteria.\23\
---------------------------------------------------------------------------

    \23\ Title XI Sec. Sec.  1116(a), (c) and (e), 12 U.S.C. 3345; 
Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    3. States must have policies, practices and procedures consistent 
with Title XI.\24\
---------------------------------------------------------------------------

    \24\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    4. States must have funding and staffing sufficient to carry out 
their Title XI-related duties.\25\
---------------------------------------------------------------------------

    \25\ Id; Title XI Sec.  1118(b), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    5. States must use proper designations and permitted scope of 
practice for certified residential; certified general; licensed; and 
trainee classifications.\26\
---------------------------------------------------------------------------

    \26\ Title XI Sec. Sec.  1116(a), (c) and (e), 12 U.S.C. 3345; 
Title XI Sec.  1118(a), 12 U.S.C. 3347; Title XI Sec.  1113, 12 
U.S.C. 3342; AQB Real Property Appraiser Qualification Criteria.
---------------------------------------------------------------------------

    6. State board members, and any persons in policy or decision-
making positions, must perform their responsibilities consistent with 
Title XI.\27\
---------------------------------------------------------------------------

    \27\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    7. States' certification and licensing requirements must meet the 
minimum requirements set forth in Title XI.\28\
---------------------------------------------------------------------------

    \28\ Title XI Sec. Sec.  1116(a), (c) and (e), 12 U.S.C. 3345.
---------------------------------------------------------------------------

    8. State requirements for trainee appraisers and supervisory 
appraisers must meet or exceed the AQB Criteria.
    9. State agencies must be granted adequate authority by the State 
to maintain an effective regulatory Appraiser Program in compliance 
with Title XI.\29\
---------------------------------------------------------------------------

    \29\ Title XI Sec.  1118(b), 12 U.S.C. 3347.
---------------------------------------------------------------------------

Policy Statement 2

Temporary Practice
A. Requirement for Temporary Practice
    Title XI requires State agencies to recognize, on a temporary 
basis, the certification or license of an out-of-State appraiser 
entering the State for the purpose of completing an appraisal 
assignment \30\ for a federally related transaction. States are not, 
however, required to grant temporary practice permits to trainee 
appraisers. The out-of-State appraiser must register with the State 
agency in the State of temporary practice (Host State). A State may 
determine the process necessary for

[[Page 43971]]

``registration'' provided such process complies with Title XI and does 
not impose ``excessive fees or burdensome requirements,'' as determined 
by the ASC.\31\ Thus, a credentialed appraiser \32\ from State A has a 
statutory right to enter State B (the Host State) to perform an 
assignment concerning a federally related transaction, so long as the 
appraiser registers with the State agency in State B prior to 
performing the assignment. Though Title XI contemplates reasonably free 
movement of credentialed appraisers across State lines, an out-of-State 
appraiser must comply with the Host State's real estate appraisal 
statutes and regulations and is subject to the Host State's full 
regulatory jurisdiction. States should utilize the National Registry of 
Appraisers to verify credential status on applicants for temporary 
practice.
---------------------------------------------------------------------------

    \30\ See Appendix B, Glossary of Terms, for the definition of 
``assignment.''
    \31\ Title XI Sec.  1122(a)(2), 12 U.S.C. 3351.
    \32\ See Appendix B, Glossary of Terms, for the definition of 
``credentialed appraisers.''
---------------------------------------------------------------------------

B. Excessive Fees or Burdensome Requirements
    Title XI prohibits States from imposing excessive fees or 
burdensome requirements, as determined by the ASC, for temporary 
practice.\33\ Adherence by State agencies to the following mandates and 
prohibitions will deter the imposition of excessive fees or burdensome 
requirements.
---------------------------------------------------------------------------

    \33\ Title XI Sec.  1122(a)(2), 12 U.S.C. 3351.
---------------------------------------------------------------------------

    Host State agencies must:
    a. Issue temporary practice permits on an assignment basis;
    b. issue temporary practice permits within five business days of 
receipt of a completed application, or notify the applicant and 
document the file as to the circumstances justifying delay or other 
action;
    c. issue temporary practice permits designating the permit's 
effective date;
    d. take regulatory responsibility for a temporary practitioner's 
unethical, incompetent and/or fraudulent practices performed while in 
the State;
    e. notify the appraiser's home State agency \34\ in the case of 
disciplinary action concerning a temporary practitioner;
---------------------------------------------------------------------------

    \34\ See Appendix B, Glossary of Terms, for the definition of 
``home State agency.''
---------------------------------------------------------------------------

    f. allow at least one temporary practice permit extension through a 
streamlined process;
    g. track all temporary practice permits using a permit log which 
includes the name of the applicant, date application received, date 
completed application received, date of issuance, and date of 
expiration, if any (States are strongly encouraged to maintain this 
information in an electronic, sortable format); and
    h. maintain documentation sufficient to demonstrate compliance with 
this Policy Statement.
    Host State agencies may not:
    a. Limit the valid time period of a temporary practice permit to 
less than 6 months (unless the applicant requests a specific end date 
and the applicant is allowed an extension if required to complete the 
assignment, the applicant's credential is no longer in active status 
during that period of time);
    b. limit an appraiser to one temporary practice permit per calendar 
year; \35\
---------------------------------------------------------------------------

    \35\ State agencies may establish by statute or regulation a 
policy that places reasonable limits on the number of times an out-
of-State certified or licensed appraiser may exercise his or her 
temporary practice rights in a given year. If such a policy is not 
established, a State agency may choose not to honor an out-of-State 
certified or licensed appraiser's temporary practice rights if it 
has made a determination that the appraiser is abusing his or her 
temporary practice rights and is regularly engaging in real estate 
appraisal services within the State.
---------------------------------------------------------------------------

    c. charge a temporary practice permit fee exceeding $250, including 
one extension fee;
    d. impose State appraiser qualification requirements for education, 
experience and/or exam upon temporary practitioners;
    e. require temporary practitioners to obtain a certification or 
license in the State of temporary practice;
    f. require temporary practitioners to affiliate with an in-State 
licensed or certified appraiser;
    g. refuse to register licensed or certified appraisers seeking 
temporary practice in a State that does not have a licensed or 
certified level credential; or
    h. prohibit temporary practice.
    Home State agencies may not:
    a. Delay the issuance of a written ``letter of good standing'' or 
similar document for more than five business days after receipt of a 
request; or
    b. fail to consider and, if appropriate, take disciplinary action 
when one of its certified or licensed appraisers is disciplined by 
another State.
C. Summary of Requirements
    1. States must recognize, on a temporary basis, appraiser 
credentials issued by another State if the property to be appraised is 
part of a federally related transaction.\36\
---------------------------------------------------------------------------

    \36\ Title XI Sec.  1122(a)(1), 12 U.S.C. 3351.
---------------------------------------------------------------------------

    2. State agencies must adhere to mandates and prohibitions as 
determined by the ASC that deter the imposition of excessive fees or 
burdensome requirements for temporary practice.\37\
---------------------------------------------------------------------------

    \37\ Title XI Sec.  1122(a)(2), 12 U.S.C. 3351.
---------------------------------------------------------------------------

Policy Statement 3

National Registry of Appraisers
A. Requirements for the National Registry of Appraisers
    Title XI requires the ASC to maintain a National Registry of State 
certified and licensed appraisers who are eligible to perform 
appraisals in federally related transactions (Appraiser Registry).\38\ 
Title XI further requires the States to transmit to the ASC: (1) A 
roster listing individuals who have received a State certification or 
license in accordance with Title XI; (2) reports on the issuance and 
renewal of licenses and certifications, sanctions, disciplinary 
actions, revocations and suspensions; and (3) the registry fee as set 
by the ASC \39\ from individuals who have received certification or 
licensing. States must notify the ASC as soon as practicable if a 
credential holder listed on the Appraiser Registry does not qualify for 
the credential held.
---------------------------------------------------------------------------

    \38\ Title XI Sec.  1103(a)(3), 12 U.S.C. 3332.
    \39\ Title XI Sec.  1109, Roster of State certified or licensed 
appraisers; authority to collect and transmit fees, requires the ASC 
to consider at least once every 5 years whether to adjust the dollar 
amount of the registry fees to account for inflation. (Title XI 
Sec.  1109(a), 12 U.S.C. 3338.)
---------------------------------------------------------------------------

    Roster and registry fee requirements apply to all individuals who 
receive State certifications or licenses, originally or by reciprocity, 
whether or not the individuals are, in fact, performing or planning to 
perform appraisals in federally related transactions. If an appraiser 
is certified or licensed in more than one State, the appraiser is 
required to be on each State's roster of certified or licensed 
appraisers, and a registry fee is due from each State in which the 
appraiser is certified or licensed.
    Only AQB-compliant certified and licensed appraisers in active 
status on the Appraiser Registry are eligible to perform appraisals in 
connection with federally related transactions. Only those appraisers 
whose registry fees have been transmitted to the ASC will be eligible 
to be on the Appraiser Registry for the period subsequent to payment of 
the fee.
    Some States may give State certified or licensed appraisers an 
option to not pay the registry fee. If a State certified or licensed 
appraiser chooses not to pay the registry fee, then the Appraiser 
Program must ensure that any potential user of that appraiser's 
services is aware that the appraiser is not eligible to perform 
appraisals for federally related transactions. The Appraiser Program 
must place a conspicuous notice directly on the face of any evidence of 
the appraiser's authority to appraise

[[Page 43972]]

stating, ``Not Eligible To Appraise Federally Related Transactions,'' 
and the appraiser must not be listed in active status on the Appraiser 
Registry.
    The ASC extranet application allows States to update their 
appraiser credential information directly to the Appraiser Registry. 
Only Authorized Registry Officials are allowed to request access for 
their State personnel (see section C below). The ASC will issue a User 
Name and Password to the designated State personnel responsible for 
that State's Appraiser Registry entries. Designated State personnel are 
required to protect the right of access, and not share their User Name 
or Password with anyone. States must adopt and implement a written 
policy to protect the right of access, as well as the ASC issued User 
Name and Password. The ASC will provide detailed specifications 
regarding the data elements on the Appraiser Registry.
B. Registry Fee and Invoicing Policies
    Each State must remit to the ASC the annual registry fee, as set by 
the ASC, for State certified or licensed appraisers within the State to 
be listed on the Appraiser Registry. Requests to prorate refunds or 
partial-year registrations will not be granted. If a State collects 
multiple-year fees for multiple-year certifications or licenses, the 
State may choose to remit to the ASC the total amount of the multiple-
year registry fees or the equivalent annual fee amount. The ASC will, 
however, record appraisers on the Appraiser Registry only for the 
number of years for which the ASC has received payment. Nonpayment by a 
State of an appraiser's registry fee may result in the status of that 
appraiser being listed as ``inactive.'' States must reconcile and pay 
registry invoices in a timely manner (45 calendar days after the 
invoice date). When a State's failure to pay a past due invoice results 
in appraisers being listed as inactive, the ASC will not change those 
appraisers back to active status until payment is received from the 
State. An inactive status on the Appraiser Registry, for whatever the 
reason, renders an appraiser ineligible to perform appraisals in 
connection with federally related transactions.
C. Access to Appraiser Registry Data
    The ASC Web site provides free access to the public portion of the 
Appraiser Registry at www.asc.gov. The public portion of the Appraiser 
Registry data may be downloaded using predefined queries or user-
customized applications.
    Access to the full database, which includes non-public data (e.g., 
certain disciplinary action information), is restricted to authorized 
State and Federal regulatory agencies. States must designate a senior 
official, such as an executive director, to serve as the State's 
Authorized Registry Official, and provide to the ASC, in writing, 
information regarding the designated Authorized Registry Official. 
States must ensure that the authorization information provided to the 
ASC is updated and accurate.
D. Information Sharing
    Information sharing (routine exchange of certain information among 
lenders, governmental entities, State agencies and the ASC) is 
essential for carrying out the purposes of Title XI. Title XI requires 
the ASC, any other Federal agency or instrumentality, or any federally 
recognized entity to report any action of a State certified or licensed 
appraiser that is contrary to the purposes of Title XI to the 
appropriate State agency for disposition. The ASC believes that full 
implementation of this Title XI requirement is vital to the integrity 
of the system of State appraiser regulation. States are encouraged to 
develop and maintain procedures for sharing of information among 
themselves.
    The Appraiser Registry's value and usefulness are largely dependent 
on the quality and frequency of State data submissions. Accurate and 
frequent data submissions from all States are necessary to maintain an 
up-to-date Appraiser Registry. States must submit appraiser data in a 
secure format to the ASC at least monthly. If there are no changes to 
the data, the State agency must notify the ASC of that fact in writing. 
States are encouraged to submit data as frequently as possible.
    States must report all disciplinary action \40\ taken against an 
appraiser to the ASC via the extranet application within 5 business 
days after the disciplinary action is final, as determined by State 
law.\41\ States not reporting via the extranet application must 
provide, in writing to the ASC, a description of the circumstances 
preventing compliance with this requirement.\42\
---------------------------------------------------------------------------

    \40\ See Appendix B, Glossary of Terms, for the definition of 
``disciplinary action.''
    \41\ Id.
    \42\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    For the most serious disciplinary actions (i.e., voluntary 
surrenders, suspensions and revocations, or any action that interrupts 
a credential holder's ability to practice), the appraiser's status must 
be changed on the Appraiser Registry to ``inactive,'' thereby making 
the appraiser ineligible to perform appraisals for federally related 
transactions or other transactions requiring the use of State certified 
or licensed appraisers.\43\
---------------------------------------------------------------------------

    \43\ Id.
---------------------------------------------------------------------------

    Title XI also contemplates the reasonably free movement of 
certified and licensed appraisers across State lines. This freedom of 
movement assumes, however, that certified and licensed appraisers are, 
in all cases, held accountable and responsible for their actions while 
performing appraisal activities.
E. Summary of Requirements
    1. States must reconcile and pay registry invoices in a timely 
manner (45 calendar days after the invoice date).\44\
---------------------------------------------------------------------------

    \44\ Title XI Sec.  1118(a), 12 U.S.C. 3347; Title XI Sec.  
1109(a), 12 U.S.C. 3338.
---------------------------------------------------------------------------

    2. States must report all disciplinary action taken against an 
appraiser to the ASC via the extranet application within 5 business 
days after the disciplinary action is final, as determined by State 
law.\45\
---------------------------------------------------------------------------

    \45\ Id.
---------------------------------------------------------------------------

    3. States not reporting via the extranet application must provide, 
in writing to the ASC, a description of the circumstances preventing 
compliance with this requirement.\46\
---------------------------------------------------------------------------

    \46\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    4. For the most serious disciplinary actions (i.e., voluntary 
surrenders, suspensions and revocations, or any action that interrupts 
a credential holder's ability to practice), the appraiser's status must 
be changed on the Appraiser Registry to ``inactive,'' thereby making 
the appraiser ineligible to perform appraisals for federally related 
transactions or other transactions requiring the use of State certified 
or licensed appraisers.\47\
---------------------------------------------------------------------------

    \47\ Id.
---------------------------------------------------------------------------

    5. States must designate a senior official, such as an executive 
director, who will serve as the State's Authorized Registry Official, 
and provide to the ASC, in writing, information regarding the selected 
Authorized Registry Official, and any individual(s) authorized to act 
on their behalf.\48\
---------------------------------------------------------------------------

    \48\ Id.
---------------------------------------------------------------------------

    6. States must ensure that the authorization information provided 
to the ASC is updated and accurate.\49\
---------------------------------------------------------------------------

    \49\ Id.
---------------------------------------------------------------------------

    7. States must adopt and implement a written policy to protect the 
right of access to the Appraiser Registry, as well as the ASC issued 
User Name and Password.\50\
---------------------------------------------------------------------------

    \50\ Id.

---------------------------------------------------------------------------

[[Page 43973]]

    8. States must ensure the accuracy of all data submitted to the 
Appraiser Registry.\51\
---------------------------------------------------------------------------

    \51\ Id.
---------------------------------------------------------------------------

    9. States must submit appraiser data (other than discipline) to the 
ASC at least monthly. If a State's data does not change during the 
month, the State agency must notify the ASC of that fact in 
writing.\52\
---------------------------------------------------------------------------

    \52\ Id.
---------------------------------------------------------------------------

    10. If a State certified or licensed appraiser chooses not to pay 
the registry fee, the State must ensure that any potential user of that 
appraiser's services is aware that the appraiser's certificate or 
license is limited to performing appraisals only in connection with 
non-federally related transactions.\53\
---------------------------------------------------------------------------

    \53\ Id.
---------------------------------------------------------------------------

Policy Statement 4

Application Process
    AQB Criteria sets forth the minimum education, experience and 
examination requirements applicable to all States for credentialing of 
real property appraisers (certified, licensed, trainee and 
supervisory). In the application process, States must, at a minimum, 
employ a reliable means of validating both education and experience 
credit claimed by applicants for credentialing.\54\ Effective January 
1, 2017, AQB Criteria also requires States to assess whether an 
applicant for a real property appraiser credential possesses a 
background that would not call into question public trust. The basis 
for such assessment shall be a matter left to the individual States, 
and must, at a minimum, be documented to the file.
---------------------------------------------------------------------------

    \54\ Includes applications for credentialing of trainee, 
licensed, certified residential or certified general 
classifications.
---------------------------------------------------------------------------

A. Processing of Applications
    States must process applications in a consistent, equitable and 
well-documented manner. Applications for credentialing should be timely 
processed by State agencies (within 90 calendar days after receipt of a 
completed application). Any delay in the processing of applications 
must be sufficiently documented in the file to explain the delay. 
States must ensure appraiser credential applications submitted for 
processing do not contain invalid examinations as established by AQB 
Criteria.
    States must obtain and maintain sufficient relevant documentation 
pertaining to an application for issuance, upgrade and renewal of a 
credential so as to enable understanding of the facts and 
determinations in the matter and the reasons for those determinations. 
Documentation must include:
    1. Application receipt date;
    2. Education;
    3. Experience;
    4. Examination;
    5. Continuing education; and
    6. Any administrative or disciplinary action taken in connection 
with the application process, including results of any continuing 
education audit.
B. Qualifying Education for Initial or Upgrade Applications
    States must verify that:
    (1) The applicant's claimed education courses are acceptable under 
AQB Criteria; and
    (2) the applicant has successfully completed courses consistent 
with AQB Criteria for the appraiser credential sought.
    States may not accept an affidavit for claimed qualifying education 
from applicants for any federally recognized credential.\55\ States 
must maintain adequate documentation to support verification of 
education claimed by applicants.
---------------------------------------------------------------------------

    \55\ If a State accepts education-related affidavits from 
applicants for initial licensure in any non-certified 
classification, upon the appraiser's application to upgrade to a 
certified classification, the State must require documentation to 
support the appraiser's educational qualification for the certified 
classification, not just the incremental amount of education 
required to move from the non-certified to the certified 
classification. This requirement applies to all federally recognized 
credentials.
---------------------------------------------------------------------------

C. Continuing Education for Reinstatement and Renewal Applications
1. Reinstatement Applications
    States must verify that:
    (1) The applicant's claimed continuing education courses are 
acceptable under AQB Criteria; and
    (2) the applicant has successfully completed all continuing 
education consistent with AQB Criteria for reinstatement of the 
appraiser credential sought.
    States may not accept an affidavit for continuing education claimed 
from applicants for reinstatement. Applicants for reinstatement must 
submit documentation to support claimed continuing education and States 
must maintain adequate documentation to support verification of claimed 
education.
2. Renewal Applications
    States must ensure that continuing education courses for renewal of 
an appraiser credential are consistent with AQB Criteria and that 
continuing education hours required for renewal of an appraiser 
credential were completed consistent with AQB Criteria. States may 
accept affidavits for continuing education credit claimed for 
credential renewal so long as the State implements a reliable 
validation procedure that adheres to the following objectives and 
requirements:
a. Validation Objectives
    The State's validation procedures must be structured to permit 
acceptable projections of the sample results to the entire population 
of subject appraisers. Therefore, the sample must include an adequate 
number of affidavits selected from each federally recognized credential 
level to have a reasonable chance of identifying appraisers who fail to 
comply with AQB Criteria, and the sample must include a statistically 
relevant representation of the appraiser population being sampled.
b. Minimum Standards
    (1) Validation must include a prompt post-approval audit. Each 
audit of an affidavit for continuing education credit claimed must be 
completed within 60 business days from the date the credential is 
scheduled for renewal (based on the credential's expiration date). To 
ensure the audit is a statistically relevant representation, a sampling 
of credentials that were renewed after the scheduled expiration date 
and/or beyond the date the sample was selected, must also be audited to 
ensure that a credential holder may not avoid being selected for a 
continuing education audit by renewing early or late.
    (2) States must audit the continuing education-related affidavit 
for each credentialed appraiser selected in the sampling procedure.
    (3) States must determine that education courses claimed conform to 
AQB Criteria and that the appraiser successfully completed each course.
    (4) When a State determines that an appraiser's continuing 
education does not meet AQB Criteria, and the appraiser has failed to 
complete any remedial action offered, the State must take appropriate 
action to suspend the appraiser's eligibility to perform appraisals in 
federally related transactions until such time that the requisite 
continuing education has been completed. The State must notify the ASC 
within five (5) business days after taking such action in order for the 
appraiser's record on the Appraiser Registry to be updated 
appropriately.
    (5) If a State determines that a renewal applicant knowingly 
falsely attested to completing the continuing education

[[Page 43974]]

required by AQB Criteria, the State must take appropriate 
administrative and/or disciplinary action and report such action, if 
deemed to be discipline, to the ASC within five (5) business days.
    (6) If more than ten percent of the audited appraisers fail to meet 
the AQB Criteria, the State must take remedial action \56\ to address 
the apparent weakness of its affidavit process. The ASC will determine 
on a case-by-case basis whether remedial actions are effective and 
acceptable.
---------------------------------------------------------------------------

    \56\ For example:
    (1) A State may conduct an additional audit using a higher 
percentage of audited appraisers; or
    (2) a State may publicly post action taken to sanction non-
compliant appraisers to increase awareness in the appraiser 
community of the importance of compliance with continuing education 
requirements.
---------------------------------------------------------------------------

    (7) In the case of a renewal being processed after the credential's 
expiration date, but within the State's allowed grace period for a late 
renewal, the State must establish a reliable process to audit 
affidavits for continuing education (e.g., requiring documentation of 
all continuing education).
c. Documentation
    States must maintain adequate documentation to support its 
affidavit renewal and audit procedures and actions.
d. List of Education Courses
    To promote accountability, the ASC encourages States accepting 
affidavits for continuing education credit claimed for credential 
renewal to require that the appraiser provide a list of courses to 
support the affidavit.
D. Experience for Initial or Upgrade Applications
    States must ensure that appraiser experience logs conform to AQB 
Criteria. States may not accept an affidavit for experience credit 
claimed by applicants for any federally recognized credential.\57\
---------------------------------------------------------------------------

    \57\ See Policy Statement 1D and E for discussion of ``federally 
recognized credential'' and ``non-federally recognized credential.'' 
If prior to July 1, 2013, a State accepted experience-related 
affidavits from applicants for initial licensure in any non-
certified classification, upon the appraiser's application to 
upgrade to a certified classification, the State must require 
experience documentation to support the appraiser's qualification 
for the certified classification, not just the incremental amount of 
experience required to move from the non-certified to the certified 
classification. For example, if a State accepted an experience 
affidavit from an appraiser to support the appraiser's initial hours 
to qualify for the licensed classification, and subsequently that 
appraiser applies to upgrade to the certified residential 
classification, the State must require documentation to support the 
full experience hours required for the certified residential 
classification, not just the difference in hours between the two 
classifications.
---------------------------------------------------------------------------

1. Validation Required
    States must implement a reliable validation procedure to verify 
that each applicant's experience meets AQB Criteria, including but not 
limited to, being USPAP compliant and containing the required number of 
hours and months.
2. Validation Procedures, Objectives and Requirements
a. Experience Hours Validation
    States must determine the hours and time period claimed on the 
experience log are accurate. Appraiser Program staff or State board 
members must select the work product to validate the experience hours 
claimed; applicants may not have any role in this selection process.
b. USPAP Compliance
    States must analyze a representative sample of the applicant's work 
product for compliance with USPAP. For appraisal experience to be 
acceptable under AQB Criteria, it must be USPAP compliant. States must 
exercise due diligence in determining whether submitted documentation 
of experience or work product demonstrates compliance with USPAP. 
Persons analyzing work product for USPAP compliance must be 
knowledgeable about appraisal practice and USPAP, and States must be 
able to document how such persons are so qualified.
c. Determination of Experience Time Periods
    Experience time periods must conform to requirements set forth in 
the AQB Criteria for the credential sought.
d. Supporting Documentation
    States must maintain adequate documentation to support validation 
methods. The applicant's file, either electronic or paper, must include 
the information necessary to identify each appraisal assignment 
selected to validate the experience hours claimed and each appraisal 
assignment analyzed by the State for USPAP compliance, notes, letters 
and/or reports prepared by the official(s) evaluating the report for 
USPAP compliance, and any correspondence exchanged with the applicant 
regarding the appraisals submitted. This supporting documentation may 
be discarded upon the completion of the first ASC Compliance Review 
performed after the credential issuance or denial for that applicant.
E. Examination
    States must ensure that an appropriate AQB-approved qualifying 
examination is administered for each of the federally recognized 
appraiser classifications requiring an examination.
F. Summary of Requirements
Processing of Applications
    1. States must process applications in a consistent, equitable and 
well-documented manner.\58\
---------------------------------------------------------------------------

    \58\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    2. States must ensure appraiser credential applications submitted 
for processing do not contain invalid examinations as established by 
AQB Criteria.\59\
---------------------------------------------------------------------------

    \59\ Title XI Sec.  1118(a), 12 U.S.C. 3347; AQB Real Property 
Appraiser Qualification Criteria.
---------------------------------------------------------------------------

    3. States must obtain and maintain sufficient relevant 
documentation pertaining to an application for issuance, upgrade or 
renewal of a credential so as to enable understanding of the facts and 
determinations in the matter and the reasons for those 
determinations.\60\
---------------------------------------------------------------------------

    \60\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

Education
    1. States must verify that the applicant's claimed education 
courses are acceptable under AQB Criteria, whether for initial 
credentialing, renewal, upgrade or reinstatement.\61\
---------------------------------------------------------------------------

    \61\ Id.
---------------------------------------------------------------------------

    2. States must verify that the applicant has successfully completed 
courses consistent with AQB Criteria for the appraiser credential 
sought, whether for initial credentialing, renewal, upgrade or 
reinstatement.\62\
---------------------------------------------------------------------------

    \62\ Id.
---------------------------------------------------------------------------

    3. States must maintain adequate documentation to support 
verification.\63\
---------------------------------------------------------------------------

    \63\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    4. States may not accept an affidavit for education claimed from 
applicants for any federally recognized credential.\64\
---------------------------------------------------------------------------

    \64\ Id.
---------------------------------------------------------------------------

    5. States may not accept an affidavit for continuing education 
claimed from applicants for reinstatement.\65\
---------------------------------------------------------------------------

    \65\ Id.
---------------------------------------------------------------------------

    6. States may accept affidavits for continuing education credit 
claimed for credential renewal so long as the State implements a 
reliable validation procedure.\66\
---------------------------------------------------------------------------

    \66\ Title XI Sec.  1118(a), 12 U.S.C. 3347; AQB Real Property 
Appraiser Qualification Criteria.
---------------------------------------------------------------------------

    7. Audits of affidavits for continuing education credit claimed 
must be completed within sixty (60) business days from the date the 
credential is scheduled for renewal (based on the credential's 
expiration date).\67\
---------------------------------------------------------------------------

    \67\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    8. In the case of a renewal being processed after the credential's

[[Page 43975]]

expiration date, but within the State's allowed grace period for a late 
renewal, the State must establish a reliable process to audit 
affidavits for continuing education (e.g., requiring documentation of 
all continuing education).\68\
---------------------------------------------------------------------------

    \68\ Id.
---------------------------------------------------------------------------

    9. States are required to take remedial action when it is 
determined that more than ten percent of audited appraiser's affidavits 
for continuing education credit claimed fail to meet the minimum AQB 
Criteria.\69\
---------------------------------------------------------------------------

    \69\ Id.
---------------------------------------------------------------------------

    10. States are required to take appropriate administrative and/or 
disciplinary action when it is determined that an applicant knowingly 
falsely attested to completing continuing education.\70\
---------------------------------------------------------------------------

    \70\ Id.
---------------------------------------------------------------------------

    11. When a State determines that an appraiser's continuing 
education does not meet AQB Criteria, and the appraiser has failed to 
complete any remedial action offered, the State must take appropriate 
action to suspend the appraiser's eligibility to perform appraisals in 
federally related transactions until such time that the requisite 
continuing education has been completed. The State must notify the ASC 
within five (5) business days after taking such action in order for the 
appraiser's record on the Appraiser Registry to be updated 
appropriately.\71\
---------------------------------------------------------------------------

    \71\ Id.
---------------------------------------------------------------------------

Experience
    1. States may not accept an affidavit for experience credit claimed 
from applicants for any federally recognized credential.\72\
---------------------------------------------------------------------------

    \72\ Id.
---------------------------------------------------------------------------

    2. States must ensure that appraiser experience logs conform to AQB 
Criteria.\73\
---------------------------------------------------------------------------

    \73\ Title XI Sec.  1118(a), 12 U.S.C. 3347; AQB Real Property 
Appraiser Qualification Criteria.
---------------------------------------------------------------------------

    3. States must use a reliable means of validating appraiser 
experience claims on all initial or upgrade applications for appraiser 
credentialing.\74\
---------------------------------------------------------------------------

    \74\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    4. States must select the work product to validate the experience 
hours claimed on all initial or upgrade applications for appraiser 
credentialing.\75\
---------------------------------------------------------------------------

    \75\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    5. States must analyze a representative sample of the applicant's 
work product for compliance with USPAP on all initial or upgrade 
applications for appraiser credentialing.\76\
---------------------------------------------------------------------------

    \76\ Id.
---------------------------------------------------------------------------

    6. States must exercise due diligence in determining whether 
submitted documentation of experience or work product demonstrates 
compliance with USPAP on all initial or upgrade applications for 
appraiser credentialing.\77\
---------------------------------------------------------------------------

    \77\ Id.
---------------------------------------------------------------------------

    7. Persons analyzing work product for USPAP compliance must be 
knowledgeable about appraisal practice and USPAP, and States must be 
able to document how such persons are so qualified.\78\
---------------------------------------------------------------------------

    \78\ Id.
---------------------------------------------------------------------------

    8. Experience time periods must conform to requirements set forth 
in the AQB Criteria for the credential sought.\79\
---------------------------------------------------------------------------

    \79\ Title XI Sec.  1118(a), 12 U.S.C. 3347; AQB Real Property 
Appraiser Qualification Criteria.
---------------------------------------------------------------------------

Examination
    1. States must ensure that an appropriate AQB-approved qualifying 
examination is administered for each of the federally recognized 
credentials requiring an examination.\80\
---------------------------------------------------------------------------

    \80\ Id.
---------------------------------------------------------------------------

Policy Statement 5

Reciprocity
A. Reciprocity Policy
    Title XI contemplates the reasonably free movement of certified and 
licensed appraisers across State lines. The ASC monitors Appraiser 
Programs for compliance with the reciprocity provision of Title XI as 
amended by the Dodd-Frank Act.\81\ Title XI requires that in order for 
a State's appraisers to be eligible to perform appraisals for federally 
related transactions, the State must have a policy in place for issuing 
reciprocal credentials IF:
---------------------------------------------------------------------------

    \81\ Title XI Sec.  1122(b), 12 U.S.C. 3351.
---------------------------------------------------------------------------

    a. The appraiser is coming from a State (Home State) that is ``in 
compliance'' with Title XI as determined by the ASC; AND
    b. (i) the appraiser holds a valid credential from the Home State; 
AND
    (ii) the credentialing requirements of the Home State \82\ meet or 
exceed those of the reciprocal credentialing State (Reciprocal 
State).\83\
---------------------------------------------------------------------------

    \82\ As they exist at the time of application for reciprocal 
credential.
    \83\ Id.
---------------------------------------------------------------------------

    An appraiser relying on a credential from a State that does not 
have such a policy in place may not perform appraisals for federally 
related transactions. A State may be more lenient in the issuance of 
reciprocal credentials by implementing a more open door policy. 
However, States cannot impose additional impediments to obtaining 
reciprocal credentials.
    For purposes of implementing the reciprocity policy, States with an 
ASC Finding \84\ of ``Poor'' do not satisfy the ``in compliance'' 
provision for reciprocity. Therefore, States are not required to 
recognize, for purposes of granting a reciprocal credential, the 
license or certification of an appraiser credentialed in a State with 
an ASC Finding of ``Poor.''
---------------------------------------------------------------------------

    \84\ See Appendix A, Compliance Review Process, for an 
explanation of ASC Findings.
---------------------------------------------------------------------------

B. Application of Reciprocity Policy
    The following examples illustrate application of reciprocity in a 
manner that complies with Title XI. The examples refer to the 
reciprocity policy requiring issuance of a reciprocal credential IF:
    a. The appraiser is coming from a State that is ``in compliance''; 
AND
    b. (i) the appraiser holds a valid credential from that State; AND
    (ii) the credentialing requirements of that State (as they 
currently exist) meet or exceed those of the reciprocal credentialing 
State (as they currently exist).
Example 1. Additional Requirements Imposed on Applicants
    State A requires that prior to issuing a reciprocal credential the 
applicant must certify that disciplinary proceedings are not pending 
against that applicant in any jurisdiction. Under b.(ii) above, if this 
requirement is not imposed on all of its own applicants for 
credentialing, STATE A cannot impose this requirement on applicants for 
reciprocal credentialing.
Example 2. Credentialing Requirements
    An appraiser is seeking a reciprocal credential in STATE A. The 
appraiser holds a valid credential in STATE Z, even though it was 
issued in 2007. This satisfies b.(i) above. However, in order to 
satisfy b.(ii), STATE A would evaluate STATE Z's credentialing 
requirements as they currently exist to determine whether they meet or 
exceed STATE A's current requirements for credentialing.
Example 3. Multiple State Credentials
    An appraiser credentialed in several States is seeking a reciprocal 
credential in State A. That appraiser's initial credentials were 
obtained through examination in the original credentialing State and 
through reciprocity in the additional States. State A requires the 
applicant to provide a ``letter of good standing'' from the State of 
original credentialing as a condition of granting a reciprocal 
credential. State A may not impose such a requirement since Title XI 
does not

[[Page 43976]]

distinguish between credentials obtained by examination and credentials 
obtained by reciprocity for purposes of granting reciprocal 
credentials.
C. Appraiser Compliance Requirements
    In order to maintain a credential granted by reciprocity, 
appraisers must comply with the credentialing State's policies, rules 
and statutes governing appraisers, including requirements for payment 
of certification and licensing fees, as well as continuing 
education.\85\
---------------------------------------------------------------------------

    \85\ A State may offer to accept continuing education (CE) for a 
renewal applicant who has satisfied CE requirements of a home State; 
however, a State may not impose this as a requirement for renewal, 
thereby imposing a requirement for the renewal applicant to retain a 
home State credential.
---------------------------------------------------------------------------

D. Well-Documented Application Files
    States must obtain and maintain sufficient relevant documentation 
pertaining to an application for issuance of a credential by 
reciprocity so as to enable understanding of the facts and 
determinations in the matter and the reasons for those determinations.
E. Summary of Requirements
    1. States must have a reciprocity policy in place for issuing a 
reciprocal credential to an appraiser from another State under the 
conditions specified in Title XI in order for the State's appraisers to 
be eligible to perform appraisals for federally related 
transactions.\86\
---------------------------------------------------------------------------

    \86\ Title XI Sec.  1122(b), 12 U.S.C. 3351.
---------------------------------------------------------------------------

    2. States may be more lenient in the issuance of reciprocal 
credentials by implementing a more open door policy; however, States 
may not impose additional impediments to issuance of reciprocal 
credentials.\87\
---------------------------------------------------------------------------

    \87\ Id.
---------------------------------------------------------------------------

    3. States must obtain and maintain sufficient relevant 
documentation pertaining to an application for issuance of a credential 
by reciprocity so as to enable understanding of the facts and 
determinations in the matter and the reasons for those 
determinations.\88\
---------------------------------------------------------------------------

    \88\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

Policy Statement 6

Education
    AQB Criteria sets forth minimum requirements for appraiser 
education courses. This Policy Statement addresses proper 
administration of education requirements for compliance with AQB 
Criteria. (For requirements concerning qualifying and continuing 
education in the application process, see Policy Statement 4, 
Application Process.)
A. Course Approval
    States must ensure that approved appraiser education courses are 
consistent with AQB Criteria and maintain sufficient documentation to 
support that approved appraiser education courses conform to AQB 
Criteria.
    States should ensure that course approval expiration dates assigned 
by the State coincide with the endorsement period assigned by the AQB's 
Course Approval Program or any other AQB-approved organization 
providing approval of course design and delivery. States may not 
continue to accept AQB approved courses after the AQB's expiration date 
unless the course content is reviewed and approved by the State.
    States should ensure that educational providers are afforded equal 
treatment in all respects.\89\
---------------------------------------------------------------------------

    \89\ For example:
    (1) Consent agreements requiring additional education should not 
specify a particular course provider when there are other providers 
on the State's approved course listing offering the same course; and
    (2) courses from professional organizations should not be 
automatically approved and/or approved in a manner that is less 
burdensome than the State's normal approval process.
---------------------------------------------------------------------------

    States are encouraged to accept courses approved by the AQB's 
Course Approval Program.
B. Distance Education
    States must ensure that distance education courses meet AQB 
Criteria and that the delivery mechanism for distance education courses 
offered by a non-academic provider, including secondary providers, has 
been approved by an AQB-approved organization providing approval of 
course design and delivery.
    States may not continue to accept courses after the AQB-approved 
organization's approval of course design and delivery date has expired.
C. Summary of Requirements
    1. States must ensure that appraiser education courses are 
consistent with AQB Criteria.\90\
---------------------------------------------------------------------------

    \90\ Title XI Sec.  1118(a), 12 U.S.C. 3347; AQB Real Property 
Appraiser Qualification Criteria.
---------------------------------------------------------------------------

    2. States must maintain sufficient documentation to support that 
approved appraiser courses conform to AQB Criteria.\91\
---------------------------------------------------------------------------

    \91\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    3. States must ensure the delivery mechanism for distance education 
courses offered by a non-academic provider, including secondary 
providers, has been approved by an AQB-approved organization providing 
approval of course design and delivery.\92\
---------------------------------------------------------------------------

    \92\ Title XI Sec.  1118(a), 12 U.S.C. 3347; AQB Real Property 
Appraiser Qualification Criteria.
---------------------------------------------------------------------------

Policy Statement 7

State Agency Enforcement
A. State Agency Regulatory Program
    Title XI requires the ASC to monitor the States for the purpose of 
determining whether the State processes complaints and completes 
investigations in a reasonable time period, appropriately disciplines 
sanctioned appraisers and maintains an effective regulatory 
program.\93\
---------------------------------------------------------------------------

    \93\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

B. Enforcement Process
    States must ensure that the system for processing and investigating 
complaints \94\ and sanctioning appraisers is administered in a timely, 
effective, consistent, equitable, and well-documented manner.
---------------------------------------------------------------------------

    \94\ See Appendix B, Glossary of Terms, for the definition of 
``complaint.''
---------------------------------------------------------------------------

1. Timely Enforcement
    States must process complaints of appraiser misconduct or 
wrongdoing in a timely manner to ensure effective supervision of 
appraisers, and when appropriate, that incompetent or unethical 
appraisers are not allowed to continue their appraisal practice. Absent 
special documented circumstances, final administrative decisions 
regarding complaints must occur within one year (12 months) of the 
complaint filing date. \95\ Special documented circumstances are those 
extenuating circumstances (fully documented) beyond the control of the 
State agency that delays normal processing of a complaint such as: 
complaints involving a criminal investigation by a law enforcement 
agency when the investigative agency requests that the State refrain 
from proceeding; final disposition that has been appealed to a higher 
court; documented medical condition of the respondent; ancillary civil 
litigation; and complex cases that involve multiple individuals and 
reports. Such special documented circumstances also include those 
periods when State rules require referral of a complaint to another 
State entity for review and the State agency is precluded from further 
processing of the complaint until it is returned. In that circumstance, 
the State agency should document the required referral and the

[[Page 43977]]

time period during which the complaint was not under its control or 
authority.
---------------------------------------------------------------------------

    \95\ The one-year period for resolution of complaints is not 
intended to have the impact of a statute of limitation or statute of 
repose.
---------------------------------------------------------------------------

2. Effective Enforcement
    Effective enforcement requires that States investigate allegations 
of appraiser misconduct or wrongdoing, and if allegations are proven, 
take appropriate disciplinary or remedial action. Dismissal of an 
alleged violation solely due to an ``absence of harm to the public'' is 
inconsistent with Title XI. Financial loss or the lack thereof is not 
an element in determining whether there is a violation. The extent of 
such loss, however, may be a factor in determining the appropriate 
level of discipline.
    Persons analyzing complaints for USPAP compliance must be 
knowledgeable about appraisal practice and USPAP and States must be 
able to document how such persons are so qualified.
    States must analyze each complaint to determine whether additional 
violations, especially those relating to USPAP, should be added to the 
complaint.
    Closure of a complaint based solely on a State's statute of 
limitations that results in dismissal of a complaint without the 
investigation of the merits of the complaint is inconsistent with the 
Title XI requirement that States assure effective supervision of the 
activities of credentialed appraisers.\96\
---------------------------------------------------------------------------

    \96\ Title XI Sec.  1117, 12 U.S.C. 3346.
---------------------------------------------------------------------------

3. Consistent and Equitable Enforcement
    Absent specific documented facts or considerations, substantially 
similar cases within a State should result in similar dispositions.
4. Well-Documented Enforcement
    States must obtain and maintain sufficient relevant documentation 
pertaining to a matter so as to enable understanding of the facts and 
determinations in the matter and the reasons for those determinations.
a. Complaint Files
    Complaint files must:
     Include documentation outlining the progress of the 
investigation;
     demonstrate that appraisal reports are analyzed and any 
USPAP violations are identified and considered, whether or not they 
were the subject of the complaint;
     include rationale for the final outcome of the case (i.e., 
dismissal or imposition of discipline);
     include documentation explaining any delay in processing, 
investigation or adjudication;
     contain documentation that all ordered or agreed upon 
discipline, such as probation, fine, or completion of education is 
tracked and that completion of all terms is confirmed; and
     be organized in a manner that allows understanding of the 
steps taken throughout the complaint, investigation, and adjudicatory 
process.
b. Complaint Logs
    States must track all complaints using a complaint log. The 
complaint log must record all complaints, regardless of their 
procedural status in the investigation and/or resolution process, 
including complaints pending before the State board, Office of the 
Attorney General, other law enforcement agencies, and/or offices of 
administrative hearings.
    The complaint log must include the following information (States 
are strongly encouraged to maintain this information in an electronic, 
sortable format):

1. Case number
2. Name of respondent
3. Actual date the complaint was received by the State
4. Source of complaint (e.g., consumer, lender, AMC, bank regulator, 
appraiser, hotline) or name of complainant
5. Current status of the complaint
6. Date the complaint was closed (e.g., final disposition by the 
administrative hearing agency, Office of the Attorney General, State 
Appraiser Regulatory Agency or Court of Appeals)
7. Method of disposition (e.g., dismissal, letter of warning, consent 
order, final order)
8. Terms of disposition (e.g., probation, fine, education, mentorship)
9. In the case of open complaints, the most recent activity and date 
thereof (e.g. respondent's response to complaint received, contacted 
Attorney General for a status update, Board voted to offer a consent 
agreement)
C. Summary of Requirements
    1. States must maintain relevant documentation to enable 
understanding of the facts and determinations in the matter and the 
reasons for those determinations.\97\
---------------------------------------------------------------------------

    \97\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    2. States must resolve all complaints filed against appraisers 
within one year (12 months) of the complaint filing date, except for 
special documented circumstances.\98\
---------------------------------------------------------------------------

    \98\ Id.
---------------------------------------------------------------------------

    3. States must ensure that the system for processing and 
investigating complaints and sanctioning appraisers is administered in 
an effective, consistent, equitable, and well-documented manner.\99\
---------------------------------------------------------------------------

    \99\ Id.
---------------------------------------------------------------------------

    4. States must track complaints of alleged appraiser misconduct or 
wrongdoing using a complaint log.\100\
---------------------------------------------------------------------------

    \100\ Id.
---------------------------------------------------------------------------

    5. States must appropriately document enforcement files and include 
rationale.\101\
---------------------------------------------------------------------------

    \101\ Id.
---------------------------------------------------------------------------

    6. States must regulate, supervise and discipline their 
credentialed appraisers.\102\
---------------------------------------------------------------------------

    \102\ Id.
---------------------------------------------------------------------------

    7. Persons analyzing complaints for USPAP compliance must be 
knowledgeable about appraisal practice and USPAP, and States must be 
able to document how such persons are so qualified.\103\
---------------------------------------------------------------------------

    \103\ Id.
---------------------------------------------------------------------------

Part B: AMC Program

Policy Statement 8

Statutes, Regulations, Policies and Procedures Governing State AMC 
Programs
A. Participating States and ASC Oversight
    States are not required to establish an AMC registration and 
supervision program. For those States electing to participate in the 
registration and supervision of AMCs (participating States), ASC staff 
will informally monitor the State's progress to implement the 
requirements of Title XI and the AMC Rule.\104\ Formal ASC oversight of 
State AMC Programs will begin at the next regularly scheduled 
Compliance Review of a State after the following occurs:
---------------------------------------------------------------------------

    \104\ Title XI Sec.  1103(a)(1)(B), 12 U.S.C. 3332. AMC Rule 
means the interagency final rule on minimum requirements for State 
registration and supervision of 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.
---------------------------------------------------------------------------

    1. A State decides to be a participating State pursuant to the AMC 
Rule;
    2. A State establishes an AMC program in accordance with the AMC 
Rule; and
    3. A State begins reporting to the National Registry of AMCs (AMC 
Registry).
    Formal ASC oversight will consist of evaluating AMC Programs in 
participating States during the Compliance Review process to determine 
compliance or lack thereof with Title XI, and to assess implementation 
of the minimum requirements for State registration and supervision of 
AMCs as established by

[[Page 43978]]

the AMC Rule. Upon expiration of the statutory implementation period 
(see Policy Statement 11, Statutory Implementation Period), Compliance 
Reviews will include ASC oversight of AMC Programs for any 
participating State.
B. Relation to State Law
    Participating States may establish requirements in addition to 
those in the AMC Rule.
    Participating States may also have a more expansive definition of 
AMCs.\105\ However, if a participating State has a more expansive 
definition of AMCs than in Title XI (thereby encompassing State 
regulation of AMCs that are not within the Title XI definition of AMC), 
the State must ensure such AMCs are identified as such in the State 
database, just as States currently do for non-federally recognized 
credentials or designations. Only those AMCs that meet the Federal 
definition of AMC will be eligible to be on the AMC Registry.
---------------------------------------------------------------------------

    \105\ 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.
---------------------------------------------------------------------------

C. Funding and Staffing
    The Dodd-Frank Act amended Title XI to require the ASC to determine 
whether participating States have sufficient funding and staffing to 
meet their Title XI requirements. Compliance with this provision 
requires that a State must provide its AMC Program with funding and 
staffing sufficient to carry out its Title XI-related duties. The ASC 
evaluates the sufficiency of funding and staffing as part of its review 
of all aspects of an AMC Program's effectiveness, including the 
adequacy of State boards, committees, or commissions responsible for 
carrying out Title XI-related duties.
D. Minimum Requirements for Registration and Supervision of AMCs as 
Established by the AMC Rule
1. AMC Registration and Supervision
    If a State chooses to participate in the registration and 
supervision of AMCs in accordance with the AMC Rule, the State will be 
required to comply with the minimum requirements set forth in the AMC 
Rule. States should refer to the AMC Rule for compliance requirements 
\106\ as this Policy Statement merely summarizes what the AMC Rule 
requires of participating States.
---------------------------------------------------------------------------

    \106\ See footnote 107.
---------------------------------------------------------------------------

    (a) The AMC Rule includes requirements for participating States to 
establish and maintain within the State appraiser certifying and 
licensing agency an AMC Program with the legal authority and mechanisms 
to:
    (1) Review and approve or deny AMC initial registration 
applications and/or renewals for registration;
    (2) Examine records of AMCs and require AMCs to submit information;
    (3) Verify that appraisers on AMCs' panels hold valid State 
credentials;
    (4) Conduct investigations of AMCs to assess potential violations 
of appraisal-related laws, regulations, or orders;
    (5) Discipline, suspend, terminate, or deny renewal of the 
registration of an AMC that violates appraisal-related laws, 
regulations, or orders; and
    (6) Report an AMC's violation of appraisal-related laws, 
regulations, or orders, as well as disciplinary and enforcement actions 
and other relevant information about an AMC's operations, to the ASC.
    (b) The AMC Rule includes requirements for participating States to 
impose requirements on AMCs that are not Federally regulated AMCs \107\ 
to:
---------------------------------------------------------------------------

    \107\ ``Federally regulated AMCs,'' meaning AMCs that are 
subsidiaries owned and controlled by an insured depository 
institution or an insured credit union and regulated by a Federal 
financial institutions regulatory agency, are not required to 
register with the State (Title XI Sec.  1124(c), 12 U.S.C. 3353(c)).
---------------------------------------------------------------------------

    (1) Register with and be subject to supervision by the State 
appraiser certifying and licensing agency;
    (2) Engage only State-certified or State-licensed appraisers for 
federally related transactions in conformity with any federally related 
transaction regulations;
    (3) 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;
    (4) Direct the appraiser to perform the assignment in accordance 
with USPAP; and
    (5) Establish and comply with processes and controls reasonably 
designed to ensure that the AMC conducts its appraisal management 
services in accordance with the requirements of section 129E(a) through 
(i) of the Truth in Lending Act, 15 U.S.C. 1639e(a) through (i), and 
regulations thereunder.
2. Ownership Limitations for State-Registered AMCs
A. Appraiser Certification or Licensing of Owners
    An AMC subject to State registration shall not be registered by a 
State or included on the AMC Registry if such AMC, in whole or in part, 
directly or indirectly, is owned by any person who has had an appraiser 
license or certificate refused, denied, cancelled, surrendered in lieu 
of revocation, or revoked in any State for a substantive cause,\108\ as 
determined by the State appraiser certifying and licensing agency. A 
State's process for review could, for example, be by questionnaire, or 
affidavit, or background screening, or otherwise. States must document 
to the file the State's method of review and the result.
---------------------------------------------------------------------------

    \108\ An AMC subject to State registration is not barred from 
being registered by a State or included on the AMC Registry of AMCs 
if the license or certificate of the appraiser with an ownership 
interest was not revoked for a substantive cause and has been 
reinstated by the State or States in which the appraiser was 
licensed or certified. (12 CFR 34.210-34.216; 12 CFR 225.190-
225.196; 12 CFR 323.8-323.14; 12 CFR 1222.20-1222.26.)
---------------------------------------------------------------------------

B. Good Moral Character of Owners
    An AMC shall not be registered by a State if any person that owns 
more than 10 percent of the AMC--
    (1) Is determined by the State not to have good moral character; or
    (2) Fails to submit to a background investigation carried out by 
the State.
    A State's process for review could, for example, be by 
questionnaire, or affidavit, or background screening, or otherwise. The 
ASC would expect written documentation of the State's method of review 
and the result.
3. Requirements for Federally Regulated AMCs
    Participating States are not required to identify Federally 
regulated AMCs \109\ operating in their States, but rather the Federal 
financial institution regulatory agencies are responsible for requiring 
such AMCs to identify themselves to participating States and report 
required information.
---------------------------------------------------------------------------

    \109\ See footnote 107.
---------------------------------------------------------------------------

    A Federally regulated AMC shall not be included on the AMC Registry 
if such AMC, in whole or in part, directly or indirectly, is owned by 
any person who

[[Page 43979]]

has had an appraiser license or certificate refused, denied, cancelled, 
surrendered in lieu of revocation, or revoked in any State for a 
substantive cause, as determined by the ASC.
E. Summary of Requirements
    1. Participating States must establish and maintain an AMC Program 
with the legal authority and mechanisms consistent with the AMC 
Rule.\110\
---------------------------------------------------------------------------

    \110\ 12 CFR 34.210-34.216; 12 CFR 225.190-225.196; 12 CFR 
323.8-323.14; 12 CFR 1222.20-1222.26.
---------------------------------------------------------------------------

    2. Participating States must impose requirements on AMCs consistent 
with the AMC Rule.\111\
---------------------------------------------------------------------------

    \111\ Id.
---------------------------------------------------------------------------

    3. Participating States must enforce and document ownership 
limitations for State-registered AMCs.\112\
---------------------------------------------------------------------------

    \112\ Id.
---------------------------------------------------------------------------

    4. Only those AMCs that meet the Federal definition of AMC will be 
eligible to be on the AMC Registry. Therefore, participating States 
that have a more expansive definition of AMCs than in the AMC Rule must 
ensure such non-Federally recognized AMCs are identified as such in the 
State database.\113\
---------------------------------------------------------------------------

    \113\ Title XI Sec.  1118(b), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    5. States must have funding and staffing sufficient to carry out 
their Title XI-related duties.\114\
---------------------------------------------------------------------------

    \114\ Id.
---------------------------------------------------------------------------

Policy Statement 9

National Registry of AMCs (AMC Registry)
A. Requirements for the AMC Registry
    Title XI requires the ASC to maintain the AMC Registry of AMCs that 
are either registered with and subject to supervision of a 
participating State or are operating subsidiaries of a Federally 
regulated financial institution.\115\ Title XI further requires the 
States to transmit to the ASC: (1) Reports on a timely basis of 
supervisory activities involving AMCs, including investigations 
resulting in disciplinary action being taken; and (2) the registry fee 
as set by the ASC \116\ from AMCs that are either registered with a 
participating State or are Federally regulated AMCs.\117\
---------------------------------------------------------------------------

    \115\ Title XI Sec.  1103(a)(6), 12 U.S.C. 3332.
    \116\ Title XI Sec.  1109(a)(4), 12 U.S.C. 3338.
    \117\ Title XI Sec.  1109(a)(3) and (4), 12 U.S.C. 3338.
---------------------------------------------------------------------------

    As with appraiser registry fees, Title XI, Sec.  1109(a)(4)(b) 
requires the AMC registry fee to be collected by each participating 
State and transmitted to the ASC. Therefore, as with appraisers, an AMC 
will pay a registry fee in each participating State in which the AMC 
operates. As with appraisers, an AMC operating in multiple 
participating States will pay a registry fee in multiple States in 
order to be on the AMC Registry for each State.
    States must notify the ASC as soon as practicable if an AMC listed 
on the AMC Registry is no longer registered with or operating in the 
State. The ASC extranet application allows States to update their AMC 
information directly to the AMC Registry.
B. Registry Fee and Invoicing Policies
    Each State must remit to the ASC the annual registry fee, as set by 
the ASC, for AMCs to be listed on the AMC Registry. Requests to prorate 
refunds or partial-year registrations will not be granted. If a State 
collects multiple-year fees for multiple-years, the State may choose to 
remit to the ASC the total amount of the multiple-year registry fees or 
the equivalent annual fee amount. The ASC will, however, record AMCs on 
the AMC Registry only for the number of years for which the ASC has 
received payment. States must reconcile and pay registry invoices in a 
timely manner (45 calendar days after receipt of the invoice).
C. Reporting Requirements
    State agencies must report all disciplinary action \118\ taken 
against an AMC to the ASC via the extranet application within 5 
business days after the disciplinary action is final, as determined by 
State law. States not reporting via the extranet application must 
provide, in writing to the ASC, a description of the circumstances 
preventing compliance with this requirement. For the most serious 
disciplinary actions (e.g., any action that interrupts an AMCs ability 
to provide appraisal management services), the AMCs status must be 
changed on the AMC Registry to ``inactive.'' A Federally regulated AMC 
operating in a State must report to the State the information required 
to be submitted by the State to the ASC, pursuant to the ASC's policies 
regarding the determination of the AMC Registry fee.
---------------------------------------------------------------------------

    \118\ See Appendix B, Glossary of Terms, for the definition of 
``disciplinary action.''
---------------------------------------------------------------------------

D. Access to AMC Registry Data
    The ASC Web site provides free access to the public portion of the 
AMC Registry at www.asc.gov. The public portion of the AMC Registry 
data may be downloaded using predefined queries or user-customized 
applications.
    Access to the full database, which includes non-public data (e.g., 
certain disciplinary action information), is restricted to authorized 
State and Federal regulatory agencies. States must designate a senior 
official, such as an executive director, to serve as the State's 
Authorized Registry Official, and provide to the ASC, in writing, 
information regarding the designated Authorized Registry Official. 
States must ensure that the authorization information provided to the 
ASC is updated and accurate. States must adopt and implement a written 
policy to protect the right of access, as well as the ASC issued User 
Name and Password.
E. Summary of Requirements
    1. States must reconcile and pay registry invoices in a timely 
manner (45 calendar days after receipt of the invoice).\119\
---------------------------------------------------------------------------

    \119\ Title XI Sec.  1118(a), 12 U.S.C. 3347; Title XI Sec.  
1109(a), 12 U.S.C. 3338.
---------------------------------------------------------------------------

    2. State agencies must report all disciplinary action taken against 
an AMC to the ASC via the extranet application within 5 business days 
after the disciplinary action is final, as determined by State 
law.\120\
---------------------------------------------------------------------------

    \120\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    3. States not reporting via the extranet application must provide, 
in writing to the ASC, a description of the circumstances preventing 
compliance with this requirement.\121\
---------------------------------------------------------------------------

    \121\ Id.
---------------------------------------------------------------------------

    4. For the most serious disciplinary actions (e.g., any action that 
interrupts an AMC's ability to provide appraisal management services), 
the AMC's status must be changed on the AMC Registry to ``inactive.'' 
\122\
---------------------------------------------------------------------------

    \122\ Id.
---------------------------------------------------------------------------

    5. States must notify the ASC as soon as practicable if an AMC 
listed on the AMC Registry is no longer registered with or operating in 
the State.
    6. States must designate a senior official, such as an executive 
director, who will serve as the State's Authorized Registry Official, 
and provide to the ASC, in writing, information regarding the selected 
Authorized Registry Official, and any individual(s) authorized to act 
on their behalf.\123\
---------------------------------------------------------------------------

    \123\ Id.
---------------------------------------------------------------------------

    7. States must adopt and implement a written policy to protect the 
right of access to the AMC Registry, as well as the ASC issued User 
Name and Password.\124\
---------------------------------------------------------------------------

    \124\ Id.
---------------------------------------------------------------------------

    8. States must ensure the accuracy of all data submitted to the AMC 
Registry.\125\
---------------------------------------------------------------------------

    \125\ Id.

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[[Page 43980]]

Policy Statement 10

State Agency Enforcement
A. State Agency Regulatory Program
    Title XI requires the ASC to monitor the States for the purpose of 
determining whether the State processes complaints and completes 
investigations in a reasonable time period, appropriately disciplines 
sanctioned AMCs and maintains an effective regulatory program.\126\
---------------------------------------------------------------------------

    \126\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

B. Enforcement Process
    States must ensure that the system for processing and investigating 
complaints \127\ and sanctioning AMCs is administered in a timely, 
effective, consistent, equitable, and well-documented \128\ manner.
---------------------------------------------------------------------------

    \127\ See Appendix B, Glossary of Terms, for the definition of 
``complaint.''
    \128\ See Appendix B, Glossary of Terms, for the definition of 
``well-documented.''
---------------------------------------------------------------------------

1. Timely Enforcement
    States must process complaints against AMCs in a timely manner to 
ensure effective supervision of AMCs. Absent special documented 
circumstances, final administrative decisions regarding complaints must 
occur within one year (12 months) of the complaint filing date. Special 
documented circumstances are those extenuating circumstances (fully 
documented) beyond the control of the State agency that delays normal 
processing of a complaint such as: Complaints involving a criminal 
investigation by a law enforcement agency when the investigative agency 
requests that the State refrain from proceeding; final disposition that 
has been appealed to a higher court; documented medical condition of 
the respondent; ancillary civil litigation; and complex fraud cases 
that involve multiple individuals and reports. Such special documented 
circumstances also include those periods when State rules require 
referral of a complaint to another State entity for review and the 
State agency is precluded from further processing of the complaint 
until it is returned. In that circumstance, the State agency should 
document the required referral and the time period during which the 
complaint was not under its control or authority.
2. Effective Enforcement
    Effective enforcement requires that States investigate complaints, 
and if allegations are proven, take appropriate disciplinary or 
remedial action.
3. Consistent and Equitable Enforcement
    Absent specific documented facts or considerations, substantially 
similar cases within a State should result in similar dispositions.
4. Well-Documented Enforcement
    States must obtain and maintain sufficient relevant documentation 
pertaining to a matter so as to enable understanding of the facts and 
determinations in the matter and the reasons for those determinations.
a. Complaint Files
    Complaint files must:
     Include documentation outlining the progress of the 
investigation;
     include rationale for the final outcome of the case (i.e., 
dismissal or imposition of discipline);
     include documentation explaining any delay in processing, 
investigation or adjudication;
     contain documentation that all ordered or agreed upon 
discipline is tracked and that completion of all terms is confirmed; 
and
     be organized in a manner that allows understanding of the 
steps taken throughout the complaint, investigation, and adjudicatory 
process.
b. Complaint Logs
    States must track all complaints using a complaint log. The 
complaint log must record all complaints, regardless of their 
procedural status in the investigation and/or resolution process, 
including complaints pending before the State board, Office of the 
Attorney General, other law enforcement agencies, and/or offices of 
administrative hearings. The complaint log must include the following 
information (States are strongly encouraged to maintain this 
information in an electronic, sortable format):

1. Case number
2. Name of respondent
3. Actual date the complaint was received by the State
4. Source of complaint (e.g., consumer, lender, AMC, bank regulator, 
appraiser, hotline) or name of complainant
5. Current status of the complaint
6. Date the complaint was closed (e.g., final disposition by the 
administrative hearing agency, Office of the Attorney General, State 
AMC Program or Court of Appeals)
7. Method of disposition (e.g., dismissal, letter of warning, consent 
order, final order)
8. Terms of disposition (e.g., probation, fine)
9. In the case of open complaints, the most recent activity and date 
thereof (e.g. respondent's response to complaint received, contacted 
Attorney General for a status update, Board voted to offer a consent 
agreement)
C. Summary of Requirements
    1. States must maintain relevant documentation to enable 
understanding of the facts and determinations in the matter and the 
reasons for those determinations.\129\
---------------------------------------------------------------------------

    \129\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

    2. States must resolve all complaints filed against appraisers 
within one year (12 months) of the complaint filing date, except for 
special documented circumstances.\130\
---------------------------------------------------------------------------

    \130\ Id.
---------------------------------------------------------------------------

    3. States must ensure that the system for processing and 
investigating complaints and sanctioning AMCs is administered in an 
effective, consistent, equitable, and well-documented manner.\131\
---------------------------------------------------------------------------

    \131\ Id.
---------------------------------------------------------------------------

    4. States must track complaints of alleged appraiser misconduct or 
wrongdoing using a complaint log.\132\
---------------------------------------------------------------------------

    \132\ Id.
---------------------------------------------------------------------------

    5. States must appropriately document enforcement files and include 
rationale.\133\
---------------------------------------------------------------------------

    \133\ Id.
---------------------------------------------------------------------------

Policy Statement 11

Statutory Implementation Period
    Title XI and the AMC Rule set forth the statutory implementation 
period.\134\ The AMC Rule was effective on August 10, 2015. As of 36 
months from that date (August 10, 2018), an AMC may not provide 
appraisal management services for a federally related transaction in a 
non-participating State unless the AMC is a Federally regulated AMC. 
Appraisal management services may still be provided for federally 
related transactions in non-participating States by individual 
appraisers, by AMCs that are below the minimum statutory panel size 
threshold, and as noted, by Federally regulated AMCs.
---------------------------------------------------------------------------

    \134\ Title XI Sec.  1124(f)(1), 12 U.S.C. 3353 and 12 CFR 
34.210-34.216; 12 CFR 225.190-225.196; 12 CFR 323.8-323.14; 12 CFR 
1222.20-1222.26.
---------------------------------------------------------------------------

    The ASC, with the approval of the Federal Financial Institutions 
Examination Council (FFIEC), may extend this statutory implementation 
period for an additional 12 months if the ASC makes a finding that a 
State has made substantial progress toward implementing a registration 
and supervision program for AMCs that meets the standards of Title 
XI.\135\
---------------------------------------------------------------------------

    \135\ Title XI Sec.  1124(f)(2), 12 U.S.C. 3353.

---------------------------------------------------------------------------

[[Page 43981]]

Part C: Interim Sanctions

Policy Statement 12

Interim Sanctions
A. Authority
    Title XI grants the ASC authority to impose sanctions on a State 
that fails to have an effective Appraiser or AMC Program.\136\ The ASC 
may remove a State credentialed appraiser or a registered AMC from the 
Appraiser or AMC Registry on an interim basis, not to exceed 90 days, 
pending State agency action on licensing, certification, registration 
and disciplinary proceedings as an alternative to or in advance of a 
non-recognition proceeding.\137\ In determining whether an Appraiser or 
AMC Program is effective, the ASC shall conduct an analysis as required 
by Title XI. An ASC Finding of Poor on the Compliance Review Report 
\138\ issued to a State at the conclusion of an ASC Compliance Review 
may trigger an analysis by the ASC for potential interim sanction(s). 
The following provisions apply to the exercise by the ASC of its 
authority to impose interim sanction(s) on State agencies.
---------------------------------------------------------------------------

    \136\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
    \137\ Id.
    \138\ See Appendix A--Compliance Review Process.
---------------------------------------------------------------------------

B. Opportunity To Be Heard or Correct Conditions
    The ASC shall provide the State agency with:
    1. Written notice of intention to impose an interim sanction; and
    2. opportunity to respond or to correct the conditions causing such 
notice to the State.
    Notice and opportunity to respond or correct the conditions shall 
be in accordance with section C, Procedures.
C. Procedures
    This section prescribes the ASC's procedures which will be followed 
in arriving at a decision by the ASC to impose an interim sanction 
against a State agency.
1. Notice
    The ASC shall provide a written Notice of intention to impose an 
interim sanction (Notice) to the State agency. The Notice shall contain 
the ASC's analysis as required by Title XI of the State's licensing and 
certification of appraisers, the registration of AMCs, the issuance of 
temporary licenses and certifications for appraisers, the receiving and 
tracking of submitted complaints against appraisers and AMCs, the 
investigation of complaints, and enforcement actions against appraisers 
and AMCs.\139\ The ASC shall verify the State's date of receipt, and 
publish both the Notice and the State's date of receipt in the Federal 
Register.
---------------------------------------------------------------------------

    \139\ Title XI Sec.  1118(a), 12 U.S.C. 3347.
---------------------------------------------------------------------------

2. State Agency Response
    Within 15 days of receipt of the Notice, the State may submit a 
response to the ASC's Executive Director. Alternatively, a State may 
submit a Notice Not to Contest with the ASC's Executive Director. The 
filing of a Notice Not to Contest shall not constitute a waiver of the 
right to a judicial review of the ASC's decision, findings and 
conclusions. Failure to file a Response within 15 days shall constitute 
authorization for the ASC to find the facts to be as presented in the 
Notice and analysis. The ASC, for good cause shown, may permit the 
filing of a Response after the prescribed time.
3. Briefs, Memoranda and Statements
    Within 45 days after the date of receipt by the State agency of the 
Notice as published in the Federal Register, the State agency may file 
with the ASC's Executive Director a written brief, memorandum or other 
statement providing factual data and policy and legal arguments 
regarding the matters set out in the Notice and analysis.
4. Oral Presentations to the ASC
    Within 45 days after the date of receipt by the State agency of the 
Notice as published in the Federal Register, the State may file a 
request with the ASC's Executive Director to make oral presentation to 
the ASC. If the State has filed a request for oral presentation, the 
matter shall be heard within 45 days. An oral presentation shall be 
considered as an opportunity to offer, emphasize and clarify the facts, 
policies and laws concerning the proceeding, and is not a Meeting \140\ 
of the ASC. On the appropriate date and time, the State agency will 
make the oral presentation before the ASC. Any ASC member may ask 
pertinent questions relating to the content of the oral presentation. 
Oral presentations will not be recorded or otherwise transcribed. 
Summary notes will be taken by ASC staff and made part of the record on 
which the ASC shall decide the matter.
---------------------------------------------------------------------------

    \140\ The proceeding is more in the nature of a Briefing not 
subject to open meeting requirements. The presentation is an 
opportunity for the State to brief the ASC--to offer, emphasize and 
clarify the facts, policies and laws concerning the proceeding, and 
for the ASC members to ask questions. Additional consideration is 
given to the fact that this stage of the proceeding is pre-
decisional.
---------------------------------------------------------------------------

5. Conduct of Interim Sanction Proceedings
(a) Written Submissions
    All aspects of the proceeding shall be conducted by written 
submissions, with the exception of oral presentations allowed under 
subsection 4 above.
(b) Disqualification
    An ASC member who deems himself or herself disqualified may at any 
time withdraw. Upon receipt of a timely and sufficient affidavit of 
personal bias or disqualification of such member, the ASC will rule on 
the matter as a part of the record.
(c) Authority of ASC Chairperson
    The Chairperson of the ASC, in consultation with other members of 
the ASC whenever appropriate, shall have complete charge of the 
proceeding and shall have the duty to conduct it in a fair and 
impartial manner and to take all necessary action to avoid delay in the 
disposition of proceedings.
(d) Rules of Evidence
    Except as is otherwise set forth in this section, relevant material 
and reliable evidence that is not unduly repetitive is admissible to 
the fullest extent authorized by the Administrative Procedure Act (5 
U.S.C. 551-559) and other applicable law.
6. Decision of the ASC and Judicial Review
    Within 90 days after the date of receipt by the State agency of the 
Notice as published in the Federal Register, or in the case of oral 
presentation having been granted, within 30 days after presentation, 
the ASC shall issue a final decision, findings and conclusions and 
shall publish the decision promptly in the Federal Register. The final 
decision shall be effective on issuance. The ASC's Executive Director 
shall ensure prompt circulation of the decision to the State agency. A 
final decision of the ASC is a prerequisite to seeking judicial review.
7. Computing Time
    Time computation is based on business days. The date of the act, 
event or default from which the designated period of time begins to run 
is not included. The last day is included unless it is a Saturday, 
Sunday, or Federal holiday, in which case the period runs until the end 
of the next day which is not a Saturday, Sunday or Federal holiday.
8. Documents and Exhibits
    Unless otherwise provided by statute, all documents, papers and 
exhibits filed

[[Page 43982]]

in connection with any proceeding, other than those that may be 
withheld from disclosure under applicable law, shall be placed by the 
ASC's Executive Director in the proceeding's file and will be available 
for public inspection and copying.
9. Judicial Review
    A decision of the ASC under this section shall be subject to 
judicial review. The form of proceeding for judicial review may include 
any applicable form of legal action, including actions for declaratory 
judgments or writs of prohibitory or mandatory injunction in a court of 
competent jurisdiction.\141\
---------------------------------------------------------------------------

    \141\ 5 U.S.C. 703--Form and venue of proceeding.
---------------------------------------------------------------------------

Appendices

Appendix A--Compliance Review Process

    The ASC monitors State Appraiser and AMC Programs for compliance 
with Title XI. The monitoring of State Programs is largely 
accomplished through on-site visits known as a Compliance Review 
(Review). A Review is conducted over a two- to four-day period, and 
is scheduled to coincide with a meeting of the Program's decision-
making body whenever possible. ASC staff reviews the Appraiser 
Program and the seven compliance areas addressed in Policy 
Statements 1 through 7. ASC staff reviews a participating State's 
AMC Program and the four compliance areas addressed in Policy 
Statements 8 through 11. Sufficient documentation demonstrating 
compliance must be maintained by a State and made available for 
inspection during the Review. ASC staff reviews a sampling of 
documentation in each of the compliance areas. The sampling is 
intended to be representative of a State Program in its entirety.
    Based on the Review, ASC staff provides the State with an ASC 
staff report for the Appraiser Program, and if applicable, an ASC 
staff report for the AMC Program, detailing preliminary findings. 
The State is given 60 days to respond to the ASC staff report(s). At 
the conclusion of the Review, a Compliance Review Report (Report) is 
issued to the State for the Appraiser Program, and if applicable, a 
Report is also issued for the AMC Program, with the ASC Finding on 
each Program's overall compliance, or lack thereof, with Title XI. 
Deficiencies resulting in non-compliance in any of the compliance 
areas are cited in the Report. ``Areas of Concern'' which 
potentially expose a Program to compliance issues in the future are 
also addressed in the Report. The ASC's final disposition is based 
upon the ASC staff report, the State's response and staff's 
recommendation.
    The following chart provides an explanation of the ASC Findings 
and rating criteria for each ASC Finding category. The ASC Finding 
places particular emphasis on whether the State is maintaining an 
effective regulatory Program in compliance with Title XI.

----------------------------------------------------------------------------------------------------------------
                                                                                         Review Cycle (program
                                                                                         history or nature of
               ASC finding                              Rating criteria                deficiency may warrant a
                                                                                        more accelerated Review
                                                                                                Cycle)
----------------------------------------------------------------------------------------------------------------
Excellent...............................   State meets all Title XI mandates  2-year.
                                           and complies with requirements of ASC
                                           Policy Statements.
                                           State maintains a strong
                                           regulatory Program.
                                           Very low risk of Program failure.
Good....................................   State meets the majority of Title  2-year.
                                           XI mandates and complies with the
                                           majority of ASC Policy Statement
                                           requirements.
                                           Deficiencies are minor in nature.
                                           State is adequately addressing
                                           deficiencies identified and correcting
                                           them in the normal course of business.
                                           State maintains an effective
                                           regulatory Program.
                                           Low risk of Program failure......
Needs Improvement.......................   State does not meet all Title XI   2-year with additional
                                           mandates and does not comply with all       monitoring.
                                           requirements of ASC Policy Statements.
                                           Deficiencies are material but
                                           manageable and if not corrected in a
                                           timely manner pose a potential risk to
                                           the Program.
                                           State may have a history of
                                           repeated deficiencies but is showing
                                           progress toward correcting deficiencies.
                                           State regulatory Program needs
                                           improvement.
                                           Moderate risk of Program failure.
Not Satisfactory........................   State does not meet all Title XI   1-year.
                                           mandates and does not comply with all
                                           requirements of ASC Policy Statements.
                                           Deficiencies present a
                                           significant risk and if not corrected in
                                           a timely manner pose a well-defined risk
                                           to the Program.
                                           State may have a history of
                                           repeated deficiencies and requires more
                                           supervision to ensure corrective actions
                                           are progressing.
                                           State regulatory Program has
                                           substantial deficiencies.
                                           Substantial risk of Program
                                           failure.
Poor \142\..............................   State does not meet Title XI       Continuous monitoring.
                                           mandates and does not comply with
                                           requirements of ASC Policy Statements.
                                           Deficiencies are significant and
                                           severe, require immediate attention and
                                           if not corrected represent critical flaws
                                           in the Program.
                                           State may have a history of
                                           repeated deficiencies and may show a lack
                                           of willingness or ability to correct
                                           deficiencies.
                                           High risk of Program failure.....
----------------------------------------------------------------------------------------------------------------

    The ASC has two primary Review Cycles: Two-year and one-year. 
Most States are scheduled on a two-year Review Cycle. States may be 
moved to a one-year Review Cycle if the ASC determines more frequent 
on-site Reviews are needed to ensure that the State

[[Page 43983]]

maintains an effective Program. Generally, States are placed on a 
one-year Review Cycle because of non-compliance issues or serious 
areas of concerns that warrant more frequent on-site visits. Both 
two-year and one-year Review Cycles include a review of all aspects 
of the State's Program.
---------------------------------------------------------------------------

    \142\ An ASC Finding of ``Poor'' may result in significant 
consequences to the State. See Policy Statement 5, Reciprocity; see 
also Policy Statement 12, Interim Sanctions.
---------------------------------------------------------------------------

    The ASC may conduct Follow-up Reviews and additional monitoring. 
A Follow-up Review focuses only on specific areas identified during 
the previous on-site Review. Follow-up Reviews usually occur within 
6-12 months of the previous Review. In addition, as a risk 
management tool, ASC staff identifies State Programs that may have a 
significant impact on the nation's appraiser regulatory system in 
the event of Title XI compliance issues. For States that represent a 
significant percentage of the credentials on the Appraiser Registry, 
ASC staff performs annual on-site Priority Contact visits. The 
primary purpose of the Priority Contact visit is to review topical 
issues, evaluate regulatory compliance issues, and maintain a close 
working relationship with the State. This is not a complete Review 
of the Program. The ASC will also schedule a Priority Contact visit 
for a State when a specific concern is identified that requires 
special attention. Additional monitoring may be required where a 
deficiency is identified and reports on required or agreed upon 
corrective actions are required monthly or quarterly. Additional 
monitoring may include on-site monitoring as well as off-site 
monitoring.

Appendix B--Glossary of Terms

    Appraisal management company (AMC): Refers to, in connection 
with valuing properties collateralizing mortgage loans or mortgages 
incorporated into a securitization, any external third party 
authorized either by a creditor of a consumer credit transaction 
secured by a consumer's principal dwelling or by an underwriter of 
or other principal in the secondary mortgage markets, that oversees 
a network or panel of more than 15 certified or licensed appraisers 
in a State or 25 or more nationally within a given year--
    (A) To recruit, select, and retain appraisers;
    (B) to contract with licensed and certified appraisers to 
perform appraisal assignments;
    (C) to manage the process of having an appraisal performed, 
including providing administrative duties such as receiving 
appraisal orders and appraisal reports, submitting completed 
appraisal reports to creditors and underwriters, collecting fees 
from creditors and underwriters for services provided, and 
reimbursing appraisers for services performed; or
    (D) to review and verify the work of appraisers.
    AQB Criteria: Refers to the Real Property Appraiser 
Qualification Criteria as established by the Appraiser 
Qualifications Board of the Appraisal Foundation setting forth 
minimum education, experience and examination requirements for the 
licensure and certification of real property appraisers, and minimum 
requirements for ``Trainee'' and ``Supervisory'' appraisers.
    Assignment: As referenced herein, for purposes of temporary 
practice, ``assignment'' means one or more real estate appraisals 
and written appraisal report(s) covered by a single contractual 
agreement.
    Complaint: As referenced herein, any document filed with, 
received by, or serving as the basis for possible inquiry by the 
State agency regarding alleged violation of Title XI, Federal or 
State law or regulation, or USPAP by a credentialed appraiser or 
appraiser applicant, for allegations of unlicensed appraisal 
activity, or complaints involving AMCs. A complaint may be in the 
form of a referral, letter of inquiry, or other document alleging 
misconduct or wrongdoing.
    Credentialed appraisers: Refers to State licensed, certified 
residential or certified general appraiser classifications.
    Disciplinary action: As referenced herein, corrective or 
punitive action taken by or on behalf of a State agency which may be 
formal or informal, or may be consensual or involuntary, resulting 
in any of the following:

a. Revocation of credential or registration
b. suspension of credential or registration
c. written consent agreements, orders or reprimands
d. probation or any other restriction on the use of a credential
e. fine
f. voluntary surrender \143\
---------------------------------------------------------------------------

    \143\ A voluntary surrender that is not deemed disciplinary by 
State law or regulation, or is not related to any disciplinary 
process need not be reported as discipline provided the individual's 
Appraiser Registry record is updated to show the credential is 
inactive.
---------------------------------------------------------------------------

g. other acts as defined by State statute or regulation as 
disciplinary

    With the exception of voluntary surrender, suspension or 
revocation, such action may be exempt from reporting to the National 
Registry if defined by State statute, regulation or written policy 
as ``non-disciplinary.''
    Federally related transaction: Refers to any real estate related 
financial transaction which:
    (a) A federal financial institutions regulatory agency engages 
in, contracts for, or regulates; and
    (b) requires the services of an appraiser. (See Title XI Sec.  
1121(4), 12 U.S.C. 3350.)
    Federal financial institutions regulatory agencies: Refers to 
the Board of Governors of the Federal Reserve System, the Federal 
Deposit Insurance Corporation, the Office of the Comptroller of the 
Currency, and the National Credit Union Administration. (See Title 
XI Sec.  1121(6), 12 U.S.C. 3350.)
    Home State agency: As referenced herein, State agency or 
agencies that grant an appraiser a licensed or certified credential. 
Residency in the home State is not required. Appraisers may have 
more than one home State agency.
    Non-federally recognized credentials or designations: Refers to 
any State appraiser credential or designation other than trainee, 
State licensed, certified residential or certified general 
classifications as defined in Policy Statement 1, and which is not 
recognized by Title XI.
    Real estate related financial transaction: Any transaction 
involving:
    (a) the sale, lease, purchase, investment in or exchange of real 
property, including interests in property, or the financing thereof;
    (b) the refinancing of real property or interests in real 
property; and
    (c) the use of real property or interests in property as 
security for a loan or investment, including mortgage-backed 
securities. (See Title XI Sec.  1121(5), 12 U.S.C. 3350.)
    State: Any State, the District of Columbia, the Commonwealth of 
Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, 
and the United States Virgin Islands. (American Samoa does not have 
a Program.)
    State board: As referenced herein, ``State board'' means a group 
of individuals (usually appraisers, AMC representatives, bankers, 
consumers, and/or real estate professionals) appointed by the 
Governor or a similarly positioned State official to assist or 
oversee State Programs. A State agency may be headed by a board, 
commission or an individual.
    Uniform Standards of Professional Appraisal Practice (USPAP): 
Refers to appraisal standards promulgated by the Appraisal Standards 
Board of the Appraisal Foundation establishing minimum requirements 
for development and reporting of appraisals, including real property 
appraisal. Title XI requires appraisals prepared by State certified 
and licensed appraisers to be performed in conformance with USPAP.
    Well-documented: Means that States obtain and maintain 
sufficient relevant documentation pertaining to a matter so as to 
enable understanding of the facts and determinations in the matter 
and the reasons for those determinations.
* * * * *

    By the Appraisal Subcommittee.

    Dated: September 13, 2017.
Arthur Lindo,
Chairman.

[FR Doc. 2017-19998 Filed 9-19-17; 8:45 am]
 BILLING CODE 6700-01-P



                                                43966                    Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices

                                                CONTACT PERSON FOR MORE INFORMATION:                    information on using Regulations.gov,                 of 1989, as amended (Title XI),
                                                Judith Ingram, Press Officer, Telephone:                including instructions for submitting                 established the ASC.1 The purpose of
                                                (202) 694–1220.                                         public comments.                                      Title XI is to provide protection of
                                                                                                           • E-Mail: webmaster@asc.gov. Include               Federal financial and public policy
                                                Dayna C. Brown,
                                                                                                        the docket number in the subject line of              interests by upholding Title XI
                                                Secretary and Clerk of the Commission.                  the message.                                          requirements for appraisals performed
                                                [FR Doc. 2017–20098 Filed 9–18–17; 11:15 am]               • Fax: (202) 289–4101. Include                     for federally related transactions.2
                                                BILLING CODE 6715–01–P                                  docket number on fax cover sheet.                     Pursuant to Title XI, one of the ASC’s
                                                                                                           • Mail: Address to Appraisal                       core functions is to monitor the
                                                                                                        Subcommittee, Attn: Lori Schuster,                    requirements established by the States 3
                                                FEDERAL FINANCIAL INSTITUTIONS                          Management and Program Analyst, 1401                  for certification and licensing of
                                                EXAMINATION COUNCIL                                     H Street NW., Suite 760, Washington,                  appraisers qualified to perform
                                                                                                        DC 20005.                                             appraisals in connection with federally
                                                [Docket No. AS17–06]
                                                                                                           • Hand Delivery/Courier: 1401 H                    related transactions. This is
                                                Appraisal Subcommittee; Proposed                        Street NW., Suite 760, Washington, DC                 accomplished through periodic ASC
                                                Revised Policy Statements                               20005.                                                Compliance Reviews of each State
                                                                                                           In general, the ASC will enter all                 appraiser regulatory program (Appraiser
                                                AGENCY:  Appraisal Subcommittee of the                  comments received into the docket and                 Program) to determine compliance or
                                                Federal Financial Institutions                          publish those comments on the Federal                 lack thereof with Title XI, and to assess
                                                Examination Council.                                    eRulemaking (Regulations.gov) Web site                implementation of minimum
                                                ACTION: Proposed Revised Policy                         without change, including any business                requirements for credentialing of
                                                Statements.                                             or personal information that you                      appraisers as adopted by the Appraiser
                                                                                                        provide, such as name and address                     Qualifications Board (The Real Property
                                                SUMMARY:   The Appraisal Subcommittee                   information, email addresses, or phone                Appraiser Qualification Criteria or AQB
                                                (ASC) of the Federal Financial                          numbers. Comments received, including                 Criteria).
                                                Institutions Examination Council                        attachments and other supporting                        Title XI as amended by the Dodd-
                                                requests public comment on a proposal                   materials, are part of the public record              Frank Wall Street Reform and Consumer
                                                to revise ASC Policy Statements                         and subject to public disclosure. Do not              Protection Act of 2010 (Dodd-Frank
                                                (proposed Policy Statements). The                       enclose any information in your                       Act) 4 expanded the ASC’s core
                                                proposed Policy Statements provide                      comment or supporting materials that                  functions to include monitoring of the
                                                guidance to ensure State appraiser                      you consider confidential or                          requirements established by States that
                                                regulatory programs comply with Title                   inappropriate for public disclosure. At               elect to register and supervise the
                                                XI of the Financial Institutions Reform,                the close of the comment period, all                  operations and activities of appraisal
                                                Recovery, and Enforcement Act of 1989,                  public comments will also be made                     management companies 5 (AMCs).
                                                as amended, and the rules promulgated                   available on the ASC’s Web site at                    States electing to register and supervise
                                                thereunder. The proposed Policy                         https://www.asc.gov (follow link in                   AMCs must implement minimum
                                                Statements would supersede the current                  ‘‘What’s New’’) as submitted, unless                  requirements in accordance with the
                                                ASC Policy Statements. The ASC                          modified for technical reasons.                       AMC Rule.6 As a result, States with an
                                                previously published the Proposed                          You may review comments by any of
                                                Revised Policy Statements on January                    the following methods:                                   1 The ASC Board is comprised of seven members.

                                                                                                                                                              Five members are designated by the heads of the
                                                10, 2017, under Docket Number AS17–                        • Viewing Comments Electronically:                 FFIEC agencies (Board of Governors of the Federal
                                                01. The comment period was scheduled                    Go to https://www.Regulations.gov.                    Reserve System [Board], Consumer Financial
                                                to close on April 10, 2017. The ASC                     Enter ‘‘Docket ID AS17–06’’ in the                    Protection Bureau [CFPB], Federal Deposit
                                                suspended the comment period in                         Search box and click ‘‘Search.’’ Click on             Insurance Corporation [FDIC], Office of the
                                                response to the White House Chief of                                                                          Comptroller of the Currency [OCC], and National
                                                                                                        the ‘‘Help’’ tab on the Regulations.gov               Credit Union Administration [NCUA]). The other
                                                Staff Memorandum titled Regulatory                      home page to get information on using                 two members are designated by the heads of the
                                                Freeze Pending Review, signed on                        Regulations.gov, including instructions               Department of Housing and Urban Development
                                                January 20, 2017, pending review by the                 for viewing public comments, viewing                  (HUD) and the Federal Housing Finance Agency
                                                Office of Management and Budget                                                                               (FHFA).
                                                                                                        other supporting and related materials,                  2 Refers to any real estate related financial
                                                (OMB). Technical edits for clarification                and viewing the docket after the close                transaction which: (a) A federal financial
                                                have been made to the proposed Policy                   of the comment period.                                institutions regulatory agency engages in, contracts
                                                Statements since the initial publication,                  • Viewing Comments Personally: You                 for, or regulates; and (b) requires the services of an
                                                which are addressed below in                            may personally inspect comments at the                appraiser. (Title XI § 1121(4), 12 U.S.C. 3350.)
                                                                                                                                                                 3 The 50 States, the District of Columbia, and four
                                                Supplementary Information, section III,                 ASC office, 1401 H Street NW., Suite                  Territories, which are the Commonwealth of Puerto
                                                Statement-by-Statement.                                 760, Washington, DC 20005. To make an                 Rico, Commonwealth of the Northern Mariana
                                                DATES: Comments must be received on                     appointment, please call Lori Schuster                Islands, Guam, and United States Virgin Islands.
                                                or before November 20, 2017.                            at (202) 595–7578.                                       4 Public Law 111–203, 124 Stat. 1376.
                                                                                                                                                                 5 Title XI § 1103(a)(1)(B), 12 U.S.C. 3332.
                                                ADDRESSES: Commenters are encouraged                    FOR FURTHER INFORMATION CONTACT:                         6 The Dodd-Frank Act added section 1124 to Title
                                                to submit comments by the Federal                       James R. Park, Executive Director, at                 XI, Appraisal Management Company Minimum
                                                eRulemaking Portal or email, if possible.               (202) 595–7575, or Alice M. Ritter,                   Requirements, which required the OCC, Board,
                                                You may submit comments, identified                     General Counsel, at (202) 595–7577,                   FDIC, NCUA, CFPB, and FHFA to establish, by rule,
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                                                                                                        Appraisal Subcommittee, 1401 H Street                 minimum requirements for the registration and
                                                by Docket Number AS17–06, by any of                                                                           supervision of AMCs by States that elect to register
                                                the following methods:                                  NW., Suite 760, Washington, DC 20005.                 and supervise AMCs pursuant to Title XI and the
                                                  • Federal eRulemaking Portal:                         SUPPLEMENTARY INFORMATION:                            rules promulgated thereunder. (Title XI § 1124(a),
                                                https://www.Regulations.gov. Follow                                                                           12 U.S.C. 3353(a).) Those rules were finalized and
                                                the instructions for submitting                         I. Background                                         published on June 9, 2015, at 80 Federal Register
                                                                                                                                                              32658 with an effective date of August 10, 2015. (12
                                                comments. Click on the ‘‘Help’’ tab on                    Title XI of the Financial Institutions              CFR 34.210–34.216; 12 CFR 225.190–225.196; 12
                                                the Regulations.gov home page to get                    Reform, Recovery, and Enforcement Act                 CFR 323.8–323.14; 12 CFR 1222.20–1222.26)



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                                                                        Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices                                           43967

                                                AMC regulatory program (AMC                             of AMCs, and to include an explanation                ‘‘Selection of Work Product’’ is renamed
                                                Program) will be evaluated during the                   of the proposed Policy Statements’ three              ‘‘Experience Hours Validation’’ to more
                                                ASC’s Compliance Review to determine                    parts and appendices.                                 accurately reflect the content of the
                                                compliance or lack thereof with Title XI,                                                                     subsection, and compliance with
                                                                                                        Part A: Appraiser Program
                                                and to assess implementation of the                                                                           USPAP is moved to the following
                                                minimum requirements for State                          Policy Statement 1: Statutes,                         subsection titled ‘‘USPAP Compliance’’;
                                                registration and supervision of AMCs as                 Regulations, Policies and Procedures                  the subsection ‘‘Determination of
                                                established by the AMC Rule. The                        Governing State Appraiser Programs                    Experience Time Periods’’ no longer
                                                amendments to Title XI by the Dodd-                        The ASC proposes to modify Policy                  restates AQB Criteria, but rather
                                                Frank Act also allow States with an                     Statement 1 to include a definition of                requires that time periods conform with
                                                AMC Program to add information about                    trainee appraiser to better reflect how               AQB Criteria; and ‘‘Supporting
                                                AMCs in their State to the National                     changes to Title XI affect Appraiser                  Documentation’’ clarifies
                                                Registry of AMCs (AMC Registry). The                    Programs with trainee requirements.                   documentation required. The Summary
                                                proposed Policy Statements include                                                                            of Requirements were modified to
                                                guidance to the States regarding how                    Policy Statement 2: Temporary Practice                conform with these technical edits.
                                                AMC Programs will be evaluated during                     The ASC proposes to modify Policy
                                                                                                                                                              Policy Statement 5: Reciprocity
                                                ASC Compliance Reviews.                                 Statement 2 to clarify requirements for
                                                                                                        temporary practice and includes                         The ASC proposes to modify Policy
                                                II. Overview of Proposed Policy                                                                               Statement 5 to include a requirement
                                                                                                        requirements to track temporary
                                                Statements                                                                                                    that States obtain and maintain
                                                                                                        practice permits and maintain
                                                  The ASC is issuing these proposed                     documentation.                                        sufficient relevant documentation
                                                Policy Statements 7 in three parts to                                                                         pertaining to an application for issuance
                                                                                                        Policy Statement 3: National Registry of              of a credential by reciprocity.
                                                provide States with the necessary
                                                                                                        Appraisers
                                                information to maintain their Appraiser                                                                       Policy Statement 6: Education
                                                Programs and AMC Programs in                              The ASC proposes to modify Policy
                                                compliance with Title XI and the rules                  Statement 3 to clarify requirements                     The ASC proposes to modify Policy
                                                promulgated thereunder:                                 regarding States’ submission of registry              Statement 6 to clarify that States may
                                                  ➢ Part A, Appraiser Program—Policy                    fees and eligibility of appraisers for the            not continue to accept AQB approved
                                                Statements 1 through 7 correspond with                  Appraiser Registry.                                   courses after the AQB’s expiration date
                                                the categories that are: (a) Evaluated                    Technical edits for clarification were              unless the course content is reviewed
                                                during the Appraiser Program                            made to Policy Statement 3 since the                  and approved by the State.
                                                Compliance Review; and (b) included in                  initial publication. The Summary of
                                                                                                        Requirements include the 5-day                        Policy Statement 7: State Agency
                                                the ASC’s Compliance Review Report of                                                                         Enforcement
                                                the Appraiser Program.                                  reporting requirement for disciplinary
                                                  ➢ Part B, AMC Program—Policy                          action consistent with the body of the                  The ASC proposes to modify Policy
                                                Statements 8 through 11 correspond                      Policy Statement, and clarify the                     Statement 7 to clarify the requirement
                                                with the categories that are: (a)                       requirement for States to adopt and                   that States consider USPAP violations
                                                Evaluated during the AMC Program                        implement a policy to protect right of                when investigating a complaint whether
                                                Compliance Review; and (b) included in                  access to the Appraiser Registry.                     or not USPAP violations were the basis
                                                the ASC’s Compliance Review Report of                                                                         for the complaint.
                                                                                                        Policy Statement 4: Application Process
                                                the AMC Program.                                                                                                Technical edits for clarification were
                                                                                                           The ASC proposes to modify Policy                  made to Policy Statement 7 since the
                                                  ➢ Part C, Interim Sanctions—Policy                    Statement 4 to include additional
                                                Statement 12 sets forth required                                                                              initial publication. A footnote was
                                                                                                        guidance to States implementing AQB                   added to clarify that the one-year period
                                                procedures in the event that interim                    Criteria regarding the background of
                                                sanctions are imposed against a State by                                                                      for resolution of complaints is not
                                                                                                        applicants for credentials and requires               intended to have the impact of a statute
                                                the ASC for non-compliance in either                    States to document applicant files with
                                                the Appraiser Program or the AMC                                                                              of limitation.
                                                                                                        evidence supporting decisions made
                                                Program.                                                regarding individual appraisers. Policy               Part B: AMC Program
                                                  The proposal also includes two                        Statement 4 as proposed also provides                   As proposed, Policy Statements 8, 9 &
                                                appendices:                                             additional guidance on requirements for               10 duplicate the provisions of Policy
                                                  1. Appendix A provides an overview                    States to validate renewal requirements               Statements 1, 3 & 7 to every extent
                                                of the Compliance Review process; and                   for appraisers and provides parameters                possible. The standard language is
                                                  2. Appendix B provides a glossary of                  for auditing education-related affidavits.            intentional and will create better
                                                terms.                                                  Finally, Policy Statement 4 as proposed               understanding of the Policy Statements
                                                III. Statement-by-Statement                             clarifies the requirement that States                 by the States as they will be able to
                                                                                                        engage analysts who are knowledgeable                 anticipate how to comply based on their
                                                  The following provides a section by
                                                                                                        about the Uniform Standards of                        understanding of the Policy Statements
                                                section highlight of changes presented
                                                                                                        Professional Appraisal Practice                       they have been following. Differences
                                                in the proposed Policy Statements.
                                                                                                        (USPAP) and document how the                          are discussed below.
                                                Introduction and Purpose                                analysts are qualified.
                                                                                                           Technical edits for clarification were             Policy Statement 8: Statutes,
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                                                  The ASC proposes to expand the                                                                              Regulations, Policies and Procedures
                                                                                                        made to Policy Statement 4 since the
                                                introduction to include the monitoring                                                                        Governing State AMC Programs
                                                                                                        initial publication. The section titled
                                                of States that elect to register and
                                                                                                        Processing of Applications refers to                    The ASC proposes a new Policy
                                                supervise the operations and activities
                                                                                                        ‘‘documentation’’ required rather than                Statement 8 to reflect the statutory
                                                  7 These Policy Statements, adopted [date to be        ‘‘files.’’ In the section titled ‘‘Validation         provision that States are not required to
                                                inserted when final], supersede all previous Policy     Procedures, Objectives and                            establish an AMC Program, but clarify
                                                Statements adopted by the ASC.                          Requirements,’’ the subsection                        for those States that establish AMC


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                                                43968                   Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices

                                                Programs the ASC oversight during ASC                   expectations during a Compliance                        E. Summary of Requirements
                                                Compliance Reviews. As proposed,                        Review.                                               Policy Statement 9
                                                Policy Statement 8 reiterates that States                 The text of the proposed Policy                     National Registry of AMCs (AMC Registry)
                                                                                                        Statements is as follows:                               A. Requirements for the AMC Registry
                                                with an AMC Program must: (1)                                                                                   B. Registry Fee and Invoicing Policies
                                                Establish and maintain an AMC                           Contents                                                C. Reporting Requirements
                                                Program with the legal authority and                    Introduction and Purpose                                D. Access to AMC Registry Data
                                                mechanisms consistent with the AMC                      Part A: Appraiser Program                               E. Summary of Requirements
                                                Rule; (2) impose requirements on AMCs                   Policy Statement 1                                    Policy Statement 10
                                                consistent with the AMC Rule; and (3)                   Statutes, Regulations, Policies and                   State Agency Enforcement
                                                enforce and document ownership                               Procedures Governing State Appraiser               A. State Agency Regulatory Program
                                                limitations for State-registered AMCs.                       Programs                                           B. Enforcement Process
                                                                                                          A. State Regulatory Structure                         C. Summary of Requirements
                                                As proposed, Policy Statement 8                                                                               Policy Statement 11
                                                                                                          B. Funding and Staffing
                                                informs States that while they may have                   C. Minimum Criteria                                 Statutory Implementation Period
                                                a more expansive definition of an AMC                     D. Federally Recognized Appraiser                   Part C: Interim Sanctions
                                                in their State statute, only AMCs that                       Classifications                                  Policy Statement 12
                                                meet the federal definition in Title XI                   E. Non-Federally Recognized Credentials             Interim Sanctions
                                                may be included on the AMC Registry.                      F. Appraisal Standards                                A. Authority
                                                                                                          G. Exemptions                                         B. Opportunity to be Heard or Correct
                                                Policy Statement 9: National Registry of                  H. ASC Staff Attendance at State Board                   Conditions
                                                AMCs (AMC Registry)                                          Meetings                                           C. Procedures
                                                  The ASC proposes a new Policy                           I. Summary of Requirements                          Appendices
                                                                                                        Policy Statement 2                                    Appendix A—Compliance Review Process
                                                Statement 9 to clarify requirements for                                                                       Appendix B—Glossary of Terms
                                                States with an AMC Program to                           Temporary Practice
                                                                                                          A. Requirement for Temporary Practice               Introduction and Purpose
                                                maintain the AMC Registry in the same
                                                                                                          B. Excessive Fees or Burdensome
                                                way they maintain the Appraiser                              Requirements                                        Title XI of the Financial Institutions
                                                Registry.                                                 C. Summary of Requirements                          Reform, Recovery, and Enforcement Act
                                                  Technical edits for clarification were                Policy Statement 3                                    of 1989 as amended (Title XI)
                                                made to Policy Statement 9 since the                    National Registry of Appraisers                       established the Appraisal Subcommittee
                                                initial publication. The Summary of                       A. Requirements for the National Registry           of the Federal Financial Institutions
                                                Requirements includes the requirement                        of Appraisers                                    Examination Council (ASC).8 The
                                                for States to adopt and implement a                       B. Registry Fee and Invoicing Policies
                                                                                                                                                              purpose of Title XI is to provide
                                                policy to protect right of access to the                  C. Access to Appraiser Registry Data
                                                                                                          D. Information Sharing                              protection of Federal financial and
                                                AMC Registry.                                                                                                 public policy interests by upholding
                                                                                                          E. Summary of Requirements
                                                Policy Statement 10: State Agency                       Policy Statement 4                                    Title XI requirements for appraisals
                                                Enforcement                                             Application Process                                   performed for federally related
                                                                                                          A. Processing of Applications                       transactions. Specifically, those
                                                  The ASC proposes a new Policy                           B. Qualifying Education for Initial or              appraisals shall be performed in writing,
                                                Statement 10 to clarify requirements for                     Upgrade Applications                             in accordance with uniform standards,
                                                States’ AMC enforcement programs in                       C. Continuing Education for Reinstatement           by individuals whose competency has
                                                those States with an AMC Program.                            and Renewal Applications
                                                                                                                                                              been demonstrated and whose
                                                                                                          D. Experience for Initial or Upgrade
                                                Policy Statement 11: Statutory                               Applications                                     professional conduct will be subject to
                                                Implementation Period                                     E. Examination                                      effective supervision.
                                                  The ASC proposes a new Policy                           F. Summary of Requirements                             Pursuant to Title XI, one of the ASC’s
                                                Statement 11 to clarify the statutory                   Policy Statement 5                                    core functions is to monitor the
                                                implementation period and any                           Reciprocity                                           requirements established by the States 9
                                                extensions that may be granted.                           A. Reciprocity Policy                               for certification and licensing of
                                                                                                          B. Application of Reciprocity Policy                appraisers qualified to perform
                                                Part C: Interim Sanctions                                 C. Appraiser Compliance Requirements                appraisals in connection with federally
                                                                                                          D. Well-Documented Application Files                related transactions.10 Title XI as
                                                Policy Statement 12: Interim Sanctions                    E. Summary of Requirements
                                                                                                        Policy Statement 6
                                                                                                                                                              amended by the Dodd-Frank Wall Street
                                                   The ASC proposes a new Policy                                                                              Reform and Consumer Protection Act of
                                                Statement 12 which modifies existing                    Education
                                                                                                          A. Course Approval                                  2010 (Dodd-Frank Act) 11 expanded the
                                                Policy Statement 8 to clarify interim                                                                         ASC’s core functions to include
                                                                                                          B. Distance Education
                                                sanctions which may be imposed on                         C. Summary of Requirements                          monitoring of the requirements
                                                State Programs when those programs                      Policy Statement 7                                    established by States that elect to
                                                fail to be effective. The proposed                      State Agency Enforcement
                                                procedures include due process                            A. State Agency Regulatory Program                    8 The ASC board is made up of seven members.
                                                provisions and rules of evidence, and                     B. Enforcement Process                              Five members are designated by the heads of the
                                                would establish timeliness for                            C. Summary of Requirements                          FFIEC agencies (Board of Governors of the Federal
                                                proceedings.                                            Part B: AMC Program                                   Reserve System, Bureau of Consumer Financial
                                                                                                        Policy Statement 8                                    Protection, Federal Deposit Insurance Corporation,
                                                IV. Request for Comment                                 Statutes, Regulations, Policies and                   Office of the Comptroller of the Currency, and
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                                                                                                                                                              National Credit Union Administration). The other
                                                  The ASC seeks comment on all                               Procedures Governing State AMC                   two members are designated by the heads of the
                                                aspects of the proposed Policy                               Programs                                         Department of Housing and Urban Development
                                                                                                          A. Participating States and ASC Oversight           and the Federal Housing Finance Agency.
                                                Statements. In addition, the ASC                          B. Relation to State Law                              9 See Appendix B, Glossary of Terms, for the
                                                requests comments on whether the                          C. Funding and Staffing                             definition of ‘‘State.’’
                                                proposed Policy Statements provide                        D. Minimum Requirements for Registration              10 See Appendix B, Glossary of Terms, for the
                                                State Programs with the necessary                            and Supervision of AMCs as Established           definition of ‘‘federally related transaction.’’
                                                information to understand the ASC’s                          by the AMC Rule                                    11 Public Law. 111–203, 124 Stat. 1376.




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                                                                         Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices                                           43969

                                                register and supervise the operations                   the Appraiser Program or the AMC                      C. Minimum Criteria
                                                and activities of appraisal management                  Program.                                                 Title XI requires States to adopt and/
                                                companies 12 (AMCs).13                                                                                        or implement all relevant AQB Criteria.
                                                  The ASC performs periodic                             Part A: Appraiser Program
                                                                                                                                                              Requirements established by a State for
                                                Compliance Reviews 14 of each State                     Policy Statement 1                                    certified residential or certified general
                                                appraiser regulatory program (Appraiser
                                                                                                        Statutes, Regulations, Policies and                   appraisers, as well as requirements
                                                Program) to determine compliance or
                                                                                                        Procedures Governing State Appraiser                  established for licensed appraisers,
                                                lack thereof with Title XI, and to assess
                                                                                                        Programs                                              trainee appraisers and supervisory
                                                implementation of minimum
                                                                                                                                                              appraisers must meet or exceed
                                                requirements for credentialing of                       A. State Regulatory Structure                         applicable AQB Criteria.
                                                appraisers as adopted by the Appraiser
                                                Qualifications Board (The Real Property                    Title XI requires the ASC to monitor               D. Federally Recognized Appraiser
                                                Appraiser Qualification Criteria or AQB                 each State appraiser certifying and                   Classifications
                                                Criteria). As a result of the Dodd-Frank                licensing agency for the purpose of                   State Certified Appraisers
                                                Act amendments to Title XI, States with                 determining whether each such agency
                                                an AMC regulatory program (AMC                          has in place policies, practices and                    ‘‘State certified appraisers’’ means
                                                Program) will be evaluated during the                   procedures consistent with the                        those individuals who have satisfied the
                                                Compliance Review to determine                          requirements of Title XI.17 The ASC                   requirements for residential or general
                                                compliance or lack thereof with Title XI,               recognizes that each State may have                   certification in a State whose criteria for
                                                and to assess implementation of the                     legal, fiscal, regulatory or other factors            certification meet or exceed the
                                                minimum requirements for State                          that may influence the structure and                  applicable minimum AQB Criteria.
                                                registration and supervision of AMCs as                 organization of its Appraiser Program.                Permitted scope of practice and
                                                established by the                                      Therefore, a State has flexibility to                 designation for State certified
                                                  AMC Rule.15                                           structure its Appraiser Program so long               residential or certified general
                                                  The ASC is issuing these revised                      as it meets its Title XI-related                      appraisers must be consistent with State
                                                Policy Statements 16 in three parts to                  responsibilities.                                     and Federal laws, including regulations
                                                provide States with the necessary                                                                             and supplementary guidance.
                                                information to maintain their Appraiser                    States should maintain an
                                                Programs and AMC Programs in                            organizational structure for appraiser                State Licensed Appraisers
                                                compliance with Title XI:                               certification, licensing and supervision                ‘‘State licensed appraisers’’ means
                                                  ➢ Part A, Appraiser Program—Policy                    that avoids conflicts of interest. A State            those individuals who have satisfied the
                                                Statements 1 through 7 correspond with                  agency may be headed by a board,                      requirements for licensing in a State
                                                the categories that are: (a) Evaluated                  commission or an individual. State                    whose criteria for licensing meet or
                                                during the Appraiser Program                            board 18 or commission members, or                    exceed the applicable minimum AQB
                                                Compliance Review; and (b) included in                  employees in policy or decision-making                Criteria. The permitted scope of practice
                                                the ASC’s Compliance Review Report of                   positions, should understand and                      and designation for State licensed
                                                the Appraiser Program.                                  adhere to State statutes and regulations              appraisers must be consistent with State
                                                  ➢ Part B, AMC Program—Policy                          governing performance of                              and Federal laws, including regulations
                                                Statements 8 through 11 correspond                      responsibilities consistent with the                  and supplementary guidance.
                                                with the categories that are: (a)                       highest ethical standards for public
                                                Evaluated during the AMC Program                        service. In addition, Appraiser Programs              Trainee Appraisers
                                                Compliance Review; and (b) included in                  using private entities or contractors                    ‘‘Trainee appraisers’’ means those
                                                the ASC’s Compliance Review Report of                   should establish appropriate internal                 individuals who have satisfied the
                                                the AMC Program.                                        policies, procedures and safeguards to                requirements for credentialing in a State
                                                  ➢ Part C, Interim Sanctions—Policy                    promote compliance with the State                     whose criteria for credentialing meet or
                                                Statement 12 sets forth required                        agency’s responsibilities under Title XI              exceed the applicable minimum AQB
                                                procedures in the event that interim                    and these Policy Statements.                          Criteria. Any minimum qualification
                                                sanctions are imposed against a State by                B. Funding and Staffing                               requirements established by a State for
                                                the ASC for non-compliance in either                                                                          individuals in the position of ‘‘trainee
                                                                                                           The Dodd-Frank Act amended Title                   appraiser’’ or ‘‘supervisory appraiser’’
                                                  12 TitleXI § 1103(a)(1)(B), 12 U.S.C. 3332.           XI to require the ASC to determine                    must meet or exceed the applicable
                                                  13 See Appendix B, Glossary of Terms, for the
                                                                                                        whether States have sufficient funding                minimum AQB Criteria. ASC staff will
                                                definition of ‘‘appraisal management company’’ or
                                                AMC.                                                    and staffing to meet their Title XI                   evaluate State designations such as
                                                  14 See Appendix A, Compliance Review Process.         requirements. Compliance with this                    ‘‘registered appraiser,’’ ‘‘apprentice
                                                  15 The Dodd-Frank Act required the Office of the      provision requires that a State must                  appraiser,’’ ‘‘provisional appraiser,’’ or
                                                Comptroller of the Currency; Board of Governors of      provide its Appraiser Program with                    any other similar designation to
                                                the Federal Reserve System; Federal Deposit             funding and staffing sufficient to carry              determine if, in substance, such
                                                Insurance Corporation; National Credit Union
                                                Administration; Bureau of Consumer Financial            out its Title XI-related duties. The ASC              designation is consistent with a ‘‘trainee
                                                Protection; and Federal Housing Finance Agency to       evaluates the sufficiency of funding and              appraiser’’ designation and, therefore,
                                                establish, by rule, minimum requirements to be          staffing as part of its review of all                 administered to comply with Title XI.
                                                imposed by a participating State appraiser              aspects of an Appraiser Program’s                     The permitted scope of practice and
                                                certifying and licensing agency on AMCs doing
                                                                                                                                                              designation for trainee appraisers must
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                                                business in the State. (Title XI § 1124(a), 12 U.S.C.   effectiveness, including the adequacy of
                                                3353(a).) Those rules were finalized and published      State boards, committees, or                          be consistent with State and Federal
                                                on June 9, 2015, at 80 Federal Register 32658 with      commissions responsible for carrying                  laws, including regulations and
                                                an effective date of August 10, 2015. (12 CFR           out Title XI-related duties.                          supplementary guidance.
                                                34.210–34.216; 12 CFR 225.190–225.196; 12 CFR                                                                    Any State or Federal agency may
                                                323.8–323.14; 12 CFR 1222.20–1222.26.)
                                                  16 These Policy Statements, adopted [date to be         17 TitleXI § 1118(a), 12 U.S.C. 3347.               impose additional appraiser
                                                inserted when final], supersede all previous Policy       18 See Appendix B, Glossary of Terms, for the       qualification requirements for trainee,
                                                Statements adopted by the ASC.                          definition of ‘‘State board.’’                        State licensed, certified residential or


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                                                43970                    Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices

                                                certified general classifications, if they              opinion as to the market value of an                     the privacy of individuals and any
                                                consider such requirements necessary to                 adequately described property as of a                    confidential matters.
                                                carry out their responsibilities under                  specific date(s) supported by the
                                                                                                                                                                 I. Summary of Requirements
                                                Federal and/or State statutes and                       presentation and analysis of relevant
                                                regulations, so long as the additional                  market information.’’ Per these                             1. States must require that appraisals
                                                qualification requirements do not                       regulations, an appraiser performing an                  be performed in accordance with the
                                                preclude compliance with AQB Criteria.                  appraisal review which includes the                      latest version of USPAP.22
                                                                                                        reviewer providing his or her own                           2. States must, at a minimum, adopt
                                                E. Non-Federally Recognized                                                                                      and/or implement all relevant AQB
                                                                                                        opinion of value constitutes an
                                                Credentials                                                                                                      Criteria.23
                                                                                                        appraisal. Under these same regulations,
                                                  States using non-federally recognized                 an appraisal review that does not                           3. States must have policies, practices
                                                credentials or designations 19 must                     include the reviewer providing his or                    and procedures consistent with Title
                                                ensure that they are easily distinguished               her own opinion of value does not                        XI.24
                                                from the federally recognized                           constitute an appraisal. Therefore,                         4. States must have funding and
                                                credentials.                                            under the Federal financial institutions                 staffing sufficient to carry out their Title
                                                F. Appraisal Standards                                  regulatory agencies’ regulations, only                   XI-related duties.25
                                                                                                        those transactions that involve                             5. States must use proper designations
                                                   Title XI and the Federal financial                   appraisals for federally related                         and permitted scope of practice for
                                                institutions regulatory agencies’                       transactions require the services of a                   certified residential; certified general;
                                                regulations mandate that all appraisals                 State certified or licensed appraiser.                   licensed; and trainee classifications.26
                                                performed in connection with federally                                                                              6. State board members, and any
                                                related transactions be in written form,                G. Exemptions                                            persons in policy or decision-making
                                                prepared in accordance with generally                      Title XI and the Federal financial                    positions, must perform their
                                                accepted appraisal standards as                         institutions regulatory agencies’                        responsibilities consistent with Title
                                                promulgated by the Appraisal Standards                  regulations specifically require the use                 XI.27
                                                Board (ASB) in the Uniform Standards                    of State certified or licensed appraisers                   7. States’ certification and licensing
                                                of Professional Appraisal Practice                      in connection with the appraisal of                      requirements must meet the minimum
                                                (USPAP), and be subject to appropriate                  certain real estate-related financial                    requirements set forth in Title XI.28
                                                review for compliance with USPAP.20                     transactions.21 A State may not exempt                      8. State requirements for trainee
                                                States that have incorporated USPAP                     any individual or group of individuals                   appraisers and supervisory appraisers
                                                into State law should ensure that                       from meeting the State’s certification or                must meet or exceed the AQB Criteria.
                                                statutes or regulations are updated                     licensing requirements if the individual                    9. State agencies must be granted
                                                timely to adopt the current version of                  or group member performs an appraisal                    adequate authority by the State to
                                                USPAP, or if State law allows,                          when Federal statutes and regulations                    maintain an effective regulatory
                                                automatically incorporate the latest                    require the use of a certified or licensed               Appraiser Program in compliance with
                                                version of USPAP as it becomes                          appraiser. For example, an individual                    Title XI.29
                                                effective. States should consider ASB                   who has been exempted by the State
                                                Advisory Opinions, Frequently Asked                                                                              Policy Statement 2
                                                                                                        from its appraiser certification or
                                                Questions, and other written guidance                   licensing requirements because he or                     Temporary Practice
                                                issued by the ASB regarding                             she is an officer, director, employee or
                                                interpretation and application of                                                                                A. Requirement for Temporary Practice
                                                                                                        agent of a federally regulated financial
                                                USPAP.                                                  institution would not be permitted to                       Title XI requires State agencies to
                                                   Any State or Federal agency may                      perform an appraisal in connection with                  recognize, on a temporary basis, the
                                                impose additional appraisal standards if                a federally related transaction.                         certification or license of an out-of-State
                                                they consider such standards necessary                                                                           appraiser entering the State for the
                                                to carry out their responsibilities, so                 H. ASC Staff Attendance at State Board                   purpose of completing an appraisal
                                                long as additional appraisal standards                  Meetings                                                 assignment 30 for a federally related
                                                do not preclude compliance with                            The efficacy of the ASC’s Compliance                  transaction. States are not, however,
                                                USPAP or the Federal financial                          Review process rests on the ASC’s                        required to grant temporary practice
                                                institutions regulatory agencies’                       ability to obtain reliable information                   permits to trainee appraisers. The out-
                                                appraisal regulations for work                          about all areas of a State’s Appraiser                   of-State appraiser must register with the
                                                performed for federally related                         Program. ASC staff regularly attends                     State agency in the State of temporary
                                                transactions.                                           open State board meetings as part of the                 practice (Host State). A State may
                                                   The Federal financial institutions                   on-site Compliance Review process.                       determine the process necessary for
                                                regulatory agencies’ appraisal                          States are expected to make available for
                                                regulations define ‘‘appraisal’’ and                    review by ASC staff minutes of closed                       22 Title XI § 1101, 12 U.S.C. 3331; Title XI

                                                identify which real estate-related                      meetings and executive sessions. States                  § 1118(a), 12 U.S.C. 3347; AQB Real Property
                                                financial transactions require the                                                                               Appraiser Qualification Criteria.
                                                                                                        are encouraged to allow ASC staff to                        23 Title XI §§ 1116(a), (c) and (e), 12 U.S.C. 3345;
                                                services of a State certified or licensed               attend closed and executive sessions of                  Title XI § 1118(a), 12 U.S.C. 3347.
                                                appraiser. These regulations define                     State board meetings where such                             24 Title XI § 1118(a), 12 U.S.C. 3347.
                                                ‘‘appraisal’’ as a ‘‘written statement                  attendance would not violate State law                      25 Id; Title XI § 1118(b), 12 U.S.C. 3347.
                                                independently and impartially prepared
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                                                                                                        or regulation or be inconsistent with                       26 Title XI §§ 1116(a), (c) and (e), 12 U.S.C. 3345;

                                                by a qualified appraiser setting forth an               other legal obligations of the State                     Title XI § 1118(a), 12 U.S.C. 3347; Title XI § 1113,
                                                                                                                                                                 12 U.S.C. 3342; AQB Real Property Appraiser
                                                                                                        board. ASC staff is obligated to protect                 Qualification Criteria.
                                                  19 See Appendix B, Glossary of Terms, for the

                                                definition of ‘‘non-federally recognized credentials
                                                                                                        information obtained during the                             27 Title XI § 1118(a), 12 U.S.C. 3347.

                                                or designations.’’                                      Compliance Review process concerning                        28 Title XI §§ 1116(a), (c) and (e), 12 U.S.C. 3345.

                                                  20 See Appendix B, Glossary of Terms for the                                                                      29 Title XI § 1118(b), 12 U.S.C. 3347.

                                                definition of ‘‘Uniform Standards of Professional         21 Title XI § 1112, 12 U.S.C. 3341; Title XI § 1113,      30 See Appendix B, Glossary of Terms, for the

                                                Appraisal Practice.’’                                   12 U.S.C. 3342; Title XI § 1114, 12 U.S.C. 3343.         definition of ‘‘assignment.’’



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                                                                        Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices                                                       43971

                                                ‘‘registration’’ provided such process                     h. maintain documentation sufficient                 Policy Statement 3
                                                complies with Title XI and does not                     to demonstrate compliance with this
                                                                                                                                                                National Registry of Appraisers
                                                impose ‘‘excessive fees or burdensome                   Policy Statement.
                                                requirements,’’ as determined by the                       Host State agencies may not:                         A. Requirements for the National
                                                ASC.31 Thus, a credentialed appraiser 32                   a. Limit the valid time period of a                  Registry of Appraisers
                                                from State A has a statutory right to                   temporary practice permit to less than 6                   Title XI requires the ASC to maintain
                                                enter State B (the Host State) to perform               months (unless the applicant requests a                 a National Registry of State certified and
                                                an assignment concerning a federally                    specific end date and the applicant is                  licensed appraisers who are eligible to
                                                related transaction, so long as the                     allowed an extension if required to                     perform appraisals in federally related
                                                appraiser registers with the State agency               complete the assignment, the                            transactions (Appraiser Registry).38 Title
                                                in State B prior to performing the                      applicant’s credential is no longer in                  XI further requires the States to transmit
                                                assignment. Though Title XI                             active status during that period of time);              to the ASC: (1) A roster listing
                                                contemplates reasonably free movement                                                                           individuals who have received a State
                                                                                                           b. limit an appraiser to one temporary
                                                of credentialed appraisers across State                                                                         certification or license in accordance
                                                                                                        practice permit per calendar year; 35
                                                lines, an out-of-State appraiser must                                                                           with Title XI; (2) reports on the issuance
                                                comply with the Host State’s real estate                   c. charge a temporary practice permit
                                                                                                        fee exceeding $250, including one                       and renewal of licenses and
                                                appraisal statutes and regulations and is                                                                       certifications, sanctions, disciplinary
                                                subject to the Host State’s full regulatory             extension fee;
                                                                                                                                                                actions, revocations and suspensions;
                                                jurisdiction. States should utilize the                    d. impose State appraiser                            and (3) the registry fee as set by the
                                                National Registry of Appraisers to verify               qualification requirements for                          ASC 39 from individuals who have
                                                credential status on applicants for                     education, experience and/or exam                       received certification or licensing. States
                                                temporary practice.                                     upon temporary practitioners;                           must notify the ASC as soon as
                                                                                                           e. require temporary practitioners to                practicable if a credential holder listed
                                                B. Excessive Fees or Burdensome                         obtain a certification or license in the
                                                Requirements                                                                                                    on the Appraiser Registry does not
                                                                                                        State of temporary practice;                            qualify for the credential held.
                                                   Title XI prohibits States from                          f. require temporary practitioners to                   Roster and registry fee requirements
                                                imposing excessive fees or burdensome                   affiliate with an in-State licensed or                  apply to all individuals who receive
                                                requirements, as determined by the                      certified appraiser;                                    State certifications or licenses,
                                                ASC, for temporary practice.33                             g. refuse to register licensed or                    originally or by reciprocity, whether or
                                                Adherence by State agencies to the                      certified appraisers seeking temporary                  not the individuals are, in fact,
                                                following mandates and prohibitions                     practice in a State that does not have a                performing or planning to perform
                                                will deter the imposition of excessive                  licensed or certified level credential; or              appraisals in federally related
                                                fees or burdensome requirements.                                                                                transactions. If an appraiser is certified
                                                                                                           h. prohibit temporary practice.
                                                   Host State agencies must:                                                                                    or licensed in more than one State, the
                                                   a. Issue temporary practice permits on                  Home State agencies may not:
                                                                                                                                                                appraiser is required to be on each
                                                an assignment basis;                                       a. Delay the issuance of a written
                                                                                                                                                                State’s roster of certified or licensed
                                                   b. issue temporary practice permits                  ‘‘letter of good standing’’ or similar
                                                                                                                                                                appraisers, and a registry fee is due from
                                                within five business days of receipt of                 document for more than five business
                                                                                                                                                                each State in which the appraiser is
                                                a completed application, or notify the                  days after receipt of a request; or
                                                                                                                                                                certified or licensed.
                                                applicant and document the file as to                      b. fail to consider and, if appropriate,                Only AQB-compliant certified and
                                                the circumstances justifying delay or                   take disciplinary action when one of its                licensed appraisers in active status on
                                                other action;                                           certified or licensed appraisers is                     the Appraiser Registry are eligible to
                                                   c. issue temporary practice permits                  disciplined by another State.                           perform appraisals in connection with
                                                designating the permit’s effective date;                                                                        federally related transactions. Only
                                                   d. take regulatory responsibility for a              C. Summary of Requirements
                                                                                                                                                                those appraisers whose registry fees
                                                temporary practitioner’s unethical,                        1. States must recognize, on a                       have been transmitted to the ASC will
                                                incompetent and/or fraudulent practices                 temporary basis, appraiser credentials                  be eligible to be on the Appraiser
                                                performed while in the State;                           issued by another State if the property                 Registry for the period subsequent to
                                                   e. notify the appraiser’s home State                 to be appraised is part of a federally                  payment of the fee.
                                                agency 34 in the case of disciplinary                   related transaction.36                                     Some States may give State certified
                                                action concerning a temporary                              2. State agencies must adhere to                     or licensed appraisers an option to not
                                                practitioner;                                           mandates and prohibitions as                            pay the registry fee. If a State certified
                                                   f. allow at least one temporary
                                                                                                        determined by the ASC that deter the                    or licensed appraiser chooses not to pay
                                                practice permit extension through a                                                                             the registry fee, then the Appraiser
                                                                                                        imposition of excessive fees or
                                                streamlined process;                                                                                            Program must ensure that any potential
                                                   g. track all temporary practice permits              burdensome requirements for temporary
                                                                                                        practice.37                                             user of that appraiser’s services is aware
                                                using a permit log which includes the
                                                                                                                                                                that the appraiser is not eligible to
                                                name of the applicant, date application
                                                                                                           35 State agencies may establish by statute or        perform appraisals for federally related
                                                received, date completed application                    regulation a policy that places reasonable limits on    transactions. The Appraiser Program
                                                received, date of issuance, and date of                 the number of times an out-of-State certified or        must place a conspicuous notice
                                                expiration, if any (States are strongly                 licensed appraiser may exercise his or her
                                                                                                        temporary practice rights in a given year. If such a
                                                                                                                                                                directly on the face of any evidence of
                                                encouraged to maintain this information
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                                                                                                        policy is not established, a State agency may choose    the appraiser’s authority to appraise
                                                in an electronic, sortable format); and                 not to honor an out-of-State certified or licensed
                                                                                                        appraiser’s temporary practice rights if it has made      38 Title XI § 1103(a)(3), 12 U.S.C. 3332.
                                                  31 Title XI § 1122(a)(2), 12 U.S.C. 3351.             a determination that the appraiser is abusing his or      39 Title XI § 1109, Roster of State certified or
                                                  32 See Appendix B, Glossary of Terms, for the         her temporary practice rights and is regularly          licensed appraisers; authority to collect and
                                                definition of ‘‘credentialed appraisers.’’              engaging in real estate appraisal services within the   transmit fees, requires the ASC to consider at least
                                                  33 Title XI § 1122(a)(2), 12 U.S.C. 3351.             State.                                                  once every 5 years whether to adjust the dollar
                                                  34 See Appendix B, Glossary of Terms, for the            36 Title XI § 1122(a)(1), 12 U.S.C. 3351.
                                                                                                                                                                amount of the registry fees to account for inflation.
                                                definition of ‘‘home State agency.’’                       37 Title XI § 1122(a)(2), 12 U.S.C. 3351.            (Title XI § 1109(a), 12 U.S.C. 3338.)



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                                                43972                   Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices

                                                stating, ‘‘Not Eligible To Appraise                     disciplinary action information), is                  thereby making the appraiser ineligible
                                                Federally Related Transactions,’’ and                   restricted to authorized State and                    to perform appraisals for federally
                                                the appraiser must not be listed in                     Federal regulatory agencies. States must              related transactions or other
                                                active status on the Appraiser Registry.                designate a senior official, such as an               transactions requiring the use of State
                                                  The ASC extranet application allows                   executive director, to serve as the State’s           certified or licensed appraisers.43
                                                States to update their appraiser                        Authorized Registry Official, and                        Title XI also contemplates the
                                                credential information directly to the                  provide to the ASC, in writing,                       reasonably free movement of certified
                                                Appraiser Registry. Only Authorized                     information regarding the designated                  and licensed appraisers across State
                                                Registry Officials are allowed to request               Authorized Registry Official. States                  lines. This freedom of movement
                                                access for their State personnel (see                   must ensure that the authorization                    assumes, however, that certified and
                                                section C below). The ASC will issue a                  information provided to the ASC is                    licensed appraisers are, in all cases,
                                                User Name and Password to the                           updated and accurate.                                 held accountable and responsible for
                                                designated State personnel responsible                                                                        their actions while performing appraisal
                                                for that State’s Appraiser Registry                     D. Information Sharing
                                                                                                                                                              activities.
                                                entries. Designated State personnel are                   Information sharing (routine exchange
                                                required to protect the right of access,                of certain information among lenders,                 E. Summary of Requirements
                                                and not share their User Name or                        governmental entities, State agencies                    1. States must reconcile and pay
                                                Password with anyone. States must                       and the ASC) is essential for carrying                registry invoices in a timely manner (45
                                                adopt and implement a written policy to                 out the purposes of Title XI. Title XI                calendar days after the invoice date).44
                                                protect the right of access, as well as the             requires the ASC, any other Federal
                                                ASC issued User Name and Password.                                                                               2. States must report all disciplinary
                                                                                                        agency or instrumentality, or any
                                                The ASC will provide detailed                                                                                 action taken against an appraiser to the
                                                                                                        federally recognized entity to report any
                                                specifications regarding the data                                                                             ASC via the extranet application within
                                                                                                        action of a State certified or licensed
                                                elements on the Appraiser Registry.                                                                           5 business days after the disciplinary
                                                                                                        appraiser that is contrary to the
                                                                                                                                                              action is final, as determined by State
                                                B. Registry Fee and Invoicing Policies                  purposes of Title XI to the appropriate
                                                                                                                                                              law.45
                                                                                                        State agency for disposition. The ASC
                                                  Each State must remit to the ASC the                  believes that full implementation of this                3. States not reporting via the extranet
                                                annual registry fee, as set by the ASC,                 Title XI requirement is vital to the                  application must provide, in writing to
                                                for State certified or licensed appraisers              integrity of the system of State appraiser            the ASC, a description of the
                                                within the State to be listed on the                    regulation. States are encouraged to                  circumstances preventing compliance
                                                Appraiser Registry. Requests to prorate                 develop and maintain procedures for                   with this requirement.46
                                                refunds or partial-year registrations will              sharing of information among                             4. For the most serious disciplinary
                                                not be granted. If a State collects                     themselves.                                           actions (i.e., voluntary surrenders,
                                                multiple-year fees for multiple-year                      The Appraiser Registry’s value and                  suspensions and revocations, or any
                                                certifications or licenses, the State may               usefulness are largely dependent on the               action that interrupts a credential
                                                choose to remit to the ASC the total                    quality and frequency of State data                   holder’s ability to practice), the
                                                amount of the multiple-year registry fees               submissions. Accurate and frequent data               appraiser’s status must be changed on
                                                or the equivalent annual fee amount.                    submissions from all States are                       the Appraiser Registry to ‘‘inactive,’’
                                                The ASC will, however, record                           necessary to maintain an up-to-date                   thereby making the appraiser ineligible
                                                appraisers on the Appraiser Registry                    Appraiser Registry. States must submit                to perform appraisals for federally
                                                only for the number of years for which                  appraiser data in a secure format to the              related transactions or other
                                                the ASC has received payment.                           ASC at least monthly. If there are no                 transactions requiring the use of State
                                                Nonpayment by a State of an appraiser’s                 changes to the data, the State agency                 certified or licensed appraisers.47
                                                registry fee may result in the status of                must notify the ASC of that fact in                      5. States must designate a senior
                                                that appraiser being listed as ‘‘inactive.’’            writing. States are encouraged to submit              official, such as an executive director,
                                                States must reconcile and pay registry                  data as frequently as possible.                       who will serve as the State’s Authorized
                                                invoices in a timely manner (45                           States must report all disciplinary                 Registry Official, and provide to the
                                                calendar days after the invoice date).                  action 40 taken against an appraiser to               ASC, in writing, information regarding
                                                When a State’s failure to pay a past due                the ASC via the extranet application                  the selected Authorized Registry
                                                invoice results in appraisers being listed              within 5 business days after the                      Official, and any individual(s)
                                                as inactive, the ASC will not change                    disciplinary action is final, as                      authorized to act on their behalf.48
                                                those appraisers back to active status                  determined by State law.41 States not                    6. States must ensure that the
                                                until payment is received from the                      reporting via the extranet application                authorization information provided to
                                                State. An inactive status on the                        must provide, in writing to the ASC, a                the ASC is updated and accurate.49
                                                Appraiser Registry, for whatever the                    description of the circumstances                         7. States must adopt and implement a
                                                reason, renders an appraiser ineligible                 preventing compliance with this                       written policy to protect the right of
                                                to perform appraisals in connection                     requirement.42                                        access to the Appraiser Registry, as well
                                                with federally related transactions.                      For the most serious disciplinary                   as the ASC issued User Name and
                                                C. Access to Appraiser Registry Data                    actions (i.e., voluntary surrenders,                  Password.50
                                                                                                        suspensions and revocations, or any
                                                  The ASC Web site provides free                        action that interrupts a credential                     43 Id.
                                                access to the public portion of the
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                                                                                                        holder’s ability to practice), the                       44 Title XI § 1118(a), 12 U.S.C. 3347; Title XI
                                                Appraiser Registry at www.asc.gov. The                  appraiser’s status must be changed on                 § 1109(a), 12 U.S.C. 3338.
                                                public portion of the Appraiser Registry                the Appraiser Registry to ‘‘inactive,’’                  45 Id.
                                                data may be downloaded using                                                                                     46 Title XI § 1118(a), 12 U.S.C. 3347.
                                                predefined queries or user-customized                     40 See Appendix B, Glossary of Terms, for the          47 Id.

                                                applications.                                           definition of ‘‘disciplinary action.’’                   48 Id.

                                                  Access to the full database, which                      41 Id.                                                 49 Id.

                                                includes non-public data (e.g., certain                   42 Title XI § 1118(a), 12 U.S.C. 3347.                 50 Id.




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                                                                          Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices                                                 43973

                                                   8. States must ensure the accuracy of                     matter and the reasons for those                        education hours required for renewal of
                                                all data submitted to the Appraiser                          determinations. Documentation must                      an appraiser credential were completed
                                                Registry.51                                                  include:                                                consistent with AQB Criteria. States
                                                   9. States must submit appraiser data                        1. Application receipt date;                          may accept affidavits for continuing
                                                (other than discipline) to the ASC at                          2. Education;                                         education credit claimed for credential
                                                least monthly. If a State’s data does not                      3. Experience;                                        renewal so long as the State implements
                                                change during the month, the State                             4. Examination;                                       a reliable validation procedure that
                                                agency must notify the ASC of that fact                        5. Continuing education; and                          adheres to the following objectives and
                                                in writing.52                                                  6. Any administrative or disciplinary                 requirements:
                                                   10. If a State certified or licensed                      action taken in connection with the
                                                                                                             application process, including results of               a. Validation Objectives
                                                appraiser chooses not to pay the registry
                                                fee, the State must ensure that any                          any continuing education audit.                            The State’s validation procedures
                                                potential user of that appraiser’s                           B. Qualifying Education for Initial or                  must be structured to permit acceptable
                                                services is aware that the appraiser’s                       Upgrade Applications                                    projections of the sample results to the
                                                certificate or license is limited to                                                                                 entire population of subject appraisers.
                                                performing appraisals only in                                  States must verify that:                              Therefore, the sample must include an
                                                connection with non-federally related                          (1) The applicant’s claimed education                 adequate number of affidavits selected
                                                transactions.53                                              courses are acceptable under AQB                        from each federally recognized
                                                                                                             Criteria; and                                           credential level to have a reasonable
                                                Policy Statement 4                                             (2) the applicant has successfully                    chance of identifying appraisers who
                                                                                                             completed courses consistent with AQB                   fail to comply with AQB Criteria, and
                                                Application Process
                                                                                                             Criteria for the appraiser credential                   the sample must include a statistically
                                                  AQB Criteria sets forth the minimum                        sought.                                                 relevant representation of the appraiser
                                                education, experience and examination                          States may not accept an affidavit for                population being sampled.
                                                requirements applicable to all States for                    claimed qualifying education from
                                                credentialing of real property appraisers                    applicants for any federally recognized                 b. Minimum Standards
                                                (certified, licensed, trainee and                            credential.55 States must maintain                         (1) Validation must include a prompt
                                                supervisory). In the application process,                    adequate documentation to support                       post-approval audit. Each audit of an
                                                States must, at a minimum, employ a                          verification of education claimed by                    affidavit for continuing education credit
                                                reliable means of validating both                            applicants.                                             claimed must be completed within 60
                                                education and experience credit                                                                                      business days from the date the
                                                claimed by applicants for                                    C. Continuing Education for
                                                                                                             Reinstatement and Renewal                               credential is scheduled for renewal
                                                credentialing.54 Effective January 1,                                                                                (based on the credential’s expiration
                                                2017, AQB Criteria also requires States                      Applications
                                                                                                                                                                     date). To ensure the audit is a
                                                to assess whether an applicant for a real                    1. Reinstatement Applications                           statistically relevant representation, a
                                                property appraiser credential possesses                         States must verify that:                             sampling of credentials that were
                                                a background that would not call into                           (1) The applicant’s claimed                          renewed after the scheduled expiration
                                                question public trust. The basis for such                    continuing education courses are                        date and/or beyond the date the sample
                                                assessment shall be a matter left to the                     acceptable under AQB Criteria; and                      was selected, must also be audited to
                                                individual States, and must, at a                               (2) the applicant has successfully                   ensure that a credential holder may not
                                                minimum, be documented to the file.                          completed all continuing education                      avoid being selected for a continuing
                                                A. Processing of Applications                                consistent with AQB Criteria for                        education audit by renewing early or
                                                                                                             reinstatement of the appraiser credential               late.
                                                   States must process applications in a                     sought.                                                    (2) States must audit the continuing
                                                consistent, equitable and well-                                 States may not accept an affidavit for               education-related affidavit for each
                                                documented manner. Applications for                          continuing education claimed from                       credentialed appraiser selected in the
                                                credentialing should be timely                               applicants for reinstatement. Applicants                sampling procedure.
                                                processed by State agencies (within 90                       for reinstatement must submit                              (3) States must determine that
                                                calendar days after receipt of a                             documentation to support claimed                        education courses claimed conform to
                                                completed application). Any delay in                         continuing education and States must                    AQB Criteria and that the appraiser
                                                the processing of applications must be                       maintain adequate documentation to                      successfully completed each course.
                                                sufficiently documented in the file to                       support verification of claimed                            (4) When a State determines that an
                                                explain the delay. States must ensure                        education.                                              appraiser’s continuing education does
                                                appraiser credential applications                                                                                    not meet AQB Criteria, and the
                                                submitted for processing do not contain                      2. Renewal Applications                                 appraiser has failed to complete any
                                                invalid examinations as established by                         States must ensure that continuing                    remedial action offered, the State must
                                                AQB Criteria.                                                education courses for renewal of an                     take appropriate action to suspend the
                                                   States must obtain and maintain                           appraiser credential are consistent with                appraiser’s eligibility to perform
                                                sufficient relevant documentation                            AQB Criteria and that continuing                        appraisals in federally related
                                                pertaining to an application for                                                                                     transactions until such time that the
                                                issuance, upgrade and renewal of a                              55 If a State accepts education-related affidavits
                                                                                                                                                                     requisite continuing education has been
                                                credential so as to enable understanding                     from applicants for initial licensure in any non-       completed. The State must notify the
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                                                of the facts and determinations in the                       certified classification, upon the appraiser’s
                                                                                                             application to upgrade to a certified classification,   ASC within five (5) business days after
                                                  51 Id.
                                                                                                             the State must require documentation to support         taking such action in order for the
                                                  52 Id.
                                                                                                             the appraiser’s educational qualification for the       appraiser’s record on the Appraiser
                                                                                                             certified classification, not just the incremental      Registry to be updated appropriately.
                                                  53 Id.
                                                                                                             amount of education required to move from the
                                                   54 Includes applications for credentialing of             non-certified to the certified classification. This
                                                                                                                                                                        (5) If a State determines that a renewal
                                                trainee, licensed, certified residential or certified        requirement applies to all federally recognized         applicant knowingly falsely attested to
                                                general classifications.                                     credentials.                                            completing the continuing education


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                                                43974                    Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices

                                                required by AQB Criteria, the State must                 1. Validation Required                               is administered for each of the federally
                                                take appropriate administrative and/or                     States must implement a reliable                   recognized appraiser classifications
                                                disciplinary action and report such                      validation procedure to verify that each             requiring an examination.
                                                action, if deemed to be discipline, to the               applicant’s experience meets AQB                     F. Summary of Requirements
                                                ASC within five (5) business days.                       Criteria, including but not limited to,
                                                   (6) If more than ten percent of the                                                                        Processing of Applications
                                                                                                         being USPAP compliant and containing
                                                audited appraisers fail to meet the AQB                                                                          1. States must process applications in
                                                                                                         the required number of hours and
                                                Criteria, the State must take remedial                                                                        a consistent, equitable and well-
                                                                                                         months.
                                                action 56 to address the apparent                                                                             documented manner.58
                                                weakness of its affidavit process. The                   2. Validation Procedures, Objectives and                2. States must ensure appraiser
                                                ASC will determine on a case-by-case                     Requirements                                         credential applications submitted for
                                                basis whether remedial actions are                                                                            processing do not contain invalid
                                                                                                         a. Experience Hours Validation
                                                effective and acceptable.                                                                                     examinations as established by AQB
                                                   (7) In the case of a renewal being                      States must determine the hours and
                                                                                                                                                              Criteria.59
                                                processed after the credential’s                         time period claimed on the experience
                                                                                                                                                                 3. States must obtain and maintain
                                                expiration date, but within the State’s                  log are accurate. Appraiser Program staff
                                                                                                                                                              sufficient relevant documentation
                                                allowed grace period for a late renewal,                 or State board members must select the
                                                                                                                                                              pertaining to an application for
                                                the State must establish a reliable                      work product to validate the experience
                                                                                                                                                              issuance, upgrade or renewal of a
                                                process to audit affidavits for continuing               hours claimed; applicants may not have
                                                                                                                                                              credential so as to enable understanding
                                                education (e.g., requiring                               any role in this selection process.
                                                                                                                                                              of the facts and determinations in the
                                                documentation of all continuing
                                                                                                         b. USPAP Compliance                                  matter and the reasons for those
                                                education).
                                                                                                           States must analyze a representative               determinations.60
                                                c. Documentation                                         sample of the applicant’s work product               Education
                                                   States must maintain adequate                         for compliance with USPAP. For                         1. States must verify that the
                                                documentation to support its affidavit                   appraisal experience to be acceptable                applicant’s claimed education courses
                                                renewal and audit procedures and                         under AQB Criteria, it must be USPAP                 are acceptable under AQB Criteria,
                                                actions.                                                 compliant. States must exercise due                  whether for initial credentialing,
                                                d. List of Education Courses                             diligence in determining whether                     renewal, upgrade or reinstatement.61
                                                                                                         submitted documentation of experience                  2. States must verify that the
                                                  To promote accountability, the ASC                     or work product demonstrates
                                                encourages States accepting affidavits                                                                        applicant has successfully completed
                                                                                                         compliance with USPAP. Persons                       courses consistent with AQB Criteria for
                                                for continuing education credit claimed                  analyzing work product for USPAP
                                                for credential renewal to require that the                                                                    the appraiser credential sought, whether
                                                                                                         compliance must be knowledgeable                     for initial credentialing, renewal,
                                                appraiser provide a list of courses to                   about appraisal practice and USPAP,
                                                support the affidavit.                                                                                        upgrade or reinstatement.62
                                                                                                         and States must be able to document                    3. States must maintain adequate
                                                D. Experience for Initial or Upgrade                     how such persons are so qualified.                   documentation to support verification.63
                                                Applications                                             c. Determination of Experience Time                    4. States may not accept an affidavit
                                                   States must ensure that appraiser                     Periods                                              for education claimed from applicants
                                                experience logs conform to AQB                                                                                for any federally recognized
                                                                                                           Experience time periods must                       credential.64
                                                Criteria. States may not accept an
                                                                                                         conform to requirements set forth in the               5. States may not accept an affidavit
                                                affidavit for experience credit claimed
                                                                                                         AQB Criteria for the credential sought.              for continuing education claimed from
                                                by applicants for any federally
                                                recognized credential.57                                 d. Supporting Documentation                          applicants for reinstatement.65
                                                                                                                                                                6. States may accept affidavits for
                                                  56 For
                                                                                                           States must maintain adequate                      continuing education credit claimed for
                                                          example:
                                                   (1) A State may conduct an additional audit using
                                                                                                         documentation to support validation                  credential renewal so long as the State
                                                a higher percentage of audited appraisers; or            methods. The applicant’s file, either                implements a reliable validation
                                                   (2) a State may publicly post action taken to         electronic or paper, must include the                procedure.66
                                                sanction non-compliant appraisers to increase            information necessary to identify each                 7. Audits of affidavits for continuing
                                                awareness in the appraiser community of the
                                                importance of compliance with continuing
                                                                                                         appraisal assignment selected to                     education credit claimed must be
                                                education requirements.                                  validate the experience hours claimed                completed within sixty (60) business
                                                   57 See Policy Statement 1D and E for discussion       and each appraisal assignment analyzed               days from the date the credential is
                                                of ‘‘federally recognized credential’’ and ‘‘non-        by the State for USPAP compliance,                   scheduled for renewal (based on the
                                                federally recognized credential.’’ If prior to July 1,   notes, letters and/or reports prepared by
                                                2013, a State accepted experience-related affidavits                                                          credential’s expiration date).67
                                                from applicants for initial licensure in any non-        the official(s) evaluating the report for              8. In the case of a renewal being
                                                certified classification, upon the appraiser’s           USPAP compliance, and any                            processed after the credential’s
                                                application to upgrade to a certified classification,    correspondence exchanged with the
                                                the State must require experience documentation to
                                                support the appraiser’s qualification for the
                                                                                                         applicant regarding the appraisals                     58 Title XI § 1118(a), 12 U.S.C. 3347.
                                                certified classification, not just the incremental       submitted. This supporting                             59 Title XI § 1118(a), 12 U.S.C. 3347; AQB Real
                                                amount of experience required to move from the           documentation may be discarded upon                  Property Appraiser Qualification Criteria.
                                                non-certified to the certified classification. For                                                              60 Title XI § 1118(a), 12 U.S.C. 3347.
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                                                                                                         the completion of the first ASC
                                                example, if a State accepted an experience affidavit                                                            61 Id.
                                                from an appraiser to support the appraiser’s initial
                                                                                                         Compliance Review performed after the                  62 Id.
                                                hours to qualify for the licensed classification, and    credential issuance or denial for that                 63 Title XI § 1118(a), 12 U.S.C. 3347.
                                                subsequently that appraiser applies to upgrade to        applicant.                                             64 Id.
                                                the certified residential classification, the State
                                                                                                                                                                65 Id.
                                                must require documentation to support the full           E. Examination
                                                                                                                                                                66 Title XI § 1118(a), 12 U.S.C. 3347; AQB Real
                                                experience hours required for the certified
                                                residential classification, not just the difference in    States must ensure that an appropriate              Property Appraiser Qualification Criteria.
                                                hours between the two classifications.                   AQB-approved qualifying examination                    67 Title XI § 1118(a), 12 U.S.C. 3347.




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                                                                        Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices                                                 43975

                                                expiration date, but within the State’s                  documentation of experience or work                   Finding 84 of ‘‘Poor’’ do not satisfy the
                                                allowed grace period for a late renewal,                 product demonstrates compliance with                  ‘‘in compliance’’ provision for
                                                the State must establish a reliable                      USPAP on all initial or upgrade                       reciprocity. Therefore, States are not
                                                process to audit affidavits for continuing               applications for appraiser                            required to recognize, for purposes of
                                                education (e.g., requiring                               credentialing.77                                      granting a reciprocal credential, the
                                                documentation of all continuing                            7. Persons analyzing work product for               license or certification of an appraiser
                                                education).68                                            USPAP compliance must be                              credentialed in a State with an ASC
                                                   9. States are required to take remedial               knowledgeable about appraisal practice                Finding of ‘‘Poor.’’
                                                action when it is determined that more                   and USPAP, and States must be able to
                                                than ten percent of audited appraiser’s                                                                        B. Application of Reciprocity Policy
                                                                                                         document how such persons are so
                                                affidavits for continuing education                      qualified.78                                            The following examples illustrate
                                                credit claimed fail to meet the minimum                    8. Experience time periods must                     application of reciprocity in a manner
                                                AQB Criteria.69                                          conform to requirements set forth in the              that complies with Title XI. The
                                                   10. States are required to take                       AQB Criteria for the credential sought.79             examples refer to the reciprocity policy
                                                appropriate administrative and/or                                                                              requiring issuance of a reciprocal
                                                disciplinary action when it is                           Examination
                                                                                                                                                               credential IF:
                                                determined that an applicant knowingly                     1. States must ensure that an                         a. The appraiser is coming from a
                                                falsely attested to completing                           appropriate AQB-approved qualifying                   State that is ‘‘in compliance’’; AND
                                                continuing education.70                                  examination is administered for each of                 b. (i) the appraiser holds a valid
                                                   11. When a State determines that an                   the federally recognized credentials                  credential from that State; AND
                                                appraiser’s continuing education does                    requiring an examination.80                             (ii) the credentialing requirements of
                                                not meet AQB Criteria, and the                                                                                 that State (as they currently exist) meet
                                                                                                         Policy Statement 5
                                                appraiser has failed to complete any                                                                           or exceed those of the reciprocal
                                                remedial action offered, the State must                  Reciprocity                                           credentialing State (as they currently
                                                take appropriate action to suspend the                   A. Reciprocity Policy                                 exist).
                                                appraiser’s eligibility to perform
                                                                                                            Title XI contemplates the reasonably               Example 1. Additional Requirements
                                                appraisals in federally related
                                                                                                         free movement of certified and licensed               Imposed on Applicants
                                                transactions until such time that the
                                                requisite continuing education has been                  appraisers across State lines. The ASC                   State A requires that prior to issuing
                                                completed. The State must notify the                     monitors Appraiser Programs for                       a reciprocal credential the applicant
                                                ASC within five (5) business days after                  compliance with the reciprocity                       must certify that disciplinary
                                                taking such action in order for the                      provision of Title XI as amended by the               proceedings are not pending against that
                                                appraiser’s record on the Appraiser                      Dodd-Frank Act.81 Title XI requires that              applicant in any jurisdiction. Under
                                                Registry to be updated appropriately.71                  in order for a State’s appraisers to be               b.(ii) above, if this requirement is not
                                                                                                         eligible to perform appraisals for                    imposed on all of its own applicants for
                                                Experience                                               federally related transactions, the State             credentialing, STATE A cannot impose
                                                  1. States may not accept an affidavit                  must have a policy in place for issuing               this requirement on applicants for
                                                for experience credit claimed from                       reciprocal credentials IF:                            reciprocal credentialing.
                                                applicants for any federally recognized                     a. The appraiser is coming from a
                                                credential.72                                            State (Home State) that is ‘‘in                       Example 2. Credentialing Requirements
                                                  2. States must ensure that appraiser                   compliance’’ with Title XI as                           An appraiser is seeking a reciprocal
                                                experience logs conform to AQB                           determined by the ASC; AND                            credential in STATE A. The appraiser
                                                Criteria.73                                                 b. (i) the appraiser holds a valid                 holds a valid credential in STATE Z,
                                                  3. States must use a reliable means of                 credential from the Home State; AND                   even though it was issued in 2007. This
                                                validating appraiser experience claims                      (ii) the credentialing requirements of             satisfies b.(i) above. However, in order
                                                on all initial or upgrade applications for               the Home State 82 meet or exceed those                to satisfy b.(ii), STATE A would
                                                appraiser credentialing.74                               of the reciprocal credentialing State                 evaluate STATE Z’s credentialing
                                                  4. States must select the work product                 (Reciprocal State).83                                 requirements as they currently exist to
                                                to validate the experience hours claimed                    An appraiser relying on a credential               determine whether they meet or exceed
                                                on all initial or upgrade applications for               from a State that does not have such a                STATE A’s current requirements for
                                                appraiser credentialing.75                               policy in place may not perform                       credentialing.
                                                  5. States must analyze a                               appraisals for federally related
                                                representative sample of the applicant’s                 transactions. A State may be more                     Example 3. Multiple State Credentials
                                                work product for compliance with                         lenient in the issuance of reciprocal                    An appraiser credentialed in several
                                                USPAP on all initial or upgrade                          credentials by implementing a more                    States is seeking a reciprocal credential
                                                applications for appraiser                               open door policy. However, States                     in State A. That appraiser’s initial
                                                credentialing.76                                         cannot impose additional impediments                  credentials were obtained through
                                                  6. States must exercise due diligence                  to obtaining reciprocal credentials.                  examination in the original
                                                in determining whether submitted                            For purposes of implementing the                   credentialing State and through
                                                                                                         reciprocity policy, States with an ASC                reciprocity in the additional States.
                                                  68 Id.
                                                                                                                                                               State A requires the applicant to provide
                                                  69 Id.
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                                                                                                           77 Id.
                                                  70 Id.
                                                                                                                                                               a ‘‘letter of good standing’’ from the
                                                                                                           78 Id.
                                                  71 Id.                                                   79 Title XI § 1118(a), 12 U.S.C. 3347; AQB Real
                                                                                                                                                               State of original credentialing as a
                                                  72 Id.                                                 Property Appraiser Qualification Criteria.            condition of granting a reciprocal
                                                  73 Title XI § 1118(a), 12 U.S.C. 3347; AQB Real          80 Id.                                              credential. State A may not impose such
                                                Property Appraiser Qualification Criteria.                 81 Title XI § 1122(b), 12 U.S.C. 3351.              a requirement since Title XI does not
                                                  74 Title XI § 1118(a), 12 U.S.C. 3347.                   82 As they exist at the time of application for
                                                  75 Title XI § 1118(a), 12 U.S.C. 3347.                 reciprocal credential.                                  84 See Appendix A, Compliance Review Process,
                                                  76 Id.                                                   83 Id.                                              for an explanation of ASC Findings.



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                                                43976                   Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices

                                                distinguish between credentials                         A. Course Approval                                    approval of course design and
                                                obtained by examination and                               States must ensure that approved                    delivery.92
                                                credentials obtained by reciprocity for                 appraiser education courses are                       Policy Statement 7
                                                purposes of granting reciprocal                         consistent with AQB Criteria and
                                                credentials.                                            maintain sufficient documentation to                  State Agency Enforcement
                                                C. Appraiser Compliance Requirements                    support that approved appraiser                       A. State Agency Regulatory Program
                                                                                                        education courses conform to AQB
                                                  In order to maintain a credential                     Criteria.                                                Title XI requires the ASC to monitor
                                                granted by reciprocity, appraisers must                   States should ensure that course                    the States for the purpose of
                                                comply with the credentialing State’s                   approval expiration dates assigned by                 determining whether the State processes
                                                policies, rules and statutes governing                  the State coincide with the endorsement               complaints and completes
                                                appraisers, including requirements for                  period assigned by the AQB’s Course                   investigations in a reasonable time
                                                payment of certification and licensing                  Approval Program or any other AQB-                    period, appropriately disciplines
                                                fees, as well as continuing education.85                approved organization providing                       sanctioned appraisers and maintains an
                                                D. Well-Documented Application Files                    approval of course design and delivery.               effective regulatory program.93
                                                                                                        States may not continue to accept AQB                 B. Enforcement Process
                                                  States must obtain and maintain
                                                                                                        approved courses after the AQB’s
                                                sufficient relevant documentation                                                                                States must ensure that the system for
                                                                                                        expiration date unless the course
                                                pertaining to an application for issuance                                                                     processing and investigating
                                                                                                        content is reviewed and approved by
                                                of a credential by reciprocity so as to                                                                       complaints 94 and sanctioning
                                                                                                        the State.
                                                enable understanding of the facts and                                                                         appraisers is administered in a timely,
                                                                                                          States should ensure that educational
                                                determinations in the matter and the                                                                          effective, consistent, equitable, and
                                                                                                        providers are afforded equal treatment
                                                reasons for those determinations.                                                                             well-documented manner.
                                                                                                        in all respects.89
                                                E. Summary of Requirements                                States are encouraged to accept                     1. Timely Enforcement
                                                                                                        courses approved by the AQB’s Course
                                                   1. States must have a reciprocity                                                                             States must process complaints of
                                                                                                        Approval Program.
                                                policy in place for issuing a reciprocal                                                                      appraiser misconduct or wrongdoing in
                                                credential to an appraiser from another                 B. Distance Education                                 a timely manner to ensure effective
                                                State under the conditions specified in                                                                       supervision of appraisers, and when
                                                                                                          States must ensure that distance
                                                Title XI in order for the State’s                                                                             appropriate, that incompetent or
                                                                                                        education courses meet AQB Criteria
                                                appraisers to be eligible to perform                                                                          unethical appraisers are not allowed to
                                                                                                        and that the delivery mechanism for
                                                appraisals for federally related                                                                              continue their appraisal practice.
                                                                                                        distance education courses offered by a
                                                transactions.86                                                                                               Absent special documented
                                                                                                        non-academic provider, including
                                                   2. States may be more lenient in the                 secondary providers, has been approved                circumstances, final administrative
                                                issuance of reciprocal credentials by                   by an AQB-approved organization                       decisions regarding complaints must
                                                implementing a more open door policy;                   providing approval of course design and               occur within one year (12 months) of
                                                however, States may not impose                          delivery.                                             the complaint filing date. 95 Special
                                                additional impediments to issuance of                     States may not continue to accept                   documented circumstances are those
                                                reciprocal credentials.87                               courses after the AQB-approved                        extenuating circumstances (fully
                                                   3. States must obtain and maintain                   organization’s approval of course design              documented) beyond the control of the
                                                sufficient relevant documentation                       and delivery date has expired.                        State agency that delays normal
                                                pertaining to an application for issuance                                                                     processing of a complaint such as:
                                                of a credential by reciprocity so as to                 C. Summary of Requirements                            complaints involving a criminal
                                                enable understanding of the facts and                     1. States must ensure that appraiser                investigation by a law enforcement
                                                determinations in the matter and the                    education courses are consistent with                 agency when the investigative agency
                                                reasons for those determinations.88                     AQB Criteria.90                                       requests that the State refrain from
                                                Policy Statement 6                                        2. States must maintain sufficient                  proceeding; final disposition that has
                                                                                                        documentation to support that approved                been appealed to a higher court;
                                                Education                                               appraiser courses conform to AQB                      documented medical condition of the
                                                  AQB Criteria sets forth minimum                       Criteria.91                                           respondent; ancillary civil litigation;
                                                requirements for appraiser education                      3. States must ensure the delivery                  and complex cases that involve multiple
                                                courses. This Policy Statement                          mechanism for distance education                      individuals and reports. Such special
                                                addresses proper administration of                      courses offered by a non-academic                     documented circumstances also include
                                                education requirements for compliance                   provider, including secondary                         those periods when State rules require
                                                with AQB Criteria. (For requirements                    providers, has been approved by an                    referral of a complaint to another State
                                                concerning qualifying and continuing                    AQB-approved organization providing                   entity for review and the State agency is
                                                education in the application process,                                                                         precluded from further processing of the
                                                see Policy Statement 4, Application                       89 For example:                                     complaint until it is returned. In that
                                                Process.)                                                 (1) Consent agreements requiring additional         circumstance, the State agency should
                                                                                                        education should not specify a particular course      document the required referral and the
                                                                                                        provider when there are other providers on the
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                                                  85 A State may offer to accept continuing             State’s approved course listing offering the same
                                                education (CE) for a renewal applicant who has          course; and                                             92 Title XI § 1118(a), 12 U.S.C. 3347; AQB Real

                                                satisfied CE requirements of a home State; however,       (2) courses from professional organizations         Property Appraiser Qualification Criteria.
                                                a State may not impose this as a requirement for        should not be automatically approved and/or             93 Title XI § 1118(a), 12 U.S.C. 3347.
                                                renewal, thereby imposing a requirement for the         approved in a manner that is less burdensome than       94 See Appendix B, Glossary of Terms, for the
                                                renewal applicant to retain a home State credential.    the State’s normal approval process.                  definition of ‘‘complaint.’’
                                                  86 Title XI § 1122(b), 12 U.S.C. 3351.                  90 Title XI § 1118(a), 12 U.S.C. 3347; AQB Real       95 The one-year period for resolution of
                                                  87 Id.                                                Property Appraiser Qualification Criteria.            complaints is not intended to have the impact of a
                                                  88 Title XI § 1118(a), 12 U.S.C. 3347.                  91 Title XI § 1118(a), 12 U.S.C. 3347.              statute of limitation or statute of repose.



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                                                                           Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices                                                        43977

                                                time period during which the complaint                         • contain documentation that all                       complaints and sanctioning appraisers
                                                was not under its control or authority.                     ordered or agreed upon discipline, such                   is administered in an effective,
                                                                                                            as probation, fine, or completion of                      consistent, equitable, and well-
                                                2. Effective Enforcement
                                                                                                            education is tracked and that                             documented manner.99
                                                   Effective enforcement requires that                      completion of all terms is confirmed;                        4. States must track complaints of
                                                States investigate allegations of                           and                                                       alleged appraiser misconduct or
                                                appraiser misconduct or wrongdoing,                            • be organized in a manner that                        wrongdoing using a complaint log.100
                                                and if allegations are proven, take                         allows understanding of the steps taken                      5. States must appropriately
                                                appropriate disciplinary or remedial                        throughout the complaint, investigation,                  document enforcement files and include
                                                action. Dismissal of an alleged violation                   and adjudicatory process.                                 rationale.101
                                                solely due to an ‘‘absence of harm to the                                                                                6. States must regulate, supervise and
                                                                                                            b. Complaint Logs
                                                public’’ is inconsistent with Title XI.                                                                               discipline their credentialed
                                                Financial loss or the lack thereof is not                      States must track all complaints using                 appraisers.102
                                                an element in determining whether                           a complaint log. The complaint log must                      7. Persons analyzing complaints for
                                                there is a violation. The extent of such                    record all complaints, regardless of their                USPAP compliance must be
                                                loss, however, may be a factor in                           procedural status in the investigation                    knowledgeable about appraisal practice
                                                determining the appropriate level of                        and/or resolution process, including                      and USPAP, and States must be able to
                                                discipline.                                                 complaints pending before the State                       document how such persons are so
                                                   Persons analyzing complaints for                         board, Office of the Attorney General,                    qualified.103
                                                USPAP compliance must be                                    other law enforcement agencies, and/or
                                                                                                            offices of administrative hearings.                       Part B: AMC Program
                                                knowledgeable about appraisal practice
                                                and USPAP and States must be able to                           The complaint log must include the                     Policy Statement 8
                                                document how such persons are so                            following information (States are
                                                                                                            strongly encouraged to maintain this                      Statutes, Regulations, Policies and
                                                qualified.                                                                                                            Procedures Governing State AMC
                                                   States must analyze each complaint to                    information in an electronic, sortable
                                                                                                            format):                                                  Programs
                                                determine whether additional
                                                violations, especially those relating to                    1. Case number                                            A. Participating States and ASC
                                                USPAP, should be added to the                               2. Name of respondent                                     Oversight
                                                complaint.                                                  3. Actual date the complaint was
                                                                                                                 received by the State                                  States are not required to establish an
                                                   Closure of a complaint based solely                                                                                AMC registration and supervision
                                                                                                            4. Source of complaint (e.g., consumer,
                                                on a State’s statute of limitations that                                                                              program. For those States electing to
                                                                                                                 lender, AMC, bank regulator,
                                                results in dismissal of a complaint                                                                                   participate in the registration and
                                                                                                                 appraiser, hotline) or name of
                                                without the investigation of the merits                                                                               supervision of AMCs (participating
                                                                                                                 complainant
                                                of the complaint is inconsistent with the                   5. Current status of the complaint                        States), ASC staff will informally
                                                Title XI requirement that States assure                     6. Date the complaint was closed (e.g.,                   monitor the State’s progress to
                                                effective supervision of the activities of                       final disposition by the                             implement the requirements of Title XI
                                                credentialed appraisers.96                                       administrative hearing agency,                       and the AMC Rule.104 Formal ASC
                                                3. Consistent and Equitable Enforcement                          Office of the Attorney General, State                oversight of State AMC Programs will
                                                                                                                 Appraiser Regulatory Agency or                       begin at the next regularly scheduled
                                                  Absent specific documented facts or                            Court of Appeals)                                    Compliance Review of a State after the
                                                considerations, substantially similar                       7. Method of disposition (e.g., dismissal,                following occurs:
                                                cases within a State should result in                            letter of warning, consent order,                      1. A State decides to be a participating
                                                similar dispositions.                                            final order)                                         State pursuant to the AMC Rule;
                                                4. Well-Documented Enforcement                              8. Terms of disposition (e.g., probation,                   2. A State establishes an AMC
                                                                                                                 fine, education, mentorship)                         program in accordance with the AMC
                                                  States must obtain and maintain                           9. In the case of open complaints, the                    Rule; and
                                                sufficient relevant documentation                                most recent activity and date                          3. A State begins reporting to the
                                                pertaining to a matter so as to enable                           thereof (e.g. respondent’s response                  National Registry of AMCs (AMC
                                                understanding of the facts and                                   to complaint received, contacted                     Registry).
                                                determinations in the matter and the                             Attorney General for a status                          Formal ASC oversight will consist of
                                                reasons for those determinations.                                update, Board voted to offer a                       evaluating AMC Programs in
                                                a. Complaint Files                                               consent agreement)                                   participating States during the
                                                                                                                                                                      Compliance Review process to
                                                  Complaint files must:                                     C. Summary of Requirements
                                                                                                                                                                      determine compliance or lack thereof
                                                  • Include documentation outlining                            1. States must maintain relevant                       with Title XI, and to assess
                                                the progress of the investigation;                          documentation to enable understanding                     implementation of the minimum
                                                  • demonstrate that appraisal reports                      of the facts and determinations in the                    requirements for State registration and
                                                are analyzed and any USPAP violations                       matter and the reasons for those                          supervision of AMCs as established by
                                                are identified and considered, whether                      determinations.97
                                                or not they were the subject of the                            2. States must resolve all complaints                    99 Id.
                                                complaint;                                                  filed against appraisers within one year                    100 Id.
                                                  • include rationale for the final
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                                                                                                            (12 months) of the complaint filing date,                   101 Id.

                                                outcome of the case (i.e., dismissal or                     except for special documented                               102 Id.

                                                imposition of discipline);                                  circumstances.98                                            103 Id.

                                                  • include documentation explaining                           3. States must ensure that the system                    104 Title XI § 1103(a)(1)(B), 12 U.S.C. 3332. AMC

                                                any delay in processing, investigation or                                                                             Rule means the interagency final rule on minimum
                                                                                                            for processing and investigating                          requirements for State registration and supervision
                                                adjudication;                                                                                                         of AMCs (12 CFR 34.210–34.216; 12 CFR 225.190–
                                                                                                              97 Title   XI § 1118(a), 12 U.S.C. 3347.                225.196; 12 CFR 323.8–323.14; 12 CFR 1222.20–
                                                  96 Title   XI § 1117, 12 U.S.C. 3346.                       98 Id.                                                  1222.26.



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                                                43978                   Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices

                                                the AMC Rule. Upon expiration of the                    State will be required to comply with                    designed to ensure that the AMC
                                                statutory implementation period (see                    the minimum requirements set forth in                    conducts its appraisal management
                                                Policy Statement 11, Statutory                          the AMC Rule. States should refer to the                 services in accordance with the
                                                Implementation Period), Compliance                      AMC Rule for compliance                                  requirements of section 129E(a) through
                                                Reviews will include ASC oversight of                   requirements 106 as this Policy                          (i) of the Truth in Lending Act, 15
                                                AMC Programs for any participating                      Statement merely summarizes what the                     U.S.C. 1639e(a) through (i), and
                                                State.                                                  AMC Rule requires of participating                       regulations thereunder.
                                                                                                        States.
                                                B. Relation to State Law                                                                                         2. Ownership Limitations for State-
                                                                                                           (a) The AMC Rule includes
                                                  Participating States may establish                                                                             Registered AMCs
                                                                                                        requirements for participating States to
                                                requirements in addition to those in the                establish and maintain within the State                  A. Appraiser Certification or Licensing
                                                AMC Rule.                                               appraiser certifying and licensing                       of Owners
                                                  Participating States may also have a                  agency an AMC Program with the legal                        An AMC subject to State registration
                                                more expansive definition of AMCs.105                   authority and mechanisms to:                             shall not be registered by a State or
                                                However, if a participating State has a                    (1) Review and approve or deny AMC                    included on the AMC Registry if such
                                                more expansive definition of AMCs than                  initial registration applications and/or                 AMC, in whole or in part, directly or
                                                in Title XI (thereby encompassing State                 renewals for registration;                               indirectly, is owned by any person who
                                                regulation of AMCs that are not within                     (2) Examine records of AMCs and                       has had an appraiser license or
                                                the Title XI definition of AMC), the                    require AMCs to submit information;                      certificate refused, denied, cancelled,
                                                State must ensure such AMCs are                            (3) Verify that appraisers on AMCs’                   surrendered in lieu of revocation, or
                                                identified as such in the State database,               panels hold valid State credentials;                     revoked in any State for a substantive
                                                just as States currently do for non-                       (4) Conduct investigations of AMCs to
                                                                                                                                                                 cause,108 as determined by the State
                                                federally recognized credentials or                     assess potential violations of appraisal-
                                                                                                                                                                 appraiser certifying and licensing
                                                designations. Only those AMCs that                      related laws, regulations, or orders;
                                                                                                                                                                 agency. A State’s process for review
                                                meet the Federal definition of AMC will                    (5) Discipline, suspend, terminate, or
                                                                                                                                                                 could, for example, be by questionnaire,
                                                be eligible to be on the AMC Registry.                  deny renewal of the registration of an
                                                                                                                                                                 or affidavit, or background screening, or
                                                                                                        AMC that violates appraisal-related
                                                C. Funding and Staffing                                                                                          otherwise. States must document to the
                                                                                                        laws, regulations, or orders; and
                                                   The Dodd-Frank Act amended Title                                                                              file the State’s method of review and the
                                                                                                           (6) Report an AMC’s violation of
                                                XI to require the ASC to determine                                                                               result.
                                                                                                        appraisal-related laws, regulations, or
                                                whether participating States have                       orders, as well as disciplinary and                      B. Good Moral Character of Owners
                                                sufficient funding and staffing to meet                 enforcement actions and other relevant                      An AMC shall not be registered by a
                                                their Title XI requirements. Compliance                 information about an AMC’s operations,                   State if any person that owns more than
                                                with this provision requires that a State               to the ASC.                                              10 percent of the AMC—
                                                must provide its AMC Program with                          (b) The AMC Rule includes                                (1) Is determined by the State not to
                                                funding and staffing sufficient to carry                requirements for participating States to                 have good moral character; or
                                                out its Title XI-related duties. The ASC                impose requirements on AMCs that are                        (2) Fails to submit to a background
                                                evaluates the sufficiency of funding and                not Federally regulated AMCs 107 to:                     investigation carried out by the State.
                                                staffing as part of its review of all                      (1) Register with and be subject to                      A State’s process for review could, for
                                                aspects of an AMC Program’s                             supervision by the State appraiser                       example, be by questionnaire, or
                                                effectiveness, including the adequacy of                certifying and licensing agency;                         affidavit, or background screening, or
                                                State boards, committees, or                               (2) Engage only State-certified or                    otherwise. The ASC would expect
                                                commissions responsible for carrying                    State-licensed appraisers for federally                  written documentation of the State’s
                                                out Title XI-related duties.                            related transactions in conformity with                  method of review and the result.
                                                                                                        any federally related transaction
                                                D. Minimum Requirements for
                                                                                                        regulations;                                             3. Requirements for Federally Regulated
                                                Registration and Supervision of AMCs
                                                                                                           (3) Establish and comply with                         AMCs
                                                as Established by the AMC Rule
                                                                                                        processes and controls reasonably                          Participating States are not required to
                                                1. AMC Registration and Supervision                     designed to ensure that the AMC, in                      identify Federally regulated AMCs 109
                                                   If a State chooses to participate in the             engaging an appraiser, selects an                        operating in their States, but rather the
                                                registration and supervision of AMCs in                 appraiser who is independent of the                      Federal financial institution regulatory
                                                accordance with the AMC Rule, the                       transaction and who has the requisite                    agencies are responsible for requiring
                                                                                                        education, expertise, and experience                     such AMCs to identify themselves to
                                                   105 Title XI as amended by the Dodd-Frank Act        necessary to competently complete the                    participating States and report required
                                                defines ‘‘appraisal management company’’ to mean,       appraisal assignment for the particular                  information.
                                                in part, an external third party that oversees a        market and property type;
                                                network or panel of more than 15 appraisers (State                                                                 A Federally regulated AMC shall not
                                                certified or licensed) in a State, or 25 or more
                                                                                                           (4) Direct the appraiser to perform the               be included on the AMC Registry if such
                                                appraisers nationally (two or more States) within a     assignment in accordance with USPAP;                     AMC, in whole or in part, directly or
                                                given year. (12 U.S.C. 3350(11).) Title XI as           and                                                      indirectly, is owned by any person who
                                                amended by the Dodd-Frank Act also allows States           (5) Establish and comply with
                                                to adopt requirements in addition to those in the
                                                AMC Rule. (12 U.S.C. 3353(b).) For example, States
                                                                                                        processes and controls reasonably                          108 An AMC subject to State registration is not
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                                                may decide to supervise entities that provide                                                                    barred from being registered by a State or included
                                                                                                          106 See footnote 107.                                  on the AMC Registry of AMCs if the license or
                                                appraisal management services, but do not meet the
                                                size thresholds of the Title XI definition of AMC.        107 ‘‘Federallyregulated AMCs,’’ meaning AMCs          certificate of the appraiser with an ownership
                                                If a State has a more expansive regulatory              that are subsidiaries owned and controlled by an         interest was not revoked for a substantive cause and
                                                framework that covers entities that provide             insured depository institution or an insured credit      has been reinstated by the State or States in which
                                                appraisal management services but do not meet the       union and regulated by a Federal financial               the appraiser was licensed or certified. (12 CFR
                                                Title XI definition of AMC, the State should only       institutions regulatory agency, are not required to      34.210–34.216; 12 CFR 225.190–225.196; 12 CFR
                                                submit information regarding AMCs meeting the           register with the State (Title XI § 1124(c), 12 U.S.C.   323.8–323.14; 12 CFR 1222.20–1222.26.)
                                                Title XI definition to the AMC Registry.                3353(c)).                                                  109 See footnote 107.




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                                                                         Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices                                                       43979

                                                has had an appraiser license or                          States will pay a registry fee in multiple            designate a senior official, such as an
                                                certificate refused, denied, cancelled,                  States in order to be on the AMC                      executive director, to serve as the State’s
                                                surrendered in lieu of revocation, or                    Registry for each State.                              Authorized Registry Official, and
                                                revoked in any State for a substantive                     States must notify the ASC as soon as               provide to the ASC, in writing,
                                                cause, as determined by the ASC.                         practicable if an AMC listed on the                   information regarding the designated
                                                                                                         AMC Registry is no longer registered                  Authorized Registry Official. States
                                                E. Summary of Requirements                               with or operating in the State. The ASC               must ensure that the authorization
                                                   1. Participating States must establish                extranet application allows States to                 information provided to the ASC is
                                                and maintain an AMC Program with the                     update their AMC information directly                 updated and accurate. States must adopt
                                                legal authority and mechanisms                           to the AMC Registry.                                  and implement a written policy to
                                                consistent with the AMC Rule.110
                                                   2. Participating States must impose                   B. Registry Fee and Invoicing Policies                protect the right of access, as well as the
                                                requirements on AMCs consistent with                       Each State must remit to the ASC the                ASC issued User Name and Password.
                                                the AMC Rule.111                                         annual registry fee, as set by the ASC,               E. Summary of Requirements
                                                   3. Participating States must enforce                  for AMCs to be listed on the AMC
                                                and document ownership limitations for                   Registry. Requests to prorate refunds or                 1. States must reconcile and pay
                                                State-registered AMCs.112                                partial-year registrations will not be                registry invoices in a timely manner (45
                                                   4. Only those AMCs that meet the                      granted. If a State collects multiple-year            calendar days after receipt of the
                                                Federal definition of AMC will be                        fees for multiple-years, the State may                invoice).119
                                                eligible to be on the AMC Registry.                      choose to remit to the ASC the total                     2. State agencies must report all
                                                Therefore, participating States that have                amount of the multiple-year registry fees             disciplinary action taken against an
                                                a more expansive definition of AMCs                      or the equivalent annual fee amount.
                                                than in the AMC Rule must ensure such                                                                          AMC to the ASC via the extranet
                                                                                                         The ASC will, however, record AMCs
                                                non-Federally recognized AMCs are                                                                              application within 5 business days after
                                                                                                         on the AMC Registry only for the
                                                identified as such in the State                                                                                the disciplinary action is final, as
                                                                                                         number of years for which the ASC has
                                                database.113                                             received payment. States must reconcile               determined by State law.120
                                                  5. States must have funding and                        and pay registry invoices in a timely                    3. States not reporting via the extranet
                                                staffing sufficient to carry out their Title             manner (45 calendar days after receipt                application must provide, in writing to
                                                XI-related duties.114                                    of the invoice).                                      the ASC, a description of the
                                                Policy Statement 9                                                                                             circumstances preventing compliance
                                                                                                         C. Reporting Requirements
                                                                                                                                                               with this requirement.121
                                                National Registry of AMCs (AMC                             State agencies must report all
                                                                                                                                                                  4. For the most serious disciplinary
                                                Registry)                                                disciplinary action 118 taken against an
                                                                                                         AMC to the ASC via the extranet                       actions (e.g., any action that interrupts
                                                A. Requirements for the AMC Registry                                                                           an AMC’s ability to provide appraisal
                                                                                                         application within 5 business days after
                                                   Title XI requires the ASC to maintain                 the disciplinary action is final, as                  management services), the AMC’s status
                                                the AMC Registry of AMCs that are                        determined by State law. States not                   must be changed on the AMC Registry
                                                either registered with and subject to                    reporting via the extranet application                to ‘‘inactive.’’ 122
                                                supervision of a participating State or                  must provide, in writing to the ASC, a                   5. States must notify the ASC as soon
                                                are operating subsidiaries of a Federally                description of the circumstances                      as practicable if an AMC listed on the
                                                regulated financial institution.115 Title                preventing compliance with this                       AMC Registry is no longer registered
                                                XI further requires the States to transmit               requirement. For the most serious                     with or operating in the State.
                                                to the ASC: (1) Reports on a timely basis                disciplinary actions (e.g., any action that
                                                of supervisory activities involving                                                                               6. States must designate a senior
                                                                                                         interrupts an AMCs ability to provide
                                                AMCs, including investigations                                                                                 official, such as an executive director,
                                                                                                         appraisal management services), the
                                                resulting in disciplinary action being                   AMCs status must be changed on the                    who will serve as the State’s Authorized
                                                taken; and (2) the registry fee as set by                AMC Registry to ‘‘inactive.’’ A Federally             Registry Official, and provide to the
                                                the ASC 116 from AMCs that are either                    regulated AMC operating in a State must               ASC, in writing, information regarding
                                                registered with a participating State or                 report to the State the information                   the selected Authorized Registry
                                                are Federally regulated AMCs.117                         required to be submitted by the State to              Official, and any individual(s)
                                                  As with appraiser registry fees, Title                 the ASC, pursuant to the ASC’s policies               authorized to act on their behalf.123
                                                XI, § 1109(a)(4)(b) requires the AMC                     regarding the determination of the AMC                   7. States must adopt and implement a
                                                registry fee to be collected by each                     Registry fee.                                         written policy to protect the right of
                                                participating State and transmitted to
                                                                                                         D. Access to AMC Registry Data                        access to the AMC Registry, as well as
                                                the ASC. Therefore, as with appraisers,
                                                                                                                                                               the ASC issued User Name and
                                                an AMC will pay a registry fee in each                     The ASC Web site provides free
                                                participating State in which the AMC                                                                           Password.124
                                                                                                         access to the public portion of the AMC
                                                operates. As with appraisers, an AMC                     Registry at www.asc.gov. The public                      8. States must ensure the accuracy of
                                                operating in multiple participating                      portion of the AMC Registry data may                  all data submitted to the AMC
                                                                                                         be downloaded using predefined                        Registry.125
                                                  110 12 CFR 34.210–34.216; 12 CFR 225.190–
                                                                                                         queries or user-customized applications.
                                                225.196; 12 CFR 323.8–323.14; 12 CFR 1222.20–
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                                                1222.26.
                                                                                                           Access to the full database, which                     119 Title XI § 1118(a), 12 U.S.C. 3347; Title XI

                                                  111 Id.                                                includes non-public data (e.g., certain               § 1109(a), 12 U.S.C. 3338.
                                                                                                                                                                  120 Title XI § 1118(a), 12 U.S.C. 3347.
                                                  112 Id.                                                disciplinary action information), is
                                                                                                                                                                  121 Id.
                                                  113 Title XI § 1118(b), 12 U.S.C. 3347.                restricted to authorized State and
                                                                                                                                                                  122 Id.
                                                  114 Id.                                                Federal regulatory agencies. States must
                                                  115 Title XI § 1103(a)(6), 12 U.S.C. 3332.                                                                      123 Id.

                                                  116 Title XI § 1109(a)(4), 12 U.S.C. 3338.               118 See Appendix B, Glossary of Terms, for the         124 Id.

                                                  117 Title XI § 1109(a)(3) and (4), 12 U.S.C. 3338.     definition of ‘‘disciplinary action.’’                   125 Id.




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                                                43980                   Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices

                                                Policy Statement 10                                     3. Consistent and Equitable Enforcement                     thereof (e.g. respondent’s response
                                                                                                           Absent specific documented facts or                      to complaint received, contacted
                                                State Agency Enforcement
                                                                                                        considerations, substantially similar                       Attorney General for a status
                                                A. State Agency Regulatory Program                      cases within a State should result in                       update, Board voted to offer a
                                                                                                        similar dispositions.                                       consent agreement)
                                                   Title XI requires the ASC to monitor
                                                the States for the purpose of                           4. Well-Documented Enforcement                        C. Summary of Requirements
                                                determining whether the State processes
                                                                                                           States must obtain and maintain                       1. States must maintain relevant
                                                complaints and completes
                                                                                                        sufficient relevant documentation                     documentation to enable understanding
                                                investigations in a reasonable time
                                                                                                        pertaining to a matter so as to enable                of the facts and determinations in the
                                                period, appropriately disciplines
                                                                                                        understanding of the facts and                        matter and the reasons for those
                                                sanctioned AMCs and maintains an
                                                                                                        determinations in the matter and the                  determinations.129
                                                effective regulatory program.126
                                                                                                        reasons for those determinations.                        2. States must resolve all complaints
                                                B. Enforcement Process                                                                                        filed against appraisers within one year
                                                                                                        a. Complaint Files
                                                  States must ensure that the system for                                                                      (12 months) of the complaint filing date,
                                                                                                           Complaint files must:                              except for special documented
                                                processing and investigating                               • Include documentation outlining
                                                complaints 127 and sanctioning AMCs is                                                                        circumstances.130
                                                                                                        the progress of the investigation;                       3. States must ensure that the system
                                                administered in a timely, effective,                       • include rationale for the final
                                                consistent, equitable, and well-                                                                              for processing and investigating
                                                                                                        outcome of the case (i.e., dismissal or               complaints and sanctioning AMCs is
                                                documented 128 manner.                                  imposition of discipline);                            administered in an effective, consistent,
                                                1. Timely Enforcement                                      • include documentation explaining                 equitable, and well-documented
                                                                                                        any delay in processing, investigation or             manner.131
                                                  States must process complaints                        adjudication;
                                                against AMCs in a timely manner to                         • contain documentation that all                      4. States must track complaints of
                                                ensure effective supervision of AMCs.                   ordered or agreed upon discipline is                  alleged appraiser misconduct or
                                                Absent special documented                               tracked and that completion of all terms              wrongdoing using a complaint log.132
                                                circumstances, final administrative                     is confirmed; and                                        5. States must appropriately
                                                decisions regarding complaints must                        • be organized in a manner that                    document enforcement files and include
                                                occur within one year (12 months) of                    allows understanding of the steps taken               rationale.133
                                                the complaint filing date. Special                      throughout the complaint, investigation,              Policy Statement 11
                                                documented circumstances are those                      and adjudicatory process.
                                                extenuating circumstances (fully                                                                              Statutory Implementation Period
                                                documented) beyond the control of the                   b. Complaint Logs
                                                                                                                                                                 Title XI and the AMC Rule set forth
                                                State agency that delays normal                            States must track all complaints using
                                                                                                                                                              the statutory implementation period.134
                                                processing of a complaint such as:                      a complaint log. The complaint log must
                                                                                                                                                              The AMC Rule was effective on August
                                                Complaints involving a criminal                         record all complaints, regardless of their
                                                                                                                                                              10, 2015. As of 36 months from that date
                                                investigation by a law enforcement                      procedural status in the investigation
                                                                                                                                                              (August 10, 2018), an AMC may not
                                                agency when the investigative agency                    and/or resolution process, including
                                                                                                                                                              provide appraisal management services
                                                requests that the State refrain from                    complaints pending before the State
                                                                                                                                                              for a federally related transaction in a
                                                proceeding; final disposition that has                  board, Office of the Attorney General,
                                                                                                                                                              non-participating State unless the AMC
                                                been appealed to a higher court;                        other law enforcement agencies, and/or
                                                                                                                                                              is a Federally regulated AMC. Appraisal
                                                documented medical condition of the                     offices of administrative hearings. The
                                                                                                                                                              management services may still be
                                                respondent; ancillary civil litigation;                 complaint log must include the
                                                                                                                                                              provided for federally related
                                                and complex fraud cases that involve                    following information (States are
                                                                                                                                                              transactions in non-participating States
                                                multiple individuals and reports. Such                  strongly encouraged to maintain this
                                                                                                                                                              by individual appraisers, by AMCs that
                                                special documented circumstances also                   information in an electronic, sortable
                                                                                                                                                              are below the minimum statutory panel
                                                include those periods when State rules                  format):
                                                                                                                                                              size threshold, and as noted, by
                                                require referral of a complaint to                      1. Case number                                        Federally regulated AMCs.
                                                another State entity for review and the                 2. Name of respondent
                                                                                                                                                                 The ASC, with the approval of the
                                                State agency is precluded from further                  3. Actual date the complaint was
                                                                                                                                                              Federal Financial Institutions
                                                processing of the complaint until it is                      received by the State
                                                                                                        4. Source of complaint (e.g., consumer,               Examination Council (FFIEC), may
                                                returned. In that circumstance, the State
                                                                                                             lender, AMC, bank regulator,                     extend this statutory implementation
                                                agency should document the required
                                                                                                             appraiser, hotline) or name of                   period for an additional 12 months if
                                                referral and the time period during
                                                                                                             complainant                                      the ASC makes a finding that a State has
                                                which the complaint was not under its
                                                                                                        5. Current status of the complaint                    made substantial progress toward
                                                control or authority.
                                                                                                        6. Date the complaint was closed (e.g.,               implementing a registration and
                                                2. Effective Enforcement                                     final disposition by the                         supervision program for AMCs that
                                                                                                             administrative hearing agency,                   meets the standards of Title XI.135
                                                   Effective enforcement requires that
                                                States investigate complaints, and if                        Office of the Attorney General, State
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                                                                                                                                                                129 Title   XI § 1118(a), 12 U.S.C. 3347.
                                                allegations are proven, take appropriate                     AMC Program or Court of Appeals)
                                                                                                                                                                130 Id.
                                                disciplinary or remedial action.                        7. Method of disposition (e.g., dismissal,
                                                                                                                                                                131 Id.
                                                                                                             letter of warning, consent order,                  132 Id.
                                                  126 Title
                                                                                                             final order)
                                                           XI § 1118(a), 12 U.S.C. 3347.                                                                        133 Id.
                                                  127 See Appendix B, Glossary of Terms, for the
                                                                                                        8. Terms of disposition (e.g., probation,               134 Title XI § 1124(f)(1), 12 U.S.C. 3353 and 12

                                                definition of ‘‘complaint.’’                                 fine)                                            CFR 34.210–34.216; 12 CFR 225.190–225.196; 12
                                                  128 See Appendix B, Glossary of Terms, for the        9. In the case of open complaints, the                CFR 323.8–323.14; 12 CFR 1222.20–1222.26.
                                                definition of ‘‘well-documented.’’                           most recent activity and date                      135 Title XI § 1124(f)(2), 12 U.S.C. 3353.




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                                                                            Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices                                           43981

                                                Part C: Interim Sanctions                                  and enforcement actions against                       5. Conduct of Interim Sanction
                                                                                                           appraisers and AMCs.139 The ASC shall                 Proceedings
                                                Policy Statement 12
                                                                                                           verify the State’s date of receipt, and               (a) Written Submissions
                                                Interim Sanctions                                          publish both the Notice and the State’s
                                                                                                           date of receipt in the Federal Register.                 All aspects of the proceeding shall be
                                                A. Authority                                                                                                     conducted by written submissions, with
                                                   Title XI grants the ASC authority to                    2. State Agency Response                              the exception of oral presentations
                                                impose sanctions on a State that fails to                                                                        allowed under subsection 4 above.
                                                                                                              Within 15 days of receipt of the
                                                have an effective Appraiser or AMC                         Notice, the State may submit a response               (b) Disqualification
                                                Program.136 The ASC may remove a                           to the ASC’s Executive Director.
                                                State credentialed appraiser or a                                                                                  An ASC member who deems himself
                                                                                                           Alternatively, a State may submit a                   or herself disqualified may at any time
                                                registered AMC from the Appraiser or                       Notice Not to Contest with the ASC’s
                                                AMC Registry on an interim basis, not                                                                            withdraw. Upon receipt of a timely and
                                                                                                           Executive Director. The filing of a                   sufficient affidavit of personal bias or
                                                to exceed 90 days, pending State agency                    Notice Not to Contest shall not
                                                action on licensing, certification,                                                                              disqualification of such member, the
                                                                                                           constitute a waiver of the right to a                 ASC will rule on the matter as a part of
                                                registration and disciplinary                              judicial review of the ASC’s decision,
                                                proceedings as an alternative to or in                                                                           the record.
                                                                                                           findings and conclusions. Failure to file
                                                advance of a non-recognition                               a Response within 15 days shall                       (c) Authority of ASC Chairperson
                                                proceeding.137 In determining whether                      constitute authorization for the ASC to                  The Chairperson of the ASC, in
                                                an Appraiser or AMC Program is                             find the facts to be as presented in the              consultation with other members of the
                                                effective, the ASC shall conduct an                        Notice and analysis. The ASC, for good                ASC whenever appropriate, shall have
                                                analysis as required by Title XI. An ASC                   cause shown, may permit the filing of a               complete charge of the proceeding and
                                                Finding of Poor on the Compliance                          Response after the prescribed time.                   shall have the duty to conduct it in a fair
                                                Review Report 138 issued to a State at                                                                           and impartial manner and to take all
                                                the conclusion of an ASC Compliance                        3. Briefs, Memoranda and Statements                   necessary action to avoid delay in the
                                                Review may trigger an analysis by the                                                                            disposition of proceedings.
                                                ASC for potential interim sanction(s).                       Within 45 days after the date of
                                                The following provisions apply to the                      receipt by the State agency of the Notice             (d) Rules of Evidence
                                                exercise by the ASC of its authority to                    as published in the Federal Register, the
                                                                                                                                                                   Except as is otherwise set forth in this
                                                impose interim sanction(s) on State                        State agency may file with the ASC’s
                                                                                                                                                                 section, relevant material and reliable
                                                agencies.                                                  Executive Director a written brief,
                                                                                                                                                                 evidence that is not unduly repetitive is
                                                                                                           memorandum or other statement
                                                B. Opportunity To Be Heard or Correct                                                                            admissible to the fullest extent
                                                                                                           providing factual data and policy and
                                                Conditions                                                                                                       authorized by the Administrative
                                                                                                           legal arguments regarding the matters
                                                                                                                                                                 Procedure Act (5 U.S.C. 551–559) and
                                                  The ASC shall provide the State                          set out in the Notice and analysis.
                                                                                                                                                                 other applicable law.
                                                agency with:                                               4. Oral Presentations to the ASC
                                                  1. Written notice of intention to                                                                              6. Decision of the ASC and Judicial
                                                impose an interim sanction; and                               Within 45 days after the date of                   Review
                                                  2. opportunity to respond or to correct                  receipt by the State agency of the Notice                Within 90 days after the date of
                                                the conditions causing such notice to                      as published in the Federal Register, the             receipt by the State agency of the Notice
                                                the State.                                                 State may file a request with the ASC’s               as published in the Federal Register, or
                                                  Notice and opportunity to respond or                     Executive Director to make oral                       in the case of oral presentation having
                                                correct the conditions shall be in                         presentation to the ASC. If the State has             been granted, within 30 days after
                                                accordance with section C, Procedures.                     filed a request for oral presentation, the            presentation, the ASC shall issue a final
                                                                                                           matter shall be heard within 45 days.                 decision, findings and conclusions and
                                                C. Procedures                                              An oral presentation shall be considered              shall publish the decision promptly in
                                                  This section prescribes the ASC’s                        as an opportunity to offer, emphasize                 the Federal Register. The final decision
                                                procedures which will be followed in                       and clarify the facts, policies and laws              shall be effective on issuance. The
                                                arriving at a decision by the ASC to                       concerning the proceeding, and is not a               ASC’s Executive Director shall ensure
                                                impose an interim sanction against a                       Meeting 140 of the ASC. On the                        prompt circulation of the decision to the
                                                State agency.                                              appropriate date and time, the State                  State agency. A final decision of the
                                                                                                           agency will make the oral presentation                ASC is a prerequisite to seeking judicial
                                                1. Notice
                                                                                                           before the ASC. Any ASC member may                    review.
                                                   The ASC shall provide a written                         ask pertinent questions relating to the
                                                Notice of intention to impose an interim                                                                         7. Computing Time
                                                                                                           content of the oral presentation. Oral
                                                sanction (Notice) to the State agency.                     presentations will not be recorded or                    Time computation is based on
                                                The Notice shall contain the ASC’s                         otherwise transcribed. Summary notes                  business days. The date of the act, event
                                                analysis as required by Title XI of the                    will be taken by ASC staff and made                   or default from which the designated
                                                State’s licensing and certification of                     part of the record on which the ASC                   period of time begins to run is not
                                                appraisers, the registration of AMCs, the                  shall decide the matter.                              included. The last day is included
                                                issuance of temporary licenses and                                                                               unless it is a Saturday, Sunday, or
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                                                certifications for appraisers, the                           139 Title XI § 1118(a), 12 U.S.C. 3347.             Federal holiday, in which case the
                                                receiving and tracking of submitted                          140 The  proceeding is more in the nature of a      period runs until the end of the next day
                                                complaints against appraisers and                          Briefing not subject to open meeting requirements.    which is not a Saturday, Sunday or
                                                AMCs, the investigation of complaints,                     The presentation is an opportunity for the State to   Federal holiday.
                                                                                                           brief the ASC—to offer, emphasize and clarify the
                                                  136 Title
                                                                                                           facts, policies and laws concerning the proceeding,   8. Documents and Exhibits
                                                              XI § 1118(a), 12 U.S.C. 3347.                and for the ASC members to ask questions.
                                                  137 Id.
                                                                                                           Additional consideration is given to the fact that       Unless otherwise provided by statute,
                                                  138 See   Appendix A—Compliance Review Process.          this stage of the proceeding is pre-decisional.       all documents, papers and exhibits filed


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                                                43982                         Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices

                                                in connection with any proceeding,                             The monitoring of State Programs is largely           the conclusion of the Review, a Compliance
                                                other than those that may be withheld                          accomplished through on-site visits known             Review Report (Report) is issued to the State
                                                from disclosure under applicable law,                          as a Compliance Review (Review). A Review             for the Appraiser Program, and if applicable,
                                                                                                               is conducted over a two- to four-day period,          a Report is also issued for the AMC Program,
                                                shall be placed by the ASC’s Executive                         and is scheduled to coincide with a meeting           with the ASC Finding on each Program’s
                                                Director in the proceeding’s file and will                     of the Program’s decision-making body
                                                be available for public inspection and                         whenever possible. ASC staff reviews the              overall compliance, or lack thereof, with
                                                copying.                                                       Appraiser Program and the seven compliance            Title XI. Deficiencies resulting in non-
                                                                                                               areas addressed in Policy Statements 1                compliance in any of the compliance areas
                                                9. Judicial Review                                             through 7. ASC staff reviews a participating          are cited in the Report. ‘‘Areas of Concern’’
                                                   A decision of the ASC under this                            State’s AMC Program and the four                      which potentially expose a Program to
                                                section shall be subject to judicial                           compliance areas addressed in Policy                  compliance issues in the future are also
                                                review. The form of proceeding for                             Statements 8 through 11. Sufficient                   addressed in the Report. The ASC’s final
                                                judicial review may include any                                documentation demonstrating compliance                disposition is based upon the ASC staff
                                                                                                               must be maintained by a State and made
                                                applicable form of legal action,                                                                                     report, the State’s response and staff’s
                                                                                                               available for inspection during the Review.
                                                including actions for declaratory                              ASC staff reviews a sampling of                       recommendation.
                                                judgments or writs of prohibitory or                           documentation in each of the compliance                 The following chart provides an
                                                mandatory injunction in a court of                             areas. The sampling is intended to be                 explanation of the ASC Findings and rating
                                                competent jurisdiction.141                                     representative of a State Program in its              criteria for each ASC Finding category. The
                                                                                                               entirety.                                             ASC Finding places particular emphasis on
                                                Appendices                                                        Based on the Review, ASC staff provides            whether the State is maintaining an effective
                                                Appendix A—Compliance Review                                   the State with an ASC staff report for the            regulatory Program in compliance with Title
                                                                                                               Appraiser Program, and if applicable, an ASC          XI.
                                                Process
                                                                                                               staff report for the AMC Program, detailing
                                                 The ASC monitors State Appraiser and                          preliminary findings. The State is given 60
                                                AMC Programs for compliance with Title XI.                     days to respond to the ASC staff report(s). At

                                                                                                                                                                                            Review Cycle (program
                                                                                                                                                                                               history or nature
                                                                                                                                                                                                 of deficiency
                                                            ASC finding                                                           Rating criteria                                                may warrant
                                                                                                                                                                                             a more accelerated
                                                                                                                                                                                                Review Cycle)

                                                Excellent ...............................   • State meets all Title XI mandates and complies with requirements of ASC Policy              2-year.
                                                                                              Statements.
                                                                                            • State maintains a strong regulatory Program.
                                                                                            • Very low risk of Program failure.
                                                Good ....................................   • State meets the majority of Title XI mandates and complies with the majority of             2-year.
                                                                                              ASC Policy Statement requirements.
                                                                                            • Deficiencies are minor in nature.
                                                                                            • State is adequately addressing deficiencies identified and correcting them in the
                                                                                              normal course of business.
                                                                                            • State maintains an effective regulatory Program.
                                                                                            • Low risk of Program failure.
                                                Needs Improvement .............             • State does not meet all Title XI mandates and does not comply with all require-             2-year with additional moni-
                                                                                              ments of ASC Policy Statements.                                                               toring.
                                                                                            • Deficiencies are material but manageable and if not corrected in a timely manner
                                                                                              pose a potential risk to the Program.
                                                                                            • State may have a history of repeated deficiencies but is showing progress toward
                                                                                              correcting deficiencies.
                                                                                            • State regulatory Program needs improvement.
                                                                                            • Moderate risk of Program failure.
                                                Not Satisfactory ....................       • State does not meet all Title XI mandates and does not comply with all require-             1-year.
                                                                                              ments of ASC Policy Statements.
                                                                                            • Deficiencies present a significant risk and if not corrected in a timely manner
                                                                                              pose a well-defined risk to the Program.
                                                                                            • State may have a history of repeated deficiencies and requires more supervision
                                                                                              to ensure corrective actions are progressing.
                                                                                            • State regulatory Program has substantial deficiencies.
                                                                                            • Substantial risk of Program failure.
                                                Poor 142 ................................   • State does not meet Title XI mandates and does not comply with requirements of              Continuous monitoring.
                                                                                              ASC Policy Statements.
                                                                                            • Deficiencies are significant and severe, require immediate attention and if not
                                                                                              corrected represent critical flaws in the Program.
                                                                                            • State may have a history of repeated deficiencies and may show a lack of will-
                                                                                              ingness or ability to correct deficiencies.
                                                                                            • High risk of Program failure.
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                                                 The ASC has two primary Review Cycles:                        scheduled on a two-year Review Cycle. States          the ASC determines more frequent on-site
                                                Two-year and one-year. Most States are                         may be moved to a one-year Review Cycle if            Reviews are needed to ensure that the State

                                                  141 5   U.S.C. 703—Form and venue of proceeding.               142 An ASC Finding of ‘‘Poor’’ may result in        Statement 5, Reciprocity; see also Policy Statement
                                                                                                               significant consequences to the State. See Policy     12, Interim Sanctions.



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                                                                        Federal Register / Vol. 82, No. 181 / Wednesday, September 20, 2017 / Notices                                                 43983

                                                maintains an effective Program. Generally,              appraisals and written appraisal report(s)               (b) the refinancing of real property or
                                                States are placed on a one-year Review Cycle            covered by a single contractual agreement.            interests in real property; and
                                                because of non-compliance issues or serious                Complaint: As referenced herein, any                  (c) the use of real property or interests in
                                                areas of concerns that warrant more frequent            document filed with, received by, or serving          property as security for a loan or investment,
                                                on-site visits. Both two-year and one-year              as the basis for possible inquiry by the State        including mortgage-backed securities. (See
                                                Review Cycles include a review of all aspects           agency regarding alleged violation of Title XI,       Title XI § 1121(5), 12 U.S.C. 3350.)
                                                of the State’s Program.                                 Federal or State law or regulation, or USPAP             State: Any State, the District of Columbia,
                                                   The ASC may conduct Follow-up Reviews                by a credentialed appraiser or appraiser              the Commonwealth of Puerto Rico, the
                                                and additional monitoring. A Follow-up                  applicant, for allegations of unlicensed              Commonwealth of the Northern Mariana
                                                Review focuses only on specific areas                   appraisal activity, or complaints involving           Islands, Guam, and the United States Virgin
                                                identified during the previous on-site                  AMCs. A complaint may be in the form of a             Islands. (American Samoa does not have a
                                                Review. Follow-up Reviews usually occur                 referral, letter of inquiry, or other document        Program.)
                                                within 6–12 months of the previous Review.              alleging misconduct or wrongdoing.                       State board: As referenced herein, ‘‘State
                                                In addition, as a risk management tool, ASC                Credentialed appraisers: Refers to State           board’’ means a group of individuals (usually
                                                staff identifies State Programs that may have           licensed, certified residential or certified          appraisers, AMC representatives, bankers,
                                                a significant impact on the nation’s appraiser          general appraiser classifications.                    consumers, and/or real estate professionals)
                                                regulatory system in the event of Title XI                 Disciplinary action: As referenced herein,         appointed by the Governor or a similarly
                                                compliance issues. For States that represent            corrective or punitive action taken by or on          positioned State official to assist or oversee
                                                a significant percentage of the credentials on          behalf of a State agency which may be formal          State Programs. A State agency may be
                                                the Appraiser Registry, ASC staff performs              or informal, or may be consensual or                  headed by a board, commission or an
                                                annual on-site Priority Contact visits. The             involuntary, resulting in any of the following:       individual.
                                                primary purpose of the Priority Contact visit           a. Revocation of credential or registration              Uniform Standards of Professional
                                                is to review topical issues, evaluate                   b. suspension of credential or registration           Appraisal Practice (USPAP): Refers to
                                                regulatory compliance issues, and maintain a            c. written consent agreements, orders or              appraisal standards promulgated by the
                                                close working relationship with the State.                 reprimands                                         Appraisal Standards Board of the Appraisal
                                                This is not a complete Review of the                    d. probation or any other restriction on the          Foundation establishing minimum
                                                Program. The ASC will also schedule a                      use of a credential                                requirements for development and reporting
                                                Priority Contact visit for a State when a               e. fine                                               of appraisals, including real property
                                                specific concern is identified that requires            f. voluntary surrender 143                            appraisal. Title XI requires appraisals
                                                special attention. Additional monitoring may            g. other acts as defined by State statute or          prepared by State certified and licensed
                                                be required where a deficiency is identified               regulation as disciplinary                         appraisers to be performed in conformance
                                                and reports on required or agreed upon                                                                        with USPAP.
                                                                                                           With the exception of voluntary surrender,
                                                corrective actions are required monthly or                                                                       Well-documented: Means that States obtain
                                                                                                        suspension or revocation, such action may be
                                                quarterly. Additional monitoring may                                                                          and maintain sufficient relevant
                                                include on-site monitoring as well as off-site          exempt from reporting to the National
                                                                                                        Registry if defined by State statute, regulation      documentation pertaining to a matter so as to
                                                monitoring.                                                                                                   enable understanding of the facts and
                                                                                                        or written policy as ‘‘non-disciplinary.’’
                                                Appendix B—Glossary of Terms                               Federally related transaction: Refers to any       determinations in the matter and the reasons
                                                                                                        real estate related financial transaction             for those determinations.
                                                   Appraisal management company (AMC):                  which:
                                                Refers to, in connection with valuing
                                                                                                                                                              *        *   *     *      *
                                                                                                           (a) A federal financial institutions                 By the Appraisal Subcommittee.
                                                properties collateralizing mortgage loans or            regulatory agency engages in, contracts for, or
                                                mortgages incorporated into a securitization,           regulates; and                                          Dated: September 13, 2017.
                                                any external third party authorized either by              (b) requires the services of an appraiser.         Arthur Lindo,
                                                a creditor of a consumer credit transaction             (See Title XI § 1121(4), 12 U.S.C. 3350.)             Chairman.
                                                secured by a consumer’s principal dwelling                 Federal financial institutions regulatory
                                                or by an underwriter of or other principal in                                                                 [FR Doc. 2017–19998 Filed 9–19–17; 8:45 am]
                                                                                                        agencies: Refers to the Board of Governors of
                                                the secondary mortgage markets, that                    the Federal Reserve System, the Federal               BILLING CODE 6700–01–P
                                                oversees a network or panel of more than 15             Deposit Insurance Corporation, the Office of
                                                certified or licensed appraisers in a State or          the Comptroller of the Currency, and the
                                                25 or more nationally within a given year—              National Credit Union Administration. (See
                                                   (A) To recruit, select, and retain appraisers;       Title XI § 1121(6), 12 U.S.C. 3350.)                  FEDERAL MARITIME COMMISSION
                                                   (B) to contract with licensed and certified             Home State agency: As referenced herein,
                                                appraisers to perform appraisal assignments;            State agency or agencies that grant an                Notice of Agreement Filed
                                                   (C) to manage the process of having an               appraiser a licensed or certified credential.
                                                appraisal performed, including providing                Residency in the home State is not required.
                                                                                                                                                                The Commission hereby gives notice
                                                administrative duties such as receiving                 Appraisers may have more than one home                of the filing of the following agreement
                                                appraisal orders and appraisal reports,                 State agency.                                         under the Shipping Act of 1984.
                                                submitting completed appraisal reports to                  Non-federally recognized credentials or            Interested parties may submit comments
                                                creditors and underwriters, collecting fees             designations: Refers to any State appraiser           on the agreement to the Secretary,
                                                from creditors and underwriters for services            credential or designation other than trainee,         Federal Maritime Commission,
                                                provided, and reimbursing appraisers for                State licensed, certified residential or
                                                services performed; or                                                                                        Washington, DC 20573, within twelve
                                                                                                        certified general classifications as defined in       days of the date this notice appears in
                                                   (D) to review and verify the work of                 Policy Statement 1, and which is not
                                                appraisers.                                                                                                   the Federal Register. A copy of the
                                                                                                        recognized by Title XI.
                                                   AQB Criteria: Refers to the Real Property                                                                  agreement is available through the
                                                                                                           Real estate related financial transaction:
                                                Appraiser Qualification Criteria as                     Any transaction involving:                            Commission’s Web site (www.fmc.gov)
                                                established by the Appraiser Qualifications                (a) the sale, lease, purchase, investment in       or by contacting the Office of
                                                Board of the Appraisal Foundation setting                                                                     Agreements at (202) 523–5793 or
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                                                                                                        or exchange of real property, including
                                                forth minimum education, experience and                 interests in property, or the financing thereof;      tradeanalysis@fmc.gov.
                                                examination requirements for the licensure
                                                                                                                                                                Agreement No.: 012487–001.
                                                and certification of real property appraisers,
                                                and minimum requirements for ‘‘Trainee’’
                                                                                                          143 A voluntary surrender that is not deemed          Title: Eastern Car Liner Ltd/Austral
                                                                                                        disciplinary by State law or regulation, or is not    Asia Line Pte. Ltd Space Charter
                                                and ‘‘Supervisory’’ appraisers.                         related to any disciplinary process need not be
                                                   Assignment: As referenced herein, for                reported as discipline provided the individual’s
                                                                                                                                                              Agreement.
                                                purposes of temporary practice,                         Appraiser Registry record is updated to show the        Parties: Eastern Car Liner, Ltd. and
                                                ‘‘assignment’’ means one or more real estate            credential is inactive.                               Austral Asia Line Pte Ltd.


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Document Created: 2018-10-24 14:23:40
Document Modified: 2018-10-24 14:23:40
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionProposed Revised Policy Statements.
DatesComments must be received on or before November 20, 2017.
ContactJames 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.
FR Citation82 FR 43966 

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