82_FR_44677 82 FR 44493 - Collection and Transmission of Annual AMC Registry Fees

82 FR 44493 - Collection and Transmission of Annual AMC Registry Fees

FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL

Federal Register Volume 82, Issue 184 (September 25, 2017)

Page Range44493-44502
FR Document2017-20400

The ASC is adopting a final rule to implement collection and transmission of appraisal management company (AMC) annual registry fees in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd- Frank Act) to be applied by State appraiser certifying and licensing agencies that elect to register and supervise AMCs, pursuant to 12 U.S.C. 3353 and the regulations promulgated thereunder.

Federal Register, Volume 82 Issue 184 (Monday, September 25, 2017)
[Federal Register Volume 82, Number 184 (Monday, September 25, 2017)]
[Rules and Regulations]
[Pages 44493-44502]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-20400]


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FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL

12 CFR Part 1102

[Docket No. AS17-07]


Collection and Transmission of Annual AMC Registry Fees

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

ACTION: Final rule.

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[[Page 44494]]

SUMMARY: The ASC is adopting a final rule to implement collection and 
transmission of appraisal management company (AMC) annual registry fees 
in the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-
Frank Act) to be applied by State appraiser certifying and licensing 
agencies that elect to register and supervise AMCs, pursuant to 12 
U.S.C. 3353 and the regulations promulgated thereunder.

DATES: Effective date. This final rule will become effective on 
November 24, 2017.

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

    Section 1473 of the Dodd-Frank Act \1\ included amendments to Title 
XI of the Financial Institutions Reform, Recovery, and Enforcement Act 
of 1989 \2\ (Title XI). Section 1109 of Title XI,\3\ Roster of State 
certified or licensed appraisers; authority to collect and transmit 
fees, was amended by the Dodd-Frank Act to require States \4\ that 
elect to register and supervise AMCs to collect: (1) From AMCs that 
have been in existence for more than a year an annual registry fee of 
$25 multiplied by the number of appraisers working for or contracting 
with such AMC in such State during the previous year; and (2) from AMCs 
that have not been in existence for more than a year, $25 multiplied by 
an appropriate number to be determined by the ASC. Such $25 amount may 
be adjusted, up to a maximum of $50, at the discretion of the ASC, if 
necessary to carry out the ASC's Title XI functions.\5\
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    \1\ Public Law 111-203, 124 Stat. 1376.
    \2\ Public Law 101-73, 103 Stat. 183.
    \3\ 12 U.S.C. 3338.
    \4\ As of January, 2017, 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, had State appraiser certifying and licensing 
agencies.
    \5\ See 12 U.S.C. 3338(a)(4)(B).
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    Section 1117 of Title XI,\6\ Establishment of State appraiser 
certifying and licensing agencies, was amended by the Dodd-Frank Act to 
include additional duties for States, if they so choose, to: (1) 
Register and supervise AMCs; and (2) add information about AMCs in 
their State to the National Registry of AMCs (AMC Registry).\7\ States 
electing to register and supervise AMCs under Section 1117 must 
implement minimum requirements in accordance with the AMC Rule.\8\
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    \6\ 12 U.S.C. 3346.
    \7\ 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, 
who are State certified or licensed in a State, or 25 or more 
appraisers nationally (two or more States) within a given year. (See 
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. (See 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.
    \8\ The Dodd-Frank Act added section 1124 to Title XI, Appraisal 
Management Company Minimum Requirements, which required the Office 
of the Comptroller of the Currency (OCC); Board of Governors of the 
Federal Reserve System (Board); Federal Deposit Insurance 
Corporation (FDIC); National Credit Union Administration (NCUA); 
Bureau of Consumer Financial Protection (Bureau); and Federal 
Housing Finance Agency (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. The Agencies issued a final rule 
(AMC Rule) with an effective date of August 10, 2015. (80 FR 32658, 
June 9, 2015).
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    Section 1103 of Title XI,\9\ Functions of Appraisal Subcommittee, 
was amended by the Dodd-Frank Act to require the ASC to maintain the 
AMC Registry of those AMCs that are either:
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    \9\ 12 U.S.C. 3332.
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    (1) Registered with and subject to supervision by a State that has 
elected to register and supervise AMCs; or (2) are operating 
subsidiaries of a Federally regulated financial institution (Federally 
regulated AMCs). On or before the effective date of this rule, the ASC 
will issue an ASC Bulletin to States that will address:
    1. When the AMC Registry will be open for States; and
    2. Reporting requirements (information required to be submitted by 
States in order to register AMCs on the AMC Registry) with the 
effective date for compliance.
    Title XI as amended by the Dodd-Frank Act imposes a statutory 
restriction on performance of services by AMCs for a federally related 
transaction (FRT) \10\ that applies after a 36-month period that began 
when the AMC Rule became effective (Implementation Period).\11\ The ASC 
recognizes that States electing to register and supervise AMCs may need 
to amend their rules and/or regulations, or revise their operating 
procedures in order to implement AMC registry fees. Given the limited 
period of time between publication of this final rule and the 
expiration of the Implementation Period, States may not be able to 
implement the AMC registry fees within the Implementation Period. As 
discussed further below in the subsection Collection and transmission 
of annual AMC registry fees, only those AMCs whose registry fees have 
been transmitted to the ASC are eligible to be on the AMC Registry. 
While the ASC encourages States that elect to register and supervise 
AMCs to begin collecting fees from registered AMCs as soon as possible 
in accordance with the requirements of Section 1109 of Title XI so that 
those AMCs may be entered on the AMC Registry, the restriction on 
performance of services for FRTs will not impact an AMC so long as the 
AMC is registered with a State that has elected to register and 
supervise AMCs, or is subject to oversight by a Federal financial 
institutions regulatory agency.
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    \10\ A federally related transaction includes 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), implemented by the OCC: 12 CFR 
34.42(f) and 34.43(a); Board: 12 CFR 225.62(f) and 225.63(a); FDIC: 
12 CFR 323.2(f) and 323.3(a); and NCUA: 12 CFR 722.2(f) and 
722.3(a). Based on 2014 Home Mortgage Disclosure Act (HMDA) data, at 
least 90 percent of residential mortgage loan originations are not 
subject to the Title XI appraisal regulations. (FFIEC report to 
Congress, Economic Growth and Regulatory Paperwork Reduction Act, 82 
FR 15900 (March 30, 2017).
    \11\ See 12 U.S.C. 3353(f)(1). In summary, beginning 36 months 
from the effective date of the AMC Rule, an AMC, as defined by Title 
XI, may not provide services for FRTs in a State unless the AMC is 
registered with the State pursuant to a registration and supervision 
program established under Section 1117, or is subject to oversight 
by a Federal financial institutions regulatory agency.
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    On May 20, 2016, the ASC published a proposed rule with a 60-day 
public comment period on implementation of the annual AMC registry fee 
that States would collect and transmit to the ASC if they elect to 
register and supervise AMCs.\12\ This final rule sets the fee formula 
that States would apply in collecting annual AMC registry fees and 
transmitting those fees to the ASC.
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    \12\ 81 FR 31868 (May 20, 2016).
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II. The Final Rule

    The final rule: (1) Establishes the annual AMC registry fee in 
section 1109 of Title XI for AMCs in those States electing to register 
and supervise AMCs; and (2) implements collection and transmission of 
AMC registry fees as required by section 1109. The final rule sets 
forth the ASC's interpretation of the phrase ``working for or 
contracting with'' for purposes of calculating the annual AMC registry 
fee.

[[Page 44495]]

    For the reasons discussed in section III of this SUPPLEMENTARY 
INFORMATION, the final rule adopts the rule substantially as proposed. 
The final rule contains technical, nonsubstantive changes.

III. The Final Rule and Public Comments on the Proposed Rule

    The following is a section-by-section review of the proposed rule 
and a discussion of the public comments received by the ASC concerning 
the proposal. The ASC received 104 comment letters in response to the 
published proposal. These comment letters were received from State 
appraiser certifying and licensing agencies, AMCs, appraiser and real 
estate trade associations, professional associations, appraisal firms 
and appraisers.

A. Section 1102.401 Definitions

    The ASC requested comment on all aspects of the proposed rule. The 
following is a discussion of the definitions, related public comments 
and issues relating to those definitions. Definitions on which the ASC 
did not receive comment are not discussed below and are adopted without 
change in the final rule.
    The ASC is adopting the definitions substantially as proposed, 
including cross-references to the definitions established in the AMC 
Rule. Several commenters requested that the cross-referenced 
definitions be included in the final rule rather than as proposed by 
cross reference to definitions in the AMC Rule. However, if the ASC 
were to adopt the approach suggested by these commenters, in the event 
those AMC Rule definitions are amended by the interagency process in 
the future, definitions included in this rule would become inaccurate 
and inconsistent. To avoid that circumstance, the ASC is adopting the 
definitions as proposed with cross-reference to those definitions 
established by the AMC Rule.
    One commenter expressed concern over the definition of ``appraiser 
panel'' stating AMCs should not be penalized over other providers of 
appraisal services, and included discussion on appraisal firms and 
AMCs. This commenter quoted language from the AMC Rule on appraisal 
firms. Another commenter expressed concern that the definition of 
``appraiser panel'' should only include independent contractors and not 
employees. The issues raised by these commenters were determined in the 
interagency AMC Rule during that rulemaking process.
    Proposed Sec.  1102.401(d) defined performance of an appraisal. 
Proposed Sec.  1102.401(d) is being corrected to define performed an 
appraisal, which conforms to the actual phrase used throughout the 
rule, to mean the appraisal service requested of an appraiser by the 
AMC was provided to the AMC. The ASC is adopting this definition 
without substantive change as Sec.  1102.401(d) in the final rule. One 
commenter questioned whether this referred to initial submission of the 
report or when the appraisal has been reviewed and accepted by the 
client in its final form. The ASC recognizes that the issue may be 
complicated by the ongoing debate within the profession concerning when 
an appraisal is complete. The ASC is adopting the definition as 
proposed, intending for the terms to remain subject to a plain English 
interpretation. Another commenter requested a definition of ``appraisal 
service'' be included in the final rule. The ASC recognizes that 
various appraisal services could be requested, including an appraisal 
review, and therefore declines to define the phrase, recognizing that 
States can be more restrictive. In general, commenters supported the 
proposed definition.
Establishing the Annual AMC Registry Fee
    The ASC is adopting proposed Sec.  1102.402 without change. Section 
1102.402 establishes the annual AMC registry fee for States that elect 
to register and supervise AMCs as follows:
    (1) In the case of an AMC that has been in existence for more than 
a year, $25 multiplied by the number of appraisers who have performed 
an appraisal for the AMC on a covered transaction in such State during 
the previous year; and (2) in the case of an AMC that has not been in 
existence for more than a year, $25 multiplied by the number of 
appraisers who have performed an appraisal for the AMC on a covered 
transaction in such State since the AMC commenced doing business.
    For AMCs that have been in existence for more than a year, section 
1109 of Title XI provides that the annual AMC registry fee is based on 
the number of appraisers ``working for or contracting with'' an AMC in 
a State during a 12-month period multiplied by $25, but where such $25 
amount may be adjusted up to a maximum of $50.\13\ The final rule 
adopts the minimum fee of $25 as set by statute and interprets the 
phrase ``working for or contracting with'' to mean those appraisers on 
an AMC appraiser panel that performed an appraisal for the AMC on a 
covered transaction during the previous year in a particular State.
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    \13\ See Title XI sec. 1109(a)(4)(B), 12 U.S.C. 3338(a)(4)(B).
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    For AMCs that have not been in existence for more than a year, the 
statute requires a determination by the ASC of an appropriate 
multiplier to calculate registry fees for those AMCs. The ASC proposed 
to use the same factors of $25 multiplied by the number of appraisers 
that performed an appraisal for the AMC on a covered transaction, but 
the fee would be based on the actual period of time since the AMC 
commenced doing business rather than 12 months. For example, if an AMC 
has been operating for 6 months, the fee would be calculated by 
multiplying $25 by the number of appraisers that performed an appraisal 
for the AMC on a covered transaction during that 6-month period.
    One commenter stated the ASC should identify what it will do with 
revenue from AMC registry fees and suggested the ASC should consider 
decreasing the fee to less than $25 which would still allow the ASC 
plenty of funds to perform its Title XI-related functions. The 
commenter asserted the ASC has discretion to do so. However, section 
1109(a)(4), by its plain terms, sets the minimum fee allowed under the 
statutory framework at $25. The statute did provide latitude for the 
ASC to establish an appropriate number to multiply by $25 for AMCs that 
have not been in existence for more than a year. Using the actual 
period of time since the AMC commenced doing business will maintain 
some consistency in the calculation of AMC registry fees to reduce 
administrative burden for the States. Based on the ASC's anticipated 
costs of overseeing States that elect to register and supervise AMCs, 
as well as the ASC's anticipated costs of maintaining the AMC Registry, 
the ASC believes the proposed annual AMC registry fee would cover those 
costs while supporting other Title XI functions of the ASC as mandated 
by Congress, and in particular, further development of its grant 
programs, particularly to support States as funds are available.
    The ASC considered three options with respect to interpreting the 
phrase ``working for or contracting with.'' Under the first option, the 
phrase ``working for or contracting with'' would have been interpreted 
to include every appraiser on an AMC appraiser panel during the 
reporting period \14\ in

[[Page 44496]]

a particular State. The multiplier in this option would have included 
all appraisers on an AMC's appraiser panel in a particular State, 
including appraisers accepted by the AMC for consideration for future 
appraisal assignments. One commenter stated this option would likely 
penalize AMCs for adding appraisers to their roster for future use, and 
would also be burdensome for States. Another commenter stated the 
interpretation under the first option would be the easiest for States. 
The ASC remains concerned that this option would impose the most burden 
to AMCs and impose the highest registry fees.
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    \14\ In the case of AMCs that have been in existence for more 
than a year, the reporting period would be 12 months. In the case of 
an AMC that has not been in existence for more than a year, the 
reporting period would be since the AMC commenced doing business.
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    Under the second option, the phrase ``working for or contracting 
with'' would have been interpreted to include those appraisers engaged 
by the AMC to perform an appraisal on a covered transaction during the 
reporting period in a particular State. Under this option, those 
appraisers engaged by the AMC to perform an appraisal, regardless of 
whether the appraiser completed the appraisal during the reporting 
period, would be included in the calculation of the AMC's registry 
fees.
    The ASC requested comment on the second option's interpretation of 
the phrase ``working for or contracting with'' and whether this would 
be an easier interpretation for the States to administer. (See Question 
3 in the proposal.) Several commenters expressed concern over this 
option. One commenter stated that AMCs could reduce their panel sizes, 
thereby creating slower turnaround times and utilizing fewer 
appraisers. Another commenter stated the interpretation under the 
second option would not be easier to implement and States would have to 
rely on AMCs self reporting this information. Another commenter 
expressed concern that the second option could penalize AMCs if an 
order is accepted and assigned but later cancelled and neither the AMC 
or the appraiser receive any compensation, and could also be burdensome 
for States to enforce without having a status of assignments and their 
completion during a given timeframe.
    Under the third option, which is adopted in the final rule, the 
phrase ``working for or contracting with'' includes those appraisers 
that performed an appraisal for the AMC on a covered transaction during 
the reporting period in a particular State. This option excludes 
appraisers accepted by the AMC for consideration for future appraisal 
assignments as well as appraisers who performed appraisals in the past, 
but did not perform any appraisals in the reporting period. The AMC 
registry fee is not intended to result in an appraiser being counted 
twice in calculating the fee, regardless of how many appraisals that 
appraiser performed in a single State during a reporting period. A few 
commenters misunderstood the proposed application of the fee and 
thought the fee would be calculated based on the total number of 
individual appraisers on an AMC panel, or that the fee would be imposed 
based on individual appraisals, neither of which is consistent with the 
proposal or the final rule.
    Several commenters expressed support for the third option as having 
the least economic impact to an AMC, the least burden for appraisers 
and preferable from a State administrative point of view. A few 
commenters expressed support for the third option but believed it would 
be a burden for States to collect information from AMCs. One commenter, 
while stating the third option is costly to AMCs, stated that the third 
option would be the most equitable as it applies to those appraisers 
who had completed appraisal assignments, and that the first two options 
may cause AMCs to pare their appraiser panels. One commenter stated the 
third option would also simplify the queries that States would need to 
run to report all registered AMCs that have completed appraisal reports 
during a specific year or timeframe. Another commenter stated AMCs may 
use fewer appraisers for appraisal assignments to keep AMC registry 
fees down. The ASC anticipates there may well be such responses by AMCs 
to reduce their registry fees, but under the statutory framework, it is 
seemingly unavoidable.
    The ASC requested comment on the ASC's interpretation of the phrase 
``working for or contracting with.'' (See Question 2 in the proposal.) 
One commenter expressed concern that for AMCs in business less than 12 
months, determining how many appraisals have been performed could be 
difficult. Another commenter suggested ``working for'' and 
``contracting with'' should be properly defined with specifics and 
parameters. One commenter requested clarification of the term ``working 
for,'' and another commenter, while supporting the third option, 
commented the term ``performed'' needs clarity, suggesting appraisals 
could be considered ``performed'' when delivered by the AMC to the 
client. The ASC recognizes that because the AMC is acting as an agent 
of the appraiser's client, delivery of an appraisal to the AMC could 
also be deemed delivery to the client. The ASC is adopting the 
interpretation as proposed, intending for the terms to remain subject 
to a plain English interpretation.
    The ASC also requested comment on what aspects of the proposed 
rule, if any, would be challenging for States to implement and any 
alternative approaches that would make implementation easier, while 
maintaining consistency with the statute. (See Question 8 in the 
proposal.) Several commenters expressed concern that the proposed rule 
would create significant administrative burden on the State to 
calculate and verify registry fees, and would also result in 
expenditures to administer and transmit the registry fees. Some 
commenters are opposed to the fee in general, while a few expressed 
opposition to AMCs. A few commenters suggested no action should be 
taken until the Dodd-Frank Act is amended. One commenter stated the ASC 
should seek legislative changes to 12 U.S.C. 3338 asserting it is 
fundamentally flawed, and requested withdrawal of the proposed rule 
until the federal statute is changed. The ASC, however, is charged with 
implementation of the statute as passed by Congress.
    One commenter stated that the 500 hours of regulatory burden is 
understated, and added States should be reimbursed for expenses in 
collecting and transmitting registry fees. Another commenter also 
stated that the 500 hours is underestimated stating the ASC failed to 
consider administrative costs and expenses for creating and maintaining 
a database, and for the staff time to run the program. The ASC is 
working to minimize such burden in simplifying the reporting 
requirements for AMCs. As stated in the proposal, the ASC will issue a 
Bulletin to address reporting requirements with the effective date for 
compliance.
    Another commenter foresees several barriers to collecting reliable 
data on how many appraisers are on an AMC panel and how many have done 
work for the AMC in the previous 12 months, including the necessity to 
adopt new rules, create new forms and update current IT systems to 
collect and maintain this data, all of which will result in increased 
labor costs for staff needed for implementation of the proposed rule. 
As stated in the proposed rule, the ASC anticipates further development 
of its grants program, particularly in support of the States as funds 
are available. The statutory purpose of ASC grants to the States is to 
provide funds to assist States in compliance with Title XI. Therefore, 
as

[[Page 44497]]

funds are available, the ASC could consider establishing a grant to 
assist States in registry reporting requirements and transmission of 
registry fees for both appraisers and AMCs. Another commenter suggested 
the ASC should provide a revenue projection as well as costs to develop 
the AMC Registry. The ASC has included those expenses in its budget 
process and will continue to do so on an annual basis.
    Another commenter opposed the interpretation of ``working for or 
contracting with,'' stating it will create an entirely new regulatory 
criterion for States to implement and validate, thereby requiring 
audits. It should be noted that there is no federal requirement for 
States to audit AMCs to determine validity of information submitted to 
the State. A State may determine to periodically audit, or not to 
exercise such authority at all, or alternatively, a State may rely on 
the complaint/investigation process to determine if and when an audit 
is warranted.
    By far the majority of comments received expressed concern over 
these additional fees and the impact on appraisers if the fee is passed 
on to them by the AMCs. More specifically, these commenters requested 
that the final rule prohibit AMCs from passing the fee on to 
appraisers. While the ASC shares in the concern expressed over the fee 
being passed on to appraisers, such regulation of AMCs is outside of 
the authority of the ASC. The ASC notes the fee imposed by statute is 
not a fee assessed on appraisers, but rather on AMCs. Some commenters 
identified certain States are already attempting to regulate this at 
the State level. One commenter, however, stated the choice to pass the 
fee on to the appraiser should be left to the AMC, and that appraisers 
have a choice whether to participate on an AMC panel.
    Some commenters expressed concern that AMCs hide their appraisal 
management fees from borrowers by including them as part of the fee 
paid to appraisers, and requested that the final rule require fees be 
disclosed to the borrower. This, however, is outside the authority of 
the ASC. Comments were also received expressing concern over AMCs not 
paying customary and reasonable fees to appraisers, or charging 
appraisers various fees to be on an AMC panel. This too is outside the 
authority of the ASC.
    One commenter suggested consideration of a de minimis exception, 
stating the ASC should allow AMCs to use the IRS 1099 threshold and 
thus exclude those appraisers to whom it pays less than $600 during a 
tax year, which would include appraisers who performed only one 
appraisal assignment, and perhaps up to three. The commenter suggests 
its proposal as an alternative to potentially reduce AMC registry fees. 
However, the ASC would not have authority under the statute to provide 
such an exception, particularly in the case of AMCs that have been in 
existence for more than a year. Furthermore, the ASC is concerned there 
would be undesirable consequences. For example, there could be a 
reduction in appraiser fees in order to avoid the proposed threshold. 
Additionally, AMCs might select appraisers in a manner to avoid the 
threshold rather than basing a selection on competency. The ASC will 
continue to work with States to address increased burden and will 
continue to explore means to provide additional grant funding to the 
States to support State programs as funds are available and additional 
grant policies and procedures are developed and approved.
    A few commenters expressed preference for a flat fee to avoid any 
need to verify that AMCs are sending in the correct amount, another 
commenter suggested a two-tiered system and another commenter suggested 
a tiered structure based on the size of the appraiser panel and/or the 
volume of appraisals brokered by an AMC. The ASC considered these 
various options to calculating the AMC registry fee, but concluded that 
such options were not supported by the statute. Also, the ASC notes, in 
response to several commenters expressing concern over the honor system 
versus auditing AMCs on information provided to the State by AMCs, that 
it is up to the State to determine whatever process the State deems 
appropriate.
    Two commenters stated the AMC registry fee should be calculated 
based on FRTs, not covered transactions. The ASC believes the proposal 
is consistent with the AMC Rule and the statute. The AMC Rule defined a 
covered transaction as any consumer credit transaction secured by the 
consumer's principal dwelling.\15\ As stated in the AMC Rule preamble, 
the definition did not limit the definition of covered transaction to 
FRTs, even though Title XI and its implementing regulations have 
applied historically only to appraisals for FRTs. The AMC Rule, through 
the interagency process, determined that defining ``covered 
transaction'' as such reflected the statutory text of section 1121(11), 
which defines the term ``appraisal management company,'' as in 
pertinent part, ``any external third party authorized either by a 
creditor of a consumer credit transaction secured by the consumer's 
principal dwelling or by an underwriter of or other principal in the 
secondary mortgage markets.'' \16\ It was further stated in the AMC 
Rule preamble that applying coverage of the AMC Rule beyond FRTs was 
consistent with the structure and text of other parts of Title XI, 
section 1124, most of which address appraisals generally rather than 
appraisals only for FRTs, and in particular, the text of section 
1124(a)(4) of Title XI indicates that one of the chief purposes of the 
minimum requirements for AMCs is to ensure compliance with the 
valuation independence standards established pursuant to section 129E 
of the Truth and Lending Act (TILA) (15 U.S.C. 1639e).\17\ The preamble 
of the AMC Rule concluded that those standards apply to AMCs whenever 
they engage in a consumer credit transaction secured by the consumer's 
principal dwelling, regardless of whether the transaction is a FRT.\18\
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    \15\ See 12 CFR 34.211(h); 12 CFR 225.191(h); 12 CFR 323.9(h); 
12 CFR 1222.21(h) (2015).
    \16\ See 80 FR 32658, 32664 (June 9, 2015).
    \17\ See Title XI sec. 1124(a)(4), 12 U.S.C. 3353(a)(4).
    \18\ See 80 FR 32658, 32664 (June 9, 2015).
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    Another commenter questioned the benefit of the AMC Registry to the 
industry as a whole. The ASC notes the requirement for the ASC to 
maintain the AMC Registry is statutory. The benefit of the Registry 
initially will be to promote information sharing between States on 
AMCs. The Registry will also allow lenders, AMCs and other stakeholders 
to identify AMCs that are located in participating States, and 
therefore subject to State registration and supervision. In addition, 
the Registry will identify AMCs that are Federally regulated AMCs.
Collection and Transmission of Annual AMC Registry Fees
    The ASC is adopting Sec.  1102.403(a) and (b) substantially as 
proposed regarding collection and transmission of annual AMC registry 
fees. On or before the effective date of this rule, the ASC will issue 
an ASC Bulletin to States that will address:
    1. When the AMC Registry will be open for States; and
    2. Reporting requirements (information required to be submitted by 
States in order to register AMCs on the AMC Registry) with the 
effective date for compliance.
    Section 1102.403(a) and (b) implement collection and transmission 
of annual AMC registry fees for States that elect to register and 
supervise AMCs following the statutory scheme

[[Page 44498]]

set forth in sections 1109 and 1117 of Title XI as amended by the Dodd-
Frank Act. The final rule requires AMC registry fees to be collected 
and transmitted to the ASC on an annual basis by States that elect to 
register and supervise AMCs. Only those AMCs whose registry fees have 
been transmitted to the ASC are eligible to be on the AMC Registry.
    The ASC requested comment on all aspects of proposed collection and 
transmission of annual AMC registry fees. (See Question 4 in the 
proposal.) One commenter stated that while it is understandable that 
States should have some flexibility in connection with the collection 
of registry fees, some boundaries or guidelines should be implemented 
within the final rule because varying State expiration dates could be 
financially and logistically challenging for AMCs. One commenter stated 
that the staggered renewal dates could complicate the reporting process 
and may be a burden to AMCs and States to maintain records. The 
commenter suggested the reporting period should be the same for every 
State. As proposed, the ASC recognizes that States should have the 
flexibility to align a one-year period with any 12-month period, which 
may or may not be based on the calendar year. Based on annual fees paid 
by the States historically for appraiser registry fees, the ASC 
recognizes States require flexibility to determine the period for 
reporting and collection of registry fees dependent on their budget 
cycles, rules and statutes. States vary greatly on the 12-month cycle 
as well as renewal cycles, which in some States may be 2 years or more. 
Just as many States do not use a calendar year for their existing 
appraiser credentialing process, the ASC believes that allowing States 
to set the 12-month period provides appropriate flexibility and will 
help States comply with the collection and transmission of AMC fees and 
reduce regulatory burden for State governments. States may choose to do 
this in a similar manner as they currently do for their appraisers, 
meaning some States have a date certain every year, while other States 
use, for example, the appraiser's date of birth (States could use AMC 
registration date similarly). The registration cycle is left to the 
individual States to determine, but the ASC notes that the statutory 
requirement in section 1109(a)(4) requires States to submit AMC 
registry fees to the ASC annually.\19\
---------------------------------------------------------------------------

    \19\ See Title XI sec. 1109(a)(4)(B), 12 U.S.C. 3338(a)(4)(B).
---------------------------------------------------------------------------

    Several other commenters expressed concern over the additional 
burden on States to collect and transmit information and fees to the 
ASC and the need for additional funding and staff. Another commenter 
stated the ASC should consider implementing a centralized computer 
system for collecting AMC registry fees, and use some of the fees to 
provide grants to States to set up and run their AMC programs. The ASC 
will continue to work with States to address increased burden and will 
continue to explore means to provide additional grant funding to the 
States to support State programs as funds are available and additional 
grant policies and procedures are developed and approved.
    One commenter objected to States levying additional fees on AMCs to 
cover the costs of collecting and transmitting fees to the ASC. This 
commenter referenced the AMC Rule stating in its preamble the option 
for States to collect administrative fees from Federally regulated AMCs 
to offset the cost of collecting the AMC Registry fee and the 
information related to the fee. The ASC understands the basis for the 
concern, but recognizes this is a matter left to the States.
    The ASC requested comment on Federally regulated AMCs operating in 
a State that does not elect to register and supervise AMCs, and whether 
the ASC should collect information and fees directly from those 
Federally regulated AMCs. (See Question 5 in the proposal.) The ASC 
received a number of comments in response to this question. One 
commenter expressed concerns about collecting fees from Federally 
regulated AMCs which are exempt from registration with the State. 
Another commenter stated that Federally regulated AMCs operating in a 
State that does not have an AMC program should report and submit fees 
directly to the ASC. A few commenters stated that the State would not 
have authority to collect fees from entities that are exempt from State 
licensure and they do not have authority to require that those entities 
submit data to the State Board and requested that the ASC collect the 
fees from those entities directly. Several commenters stated the ASC 
should collect fees directly from Federally regulated AMCs rather than 
the State acting as a pass-through. One commenter stated if the ASC 
sets up a program to collect fees from Federally regulated AMCs in 
States that do not register and supervise AMCs, the ASC should consider 
the same for States with an AMC program. Another commenter stated that 
States could choose to opt out due to the reported low percentage of 
FRTs compared to overall transactions, which would result in a barrier 
to collection of fees in those States. The ASC considered commenters' 
concerns, but recognizes the authority to impose requirements on 
Federally regulated AMCs lies with the Agencies.\20\ The ASC will work 
with the Agencies to address these concerns.
---------------------------------------------------------------------------

    \20\ OCC, Board, FDIC, NCUA, Bureau, and FHFA (see footnote 8).
---------------------------------------------------------------------------

    Some commenters expressed concern that even though they elect to 
register and supervise AMCs, they would have no authority over 
Federally regulated AMCs, and therefore no ability to accept 
information or fees from those AMCs. The ASC recognizes this may 
present a challenge for some States. However, for States that elect to 
register and supervise AMCs, the requirement to collect fees from 
Federally regulated AMCs is statutory. The Agencies \21\ involved with 
issuing the AMC Rule recognized that practical challenges may arise as 
the minimum requirements are adopted in States and reporting 
requirements take effect and the Agencies committed to monitor these 
issues. The ASC will monitor these issues as well and will continue to 
explore means to provide additional grant funding to the States to 
support State programs as funds are available and additional grant 
policies and procedures are developed and approved.
---------------------------------------------------------------------------

    \21\ Id.
---------------------------------------------------------------------------

    The ASC requested comment on what barriers, if any, exist that 
would make it difficult for a State to implement the collection and 
transmission of AMC registry fees (see Question 6 in the proposal) and 
what costs, both direct in terms of fees and indirect in terms of 
administrative costs, would be associated with collection and 
transmission of AMC registry fees (see Question 7 in the proposal). One 
commenter estimated that the burden for a State's program would be 25 
hours per month of staff time to complete and would cost approximately 
$6000 to design a database and $700/month for staff to maintain. 
Another commenter stated the proposed rule could negatively affect 
AMCs, consumers and real estate appraisers, as well as create burden 
for States. This commenter also stated AMCs will likely pass on fees to 
clients and therefore consumers. Another commenter stated costs may 
negatively affect smaller AMCs causing consolidation of AMCs. Another 
concern was that AMCs may pare down appraiser panels. The ASC 
recognizes the collection and transmission to the ASC of AMC registry 
fees by the States would create some recordkeeping, reporting and 
compliance requirements.

[[Page 44499]]

However, these collection and transmission requirements are imposed by 
the statute. The ASC will continue to work with States to address 
increased burden and will continue to explore means to provide 
additional grant funding to the States to support State programs as 
funds are available and additional grant policies and procedures are 
developed and approved.
    Several commenters requested that States should be allowed to send 
in multi-year registry fees rather than annually. Another commenter 
expressed concern that States could incur significant administrative 
costs to implement programming changes to their computer systems if 
they have to collect fees annually rather than multi-year fees as they 
do now for appraisers. If a State can assess on a multi-year basis, the 
ASC would not object. However, the ASC notes that the statutory 
requirement in section 1109(a)(4) requires States that elect to 
register and supervise AMCs to submit AMC registry fees to the ASC 
annually.\22\ For clarification purposes, language that was included at 
the end of proposed section 1102.403(b) referencing the ``12-month 
period subsequent to payment of the fee'' has been removed to avoid 
conflict should a State assess the fee on a multi-year basis.
---------------------------------------------------------------------------

    \22\ See Title XI sec. 1109(a)(4)(B), 12 U.S.C. 3338(a)(4)(B).
---------------------------------------------------------------------------

    Another commenter expressed the desire for the ASC to continue to 
accept data files for AMCs. Historically, the ASC accepted data files, 
and continues to do so on a limited basis for the Appraiser Registry. 
However, this method of transmitting rosters is obsolete and time 
consuming. The ASC has continued to improve the Appraiser Registry 
using more up-to-date transmission methods such as the extranet 
application and Simple Object Access Protocol (SOAP) in order to 
provide more real-time information on the National Registries. While 
the ASC recognizes this may impose additional burden on States, the ASC 
will continue to explore means to provide grant funding to the States 
to support State programs as funds are available and additional grant 
policies and procedures are developed and approved.
    Another commenter was concerned with specific collection and 
transmission scenarios and how various scenarios would impact 
determination of fees, calculation of panel size, transmission of fees, 
verification of fee calculation and audit requirements. Several of this 
commenter's concerns deal with logistics and will be part of the ASC 
Bulletin concerning reporting requirements which will be issued after 
this final rule. This commenter also wanted to know what timeline the 
ASC is considering between verification and remittance, similar to 
another commenter who stated there should be flexibility with the 
timing of payment of fees and the actual transmission of the fees, and 
that the final rule should add additional language that clearly 
addresses these potential gaps in order to avoid any unintended 
consequences. This is a matter that will be left to the States to 
administer within the following parameters: (1) AMC registry fees must 
be collected and transmitted to the ASC on an annual basis by States 
that elect to register and supervise AMCs; and (2) only those AMCs 
whose registry fees have been transmitted to the ASC are eligible to be 
on the AMC Registry.

IV. Regulatory Analysis

Paperwork Reduction Act

    Certain provisions of the final rule contain ``information 
collection'' requirements within the meaning of the Paperwork Reduction 
Act (PRA) of 1995 (44 U.S.C. 3501 et seq.). Under the PRA, the ASC may 
not conduct or sponsor, and, notwithstanding any other provision of 
law, a person is not required to respond to, an information collection 
unless the information collection displays a valid Office of Management 
and Budget (OMB) control number. The information collection 
requirements contained in this final rule were submitted to OMB for 
review and approval at the proposed rule stage by the ASC pursuant to 
section 3506 of the PRA and section 1320.11 of the OMB's implementing 
regulations (5 CFR part 1320). OMB instructed the ASC to examine public 
comment in response to the proposed rule and describe in the supporting 
statement of their next collections any public comments received 
regarding the collection as well as why (or why it did not) incorporate 
the commenter's recommendation. The ASC received 12 public comments 
regarding the collection and concern of burden on States, and two 
comments voiced concern that the ASC did not perform a cost benefit 
analysis. The ASC described the comments in the supporting statement 
above and the discussion below on the Regulatory Flexibility Act, and 
addressed why the ASC did not incorporate commenters' recommendations. 
The collection of information requirements in the final rule are found 
in Sec. Sec.  1102.400-1102.403. This information is required to 
implement section 1473 of the Dodd-Frank Act.
    Title of Information Collection: Collection and Transmission of 
Annual AMC Registry Fees.
    OMB Control Nos.: The ASC will be seeking new control numbers for 
these collections.
    Frequency of Response: Event generated.
    Affected Public: States; businesses or other for-profit and not-
for-profit organizations.
Abstract
State Recordkeeping Requirements
    States that elect to register and supervise AMCs are required to 
collect and transmit annual AMC registry fees to the ASC. Section 
1102.402 establishes the annual AMC registry fee for States that elect 
to register and supervise AMCs as follows: (1) In the case of an AMC 
that has been in existence for more than a year, $25 multiplied by the 
number of appraisers who have performed an appraisal for the AMC on a 
covered transaction in such State during the previous year; and (2) in 
the case of an AMC that has not been in existence for more than a year, 
$25 multiplied by the number of appraisers who have performed an 
appraisal for the AMC on a covered transaction in such State since the 
AMC commenced doing business.
    Section 1102.403 requires AMC registry fees to be collected and 
transmitted to the ASC on an annual basis by States that elect to 
register and supervise AMCs. Only those AMCs whose registry fees have 
been transmitted to the ASC will be eligible to be on the AMC Registry. 
Section 1102.403 clarifies that States may align a one-year period with 
any 12-month period, which may, or may not, be based on the calendar 
year. The registration cycle is left to the individual States to 
determine.
State Reporting Burden
    Section 1103 of Title XI, Functions of Appraisal Subcommittee, was 
amended by the Dodd-Frank Act to require the ASC to maintain a registry 
of AMCs that are either: (1) Registered with and subject to supervision 
by a State; or (2) Federally regulated AMCs. On or before the effective 
date of this rule, the ASC will issue an ASC Bulletin to States that 
will address:
    1. When the AMC Registry will be open for States; and
    2. Reporting requirements (information required to be submitted by 
States in order to register AMCs on the AMC Registry) with the 
effective date for compliance.

[[Page 44500]]

    Burden Estimates:
    Total Number of Respondents: 500 AMCs, 55 States.
    Burden Total: 500 hours.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., 
generally requires that, in connection with a rulemaking, an agency 
prepare and make available for public comment a regulatory flexibility 
analysis that describes the impact of the proposed rule on small 
entities. However, the regulatory flexibility analysis otherwise 
required under the RFA is not required if an agency certifies that the 
proposed rule will not have a significant economic impact on a 
substantial number of small entities and publishes its certification 
and a brief explanatory statement in the Federal Register together with 
the rule. Based on its analysis, and for the reasons stated below, the 
ASC believes that the rule will not have a significant economic impact 
on a substantial number of small entities.
    Section 1109 of Title XI provides that State appraiser certifying 
and licensing agencies that elect to register and supervise AMCs shall 
collect (1) from AMCs that have been in existence for more than a year, 
annual AMC registry fees in the amount of $25 (up to a maximum of $50) 
multiplied by the number of appraisers ``working for or contracting 
with'' an AMC in a State during the previous year; and (2) from AMCs 
that have not been in existence for more than a year, annual AMC 
registry fees in the amount of $25 (up to a maximum of $50) multiplied 
by an appropriate number to be determined by the ASC.\23\ The purpose 
of the statutory fee is to support the ASC's functions under Title XI. 
Because the ASC believes the minimum fee required by the statute would 
be adequate to support its functions, the rule adopts the minimum fee 
of $25 as set by statute. The rule also interprets the phrase ``working 
for or contracting with'' to mean those appraisers that performed an 
appraisal for the AMC on a covered transaction during the reporting 
period. For AMCs that have existed for more than a year, the formula is 
$25 multiplied by the number of appraisers who have performed an 
appraisal for the AMC on a covered transaction during the previous 
year. For AMCs that have not existed for more than a year, the $25 fee 
is multiplied by the number of appraisers that performed an appraisal 
for the AMC on a covered transaction since the AMC commenced doing 
business.
---------------------------------------------------------------------------

    \23\ See 12 U.S.C. 3338(a)(4)(B).
---------------------------------------------------------------------------

    Regarding the fee for AMCs that have been in existence for more 
than a year, the ASC believes the rule imposes the minimum fee allowed 
under the statutory provisions of section 1109. The ASC did not 
exercise statutory discretion granted to the ASC to increase the fee 
above $25. Further, the ASC interprets ``working for or contracting 
with'' to mean only those appraisers who actually performed an 
appraisal for the AMC, as opposed to all appraisers on the AMC's panel 
or all appraisers engaged, regardless of whether the assignment was 
completed. The ASC believes this formula results in the lowest fee 
allowed by the statute and the ASC chose not to exercise its authority 
to increase this minimum fee. Therefore, any burden produced is the 
result of statutory and not regulatory requirements.
    The ASC has also decided to adopt the statutory minimum fee of $25 
for AMCs that have not existed for more than a year. As required by 
statute, the ASC adopted an appropriate number against which to 
multiply the $25 fee. The ASC adopted the same multiple as used for 
AMCs that have existed for more than a year (i.e., the number of 
appraisers that have performed appraisal assignments for the AMC). It 
is possible that the ASC may have been able to adopt a multiple that 
would have resulted in a lower fee and would still be deemed 
appropriate. In this regard, the rule may have created a burden for 
AMCs that have not existed for more than a year, beyond the burden 
created by the statutory requirements alone. However, using the actual 
period of time since the AMC commenced doing business will maintain 
some consistency in the calculation of AMC registry fees to reduce 
administrative burden for the States.
    One commenter stated the proposed rule would have a large financial 
impact on smaller AMCs and community banks and credit unions, as well 
as appraisers, and asserted that the RFA requires analysis when the 
rule directly regulates small entities. This commenter stated that as 
an owner of a small AMC, regulatory fees proposed are burdensome, and 
as a national AMC, is opposed to paying for the same appraiser in 
different States, especially given that the AMC registry fee is on top 
of other State fees required by the States, and regulatory oversight 
seems ``duplicitous.'' Another commenter stated the proposed rule would 
affect thousands of small appraisal businesses as a result of AMCs 
passing the registry fee on to appraisers, and that the ASC should do 
extensive analysis on how the proposed rule will affect residential 
appraisers. The ASC shares in the concern but has no authority to 
regulate that issue. A few commenters indicated that some States are 
looking at regulating this issue at the State level. In support of 
those States, the ASC notes the fee imposed by statute is not a fee 
assessed on appraisers, but rather on AMCs. This commenter, similar to 
the previous commenter, also did not believe the requirements of 
section 609(a) of the RFA have been met and that the fee may force 
small AMCs out of business, as well as impact sole proprietorships that 
accept assignments from AMCs. This commenter went on to state that 
while the ASC is not required to adhere to Executive Order 12866 or 
issue cost benefit analysis, this commenter believes it is sound best 
practice.
    The ASC carefully considered these matters and concluded 
requirements under the rule are imposed by the statute, not the rule, 
and further, the requirements apply to those States that elect to 
register and supervise AMCs following the statutory scheme set forth in 
section 1473 of the Dodd-Frank Act. In addition, the RFA does not 
require an agency to conduct a small-entity impact analysis when the 
agency does not regulate the affected entities (AMCs, lenders, 
appraisers). The ASC's statutory oversight extends to State certifying 
and licensing agencies. Section 1109 of Title XI provides the framework 
and minimum fee to collect from AMCs for States that elect to register 
and supervise AMCs. The ASC believes the rule as proposed imposes the 
minimum fee of $25 allowed under the statutory provisions of section 
1109. The statute did provide latitude for the ASC to establish an 
appropriate number to multiply by $25 for AMCs that have not been in 
existence for a year. Using the actual period of time since the AMC 
commenced doing business will maintain some consistency in the 
calculation of AMC registry fees to reduce administrative burden for 
the States. The ASC did not exercise statutory discretion granted to 
the ASC to increase the fee above $25. Therefore, any burden produced 
is the result of statutory and not regulatory requirements.
    While some burden beyond the statutory requirements may have 
resulted from the rule for AMCs that have not existed for more than a 
year, the ASC does not believe the rule will have a significant 
economic impact on a substantial number of small entities. There are 
only approximately 500 AMCs operating in the United States. The

[[Page 44501]]

annual regulatory burden will only apply to new AMCs that have not 
existed for more than a year. Given the small number of AMCs currently 
in operation, it is unlikely that there will be a substantial number of 
AMCs that commence doing business in any given year. Further, the ASC 
adopted the lowest possible fee of $25. Therefore, the ASC does not 
believe that the exercise of its discretion in setting the fee formula 
for such AMCs will have a significant economic impact on a substantial 
number of small entities.
    The collection and transmission to the ASC of AMC registry fees by 
the States would create some recordkeeping, reporting and compliance 
requirements. However, these collection and transmission requirements 
are imposed by the statute, not the rule. Further, the RFA requires an 
agency to perform a regulatory flexibility analysis of small entity 
impacts when the agency's rule directly regulates the small 
entities.\24\
---------------------------------------------------------------------------

    \24\ For purposes of assessing the impacts of the proposed rule 
on small entities, ``small entities'' is defined in the RFA to 
include small businesses, small not-for-profit organizations, and 
small government jurisdictions. See 5 U.S.C. 601(6). A ``small 
business'' is determined by application of SBA regulations and 
reference to the North American Industry Classification System 
(NAICS) classifications and size standards. See 5 U.S.C. 601(3). A 
``small organization'' is any ``not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
5 U.S.C. 601(4). A ``small governmental jurisdiction'' is the 
government of a city, county, town, township, village, school 
district, or special district with a population of less than 50,000. 
See 5 U.S.C. 601(5). Given these definitions, States that elect to 
establish licensing and certification authorities are not small 
entities and the burden on them is not relevant to this analysis.
---------------------------------------------------------------------------

    Based on its analysis, and for the reasons stated above, the ASC 
believes that the rule will not have a significant economic impact on a 
substantial number of small entities. Therefore, the ASC certifies that 
the final rule will not have a significant economic impact on a 
substantial number of small entities.

Unfunded Mandates Reform Act of 1995 Determination

    The ASC has analyzed the final rule under the factors in the 
Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1532). Under this 
analysis, the ASC considered whether the final rule includes a Federal 
mandate that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year (adjusted annually for inflation). For 
the following reasons, the ASC finds that the final rule does not 
trigger the $100 million UMRA threshold. The costs specifically related 
to requirements set forth in statute are excluded from expenditures 
under the UMRA. Given that the final rule reflects requirements that 
arise from section 1473 of the Dodd-Frank Act, the UMRA cost estimate 
for the proposed rule is zero. For this reason, and for the other 
reasons cited above, the ASC has determined that this final rule will 
not result in expenditures by State, local, and tribal governments, or 
the private sector, of $100 million or more in any one year. 
Accordingly, this proposed rule is not subject to section 202 of the 
UMRA.

List of Subjects in 12 CFR Part 1102

    Administrative practice and procedure, Appraisers, Banks, Banking, 
Freedom of information, Mortgages, Reporting and recordkeeping 
requirements.

Authority and Issuance

    For the reasons set forth in the preamble, the ASC amends 12 CFR 
part 1102 as follows:

PART 1102--APPRAISER REGULATION

0
1. The authority citation for part 1102 is revised to read as follows:

    Authority:  12 U.S.C. 3348(a), 3332, 3335, 3338 (a)(4)(B), 
3348(c), 5 U.S.C. 552a, 553(e); Executive Order 12600, 52 FR 23781 
(3 CFR, 1987 Comp., p. 235).


0
2. Subpart E to part 1102 is added to read as follows:
Subpart E--Collection and Transmission of Appraisal Management Company 
(AMC) Registry Fees
Sec.
1102.400 Authority, purpose, and scope.
1102.401 Definitions.
1102.402 Establishing the annual AMC registry fee.
1102.403 Collection and transmission of annual AMC registry fees.

Subpart E--Collection and Transmission of Appraisal Management 
Company (AMC) Registry Fees


Sec.  1102.400   Authority, purpose, and scope.

    (a) Authority. This subpart is issued by the Appraisal Subcommittee 
(ASC) under sections 1106 and 1109 (a)(4)(B) of Title XI of the 
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 
(Title XI), as amended by the Dodd-Frank Wall Street Reform and 
Consumer Protection Act (Dodd-Frank Act) (Pub. L. 111-203, 124 Stat. 
1376 (2010)), 12 U.S.C. 3335, 3338 (a)(4)(B)).
    (b) Purpose. The purpose of this subpart is to implement section 
1109 (a)(4)(B) of Title XI, 12 U.S.C. 3338.
    (c) Scope. This subpart applies to States that elect to register 
and supervise appraisal management companies pursuant to 12 U.S.C. 3346 
and 3353, and the regulations promulgated thereunder.


Sec.  1102.401   Definitions.

    For purposes of this subpart:
    (a) AMC Registry means the national registry maintained by the ASC 
of those AMCs that meet the Federal definition of AMC, as defined in 12 
U.S.C. 3350(11), are registered by a State or are Federally regulated, 
and have paid the annual AMC registry fee.
    (b) AMC Rule means the interagency final rule on minimum 
requirements for 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).
    (c) ASC means the Appraisal Subcommittee of the Federal Financial 
Institutions Examination Council established under section 1102 (12 
U.S.C. 3310) as it amended the Federal Financial Institutions 
Examination Council Act of 1978 (12 U.S.C. 3301 et seq.) by adding 
section 1011.
    (d) Performed an appraisal means the appraisal service requested of 
an appraiser by the AMC was provided to the AMC.
    (e) State means any State, the District of Columbia, the 
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, Guam, the United States Virgin Islands, and American Samoa.
    (f) Other terms. Definitions of: Appraisal management company 
(AMC); appraisal management services; appraisal panel; consumer credit; 
covered transaction; dwelling; Federally regulated AMC are incorporated 
from the AMC Rule by reference.


Sec.  1102.402   Establishing the annual AMC registry fee.

    The annual AMC registry fee to be applied by States that elect to 
register and supervise AMCs is established as follows:
    (a) In the case of an AMC that has been in existence for more than 
a year, $25 multiplied by the number of appraisers who have performed 
an appraisal for the AMC in connection with a covered transaction in 
such State during the previous year; and
    (b) In the case of an AMC that has not been in existence for more 
than a year, $25 multiplied by the number of appraisers who have 
performed an appraisal for the AMC in connection with a covered 
transaction in such State since the AMC commenced doing business.

[[Page 44502]]

Sec.  1102.403   Collection and transmission of annual AMC registry 
fees.

    (a) Collection of annual AMC registry fees. States that elect to 
register and supervise AMCs pursuant to the AMC Rule shall collect an 
annual registry fee as established in Sec.  1102.402 from AMCs eligible 
to be on the AMC Registry.
    (b) Transmission of annual AMC registry fee. States that elect to 
register and supervise AMCs pursuant to the AMC Rule shall transmit AMC 
registry fees as established in Sec.  1102.402 to the ASC on an annual 
basis. States may align a one-year period with any 12-month period, 
which may, or may not, be based on the calendar year. Only those AMCs 
whose registry fees have been transmitted to the ASC will be eligible 
to be on the AMC Registry.

    By the Appraisal Subcommittee.

     Dated: September 13, 2017.
Arthur Lindo,
Chairman.
[FR Doc. 2017-20400 Filed 9-22-17; 8:45 am]
 BILLING CODE 6700-01-P



                                                                                                                                                                                                             44493

                                                  Rules and Regulations                                                                                          Federal Register
                                                                                                                                                                 Vol. 82, No. 184

                                                                                                                                                                 Monday, September 25, 2017



                                                  This section of the FEDERAL REGISTER                    Protective Service, joshua.s.vayer@                    secure the property at or near the border
                                                  contains regulatory documents having general            hq.dhs.gov.                                            wall prototype and fence replacement
                                                  applicability and legal effect, most of which                                                                  project areas, including, but not limited
                                                  are keyed to and codified in the Code of                SUPPLEMENTARY INFORMATION:
                                                                                                                                                                 to, project sites, staging areas, access
                                                  Federal Regulations, which is published under           Background                                             roads, and buildings temporarily erected
                                                  50 titles pursuant to 44 U.S.C. 1510.
                                                                                                            Pursuant to section 1706 of the                      to support construction activities, I
                                                  The Code of Federal Regulations is sold by              Homeland Security Act of 2002, 40                      temporarily extended the applicability,
                                                  the Superintendent of Documents.                        U.S.C. 1315(a); Public Law 107–296, 116                allowing the enforcement, of regulations
                                                                                                          Stat. 2135 (Nov. 25, 2002), the Secretary              governing the conduct of individuals on
                                                                                                          of Homeland Security is responsible for                federal property to areas in or around
                                                  DEPARTMENT OF HOMELAND                                  protecting the buildings, grounds, and                 the fence replacement and border wall
                                                  SECURITY                                                property owned, occupied, or secured                   prototype project areas, pursuant to 40
                                                                                                          by the Federal Government (including                   U.S.C. 1315(d)(2)(A). The project areas
                                                  Office of the Secretary                                                                                        for border wall prototype and fence
                                                                                                          any agency, instrumentality, or wholly
                                                                                                          owned or mixed ownership corporation                   replacement are situated within a
                                                  6 CFR Chapter I                                                                                                geographic area that starts at the Pacific
                                                                                                          thereof) and the persons on the
                                                  Temporary Extension of Applicability                    property. To carry out this mandate, the               Ocean and extends to approximately
                                                  of Regulations Governing Conduct on                     Department is authorized to enforce the                one mile east of Border Monument 251.
                                                  Federal Property                                        applicable Federal regulations for the                 Specifically, I temporarily extended the
                                                                                                          protection of persons and property set                 applicability, allowing the enforcement,
                                                  AGENCY:  Office of the Secretary,                       forth in 41 CFR 102–74, subpart C.1                    of the regulations in 41 CFR part 102–
                                                  Department of Homeland Security.                        These regulations govern conduct on                    74, subpart C, to any property owned or
                                                  ACTION: Notification of temporary                       federal property and set forth the                     occupied by the Federal Government at
                                                  extension of the applicability of                       relevant criminal penalties. Although                  or near the fence replacement and
                                                  regulations.                                            these regulations apply to all property                border wall prototype project areas near
                                                                                                          under the authority of the General                     the city of San Diego.
                                                  SUMMARY:    The Acting Secretary of                                                                               The regulations in 41 CFR part 102–
                                                                                                          Services Administration and to all
                                                  Homeland Security, pursuant to the                                                                             74, subpart C, will remain applicable
                                                                                                          person entering in or on such property,2
                                                  Homeland Security Act of 2002, has                                                                             and enforceable at these locations for
                                                                                                          the Secretary of Homeland Security is
                                                  temporarily extended the applicability                                                                         the duration of the construction related
                                                                                                          authorized pursuant to 40 U.S.C.
                                                  of certain regulations governing conduct                                                                       to the fence replacement and border
                                                                                                          1315(d)(2)(A) to extend the applicability
                                                  on federal property to certain areas                                                                           wall prototypes near the city of San
                                                                                                          of and to enforce these regulations to
                                                  within the United States Border Patrol’s                                                                       Diego.
                                                                                                          any property owned or occupied by the
                                                  San Diego Sector allowing for their
                                                                                                          Federal Government.                                    Elaine C. Duke,
                                                  enforcement. This temporary
                                                  administrative extension enables the                    Temporary Extension of Applicability                   Acting Secretary of Homeland Security.
                                                  Department of Homeland Security                         of Regulations Governing Conduct on                    [FR Doc. 2017–20383 Filed 9–22–17; 8:45 am]
                                                  (DHS) to protect and secure Federal                     Federal Property to Certain Areas in                   BILLING CODE 4410–10–P
                                                  property at or near the project areas for               the Vicinity of the Border Near the City
                                                  border wall prototypes and fence                        of San Diego
                                                  replacement near the city of San Diego,                   DHS is replacing existing border fence               FEDERAL FINANCIAL INSTITUTIONS
                                                  including but not limited to, project                   with bollard wall and constructing                     EXAMINATION COUNCIL
                                                  sites, staging areas, access roads, and                 border wall prototypes near the city of
                                                  buildings temporarily erected to support                San Diego in the United States Border                  12 CFR Part 1102
                                                  construction activities and to carry out                Patrol’s San Diego Sector pursuant to
                                                  its statutory obligations to protect and                                                                       [Docket No. AS17–07]
                                                                                                          several statutory and executive
                                                  secure the nation’s borders. The project                directives.3 In order to protect and                   Collection and Transmission of Annual
                                                  areas for border wall prototype and
                                                                                                                                                                 AMC Registry Fees
                                                  fence replacement are situated within a                    1 Although these regulations were issued prior to
                                                  geographic area that starts at the Pacific              the Homeland Security Act, per section 1512 of the     AGENCY:  Appraisal Subcommittee of the
                                                  Ocean and extends to approximately                      Act, these regulations remain the relevant             Federal Financial Institutions
                                                  one mile east of Border Monument 251.                   regulations for purposes of the protection and
                                                                                                          administration of property owned or occupied by        Examination Council (ASC).
                                                  DATES: Pursuant to 40 U.S.C. 1315(d),                   the Federal Government.                                ACTION: Final rule.
                                                  the extension began on September 19,                       2 See 41 CFR 102–74.365.
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                                                  2017 and will continue for the duration                    3 The statutory and executive directives relating

                                                  of the construction activities related to               to the construction of the border wall prototypes      2006, Public Law 109–367, section 3, 120 Stat. 2638
                                                                                                          include, but are not limited to, section 102 of the    (Oct. 26, 2006) (8 U.S.C. 1103 note), as amended by
                                                  the fence replacement and border wall                   Illegal Immigration Reform and Immigrant               the Department of Homeland Security
                                                  prototype projects near the city of San                 Responsibility Act of 1996, Public Law 104–208,        Appropriations Act, 2008, Public Law 110–161,
                                                  Diego.                                                  Div. C, 110 Stat. 3009–546, 3009–554 (Sept. 30,        Div. E, Title V, section 564, 121 Stat. 2090 (Dec. 26,
                                                                                                          1996) (8 U.S.C. 1103 note), as amended by the          2007) (8 U.S.C. 1103 note), Section 2 of the Secure
                                                  FOR FURTHER INFORMATION CONTACT:
                                                                                                          REAL ID Act of 2005, Public Law 109–13, Div. B,        Fence Act of 2006, Public Law 109–367, 120 Stat.
                                                  Joshua A. Vayer, Division Director,                     119 Stat. 231, 302, 306 (May 11, 2005) (8 U.S.C.       2638 (Oct. 26, 2006) (8 U.S.C. 1701 note), and E.O.
                                                  Protective Operations Division, Federal                 1103 note), as amended by the Secure Fence Act of      13767.



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                                                  44494            Federal Register / Vol. 82, No. 184 / Monday, September 25, 2017 / Rules and Regulations

                                                  SUMMARY:   The ASC is adopting a final                  supervise AMCs under Section 1117                        36-month period that began when the
                                                  rule to implement collection and                        must implement minimum                                   AMC Rule became effective
                                                  transmission of appraisal management                    requirements in accordance with the                      (Implementation Period).11 The ASC
                                                  company (AMC) annual registry fees in                   AMC Rule.8                                               recognizes that States electing to register
                                                  the Dodd-Frank Wall Street Reform and                      Section 1103 of Title XI,9 Functions of               and supervise AMCs may need to
                                                  Consumer Protection Act (Dodd-Frank                     Appraisal Subcommittee, was amended                      amend their rules and/or regulations, or
                                                  Act) to be applied by State appraiser                   by the Dodd-Frank Act to require the                     revise their operating procedures in
                                                  certifying and licensing agencies that                  ASC to maintain the AMC Registry of                      order to implement AMC registry fees.
                                                  elect to register and supervise AMCs,                   those AMCs that are either:                              Given the limited period of time
                                                  pursuant to 12 U.S.C. 3353 and the                         (1) Registered with and subject to                    between publication of this final rule
                                                  regulations promulgated thereunder.                     supervision by a State that has elected                  and the expiration of the
                                                  DATES: Effective date. This final rule                  to register and supervise AMCs; or (2)                   Implementation Period, States may not
                                                  will become effective on November 24,                   are operating subsidiaries of a Federally                be able to implement the AMC registry
                                                  2017.                                                   regulated financial institution (Federally               fees within the Implementation Period.
                                                  FOR FURTHER INFORMATION CONTACT:                        regulated AMCs). On or before the                        As discussed further below in the
                                                  James R. Park, Executive Director, at                   effective date of this rule, the ASC will                subsection Collection and transmission
                                                  (202) 595–7575, or Alice M. Ritter,                     issue an ASC Bulletin to States that will                of annual AMC registry fees, only those
                                                  General Counsel, at (202) 595–7577,                     address:                                                 AMCs whose registry fees have been
                                                  Appraisal Subcommittee, 1401 H Street                      1. When the AMC Registry will be                      transmitted to the ASC are eligible to be
                                                  NW., Suite 760, Washington, DC 20005.                   open for States; and                                     on the AMC Registry. While the ASC
                                                  SUPPLEMENTARY INFORMATION:                                 2. Reporting requirements                             encourages States that elect to register
                                                                                                          (information required to be submitted                    and supervise AMCs to begin collecting
                                                  I. Background                                           by States in order to register AMCs on                   fees from registered AMCs as soon as
                                                     Section 1473 of the Dodd-Frank Act 1                 the AMC Registry) with the effective                     possible in accordance with the
                                                  included amendments to Title XI of the                  date for compliance.                                     requirements of Section 1109 of Title XI
                                                  Financial Institutions Reform, Recovery,                   Title XI as amended by the Dodd-                      so that those AMCs may be entered on
                                                  and Enforcement Act of 1989 2 (Title                    Frank Act imposes a statutory                            the AMC Registry, the restriction on
                                                  XI). Section 1109 of Title XI,3 Roster of               restriction on performance of services                   performance of services for FRTs will
                                                  State certified or licensed appraisers;                 by AMCs for a federally related                          not impact an AMC so long as the AMC
                                                  authority to collect and transmit fees,                 transaction (FRT) 10 that applies after a                is registered with a State that has
                                                  was amended by the Dodd-Frank Act to                                                                             elected to register and supervise AMCs,
                                                  require States 4 that elect to register and             in part, an external third party that oversees a         or is subject to oversight by a Federal
                                                                                                          network or panel of more than 15 appraisers, who         financial institutions regulatory agency.
                                                  supervise AMCs to collect: (1) From                     are State certified or licensed in a State, or 25 or
                                                  AMCs that have been in existence for                    more appraisers nationally (two or more States)             On May 20, 2016, the ASC published
                                                  more than a year an annual registry fee                 within a given year. (See 12 U.S.C. 3350(11)). Title     a proposed rule with a 60-day public
                                                  of $25 multiplied by the number of                      XI as amended by the Dodd-Frank Act also allows          comment period on implementation of
                                                                                                          States to adopt requirements in addition to those in
                                                  appraisers working for or contracting                   the AMC Rule. (See 12 U.S.C. 3353(b)). For               the annual AMC registry fee that States
                                                  with such AMC in such State during the                  example, States may decide to supervise entities         would collect and transmit to the ASC
                                                  previous year; and (2) from AMCs that                   that provide appraisal management services, but do       if they elect to register and supervise
                                                  have not been in existence for more than                not meet the size thresholds of the Title XI             AMCs.12 This final rule sets the fee
                                                                                                          definition of AMC. If a State has a more expansive
                                                  a year, $25 multiplied by an appropriate                regulatory framework that covers entities that           formula that States would apply in
                                                  number to be determined by the ASC.                     provide appraisal management services but do not         collecting annual AMC registry fees and
                                                  Such $25 amount may be adjusted, up                     meet the Title XI definition of AMC, the State           transmitting those fees to the ASC.
                                                  to a maximum of $50, at the discretion                  should only submit information regarding AMCs
                                                                                                          meeting the Title XI definition to the AMC Registry.     II. The Final Rule
                                                  of the ASC, if necessary to carry out the                  8 The Dodd-Frank Act added section 1124 to Title
                                                  ASC’s Title XI functions.5                              XI, Appraisal Management Company Minimum                    The final rule: (1) Establishes the
                                                     Section 1117 of Title                                Requirements, which required the Office of the           annual AMC registry fee in section 1109
                                                  XI,6 Establishment of State appraiser                   Comptroller of the Currency (OCC); Board of              of Title XI for AMCs in those States
                                                  certifying and licensing agencies, was                  Governors of the Federal Reserve System (Board);
                                                                                                          Federal Deposit Insurance Corporation (FDIC);            electing to register and supervise AMCs;
                                                  amended by the Dodd-Frank Act to                        National Credit Union Administration (NCUA);             and (2) implements collection and
                                                  include additional duties for States, if                Bureau of Consumer Financial Protection (Bureau);        transmission of AMC registry fees as
                                                  they so choose, to: (1) Register and                    and Federal Housing Finance Agency (FHFA) to             required by section 1109. The final rule
                                                  supervise AMCs; and (2) add                             establish, by rule, minimum requirements for the
                                                                                                          registration and supervision of AMCs by States that      sets forth the ASC’s interpretation of the
                                                  information about AMCs in their State                   elect to register and supervise AMCs pursuant to         phrase ‘‘working for or contracting
                                                  to the National Registry of AMCs (AMC                   Title XI and the rules promulgated thereunder. The       with’’ for purposes of calculating the
                                                  Registry).7 States electing to register and             Agencies issued a final rule (AMC Rule) with an          annual AMC registry fee.
                                                                                                          effective date of August 10, 2015. (80 FR 32658,
                                                    1 Public                                              June 9, 2015).
                                                             Law 111–203, 124 Stat. 1376.
                                                    2 Public
                                                                                                             9 12 U.S.C. 3332.                                     Title XI appraisal regulations. (FFIEC report to
                                                             Law 101–73, 103 Stat. 183.                      10 A federally related transaction includes any       Congress, Economic Growth and Regulatory
                                                    3 12 U.S.C. 3338.
                                                                                                          real estate-related financial transaction which: (a) A   Paperwork Reduction Act, 82 FR 15900 (March 30,
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                                                    4 As of January, 2017, the 50 States, the District
                                                                                                          Federal financial institutions regulatory agency         2017).
                                                  of Columbia, and four Territories, which are the        engages in, contracts for, or regulates; and (b)            11 See 12 U.S.C. 3353(f)(1). In summary,
                                                  Commonwealth of Puerto Rico, Commonwealth of            requires the services of an appraiser. See Title XI      beginning 36 months from the effective date of the
                                                  the Northern Mariana Islands, Guam, and United          sec. 1121 (4), 12 U.S.C. 3350), implemented by the       AMC Rule, an AMC, as defined by Title XI, may not
                                                  States Virgin Islands, had State appraiser certifying   OCC: 12 CFR 34.42(f) and 34.43(a); Board: 12 CFR         provide services for FRTs in a State unless the AMC
                                                  and licensing agencies.                                 225.62(f) and 225.63(a); FDIC: 12 CFR 323.2(f) and       is registered with the State pursuant to a
                                                    5 See 12 U.S.C. 3338(a)(4)(B).
                                                                                                          323.3(a); and NCUA: 12 CFR 722.2(f) and 722.3(a).        registration and supervision program established
                                                    6 12 U.S.C. 3346.                                                                                              under Section 1117, or is subject to oversight by a
                                                                                                          Based on 2014 Home Mortgage Disclosure Act
                                                    7 Title XI as amended by the Dodd-Frank Act           (HMDA) data, at least 90 percent of residential          Federal financial institutions regulatory agency.
                                                  defines ‘‘appraisal management company’’ to mean,       mortgage loan originations are not subject to the           12 81 FR 31868 (May 20, 2016).




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                                                                   Federal Register / Vol. 82, No. 184 / Monday, September 25, 2017 / Rules and Regulations                                               44495

                                                     For the reasons discussed in section                 § 1102.401(d) is being corrected to                   appraisal for the AMC on a covered
                                                  III of this SUPPLEMENTARY INFORMATION,                  define performed an appraisal, which                  transaction during the previous year in
                                                  the final rule adopts the rule                          conforms to the actual phrase used                    a particular State.
                                                  substantially as proposed. The final rule               throughout the rule, to mean the                         For AMCs that have not been in
                                                  contains technical, nonsubstantive                      appraisal service requested of an                     existence for more than a year, the
                                                  changes.                                                appraiser by the AMC was provided to                  statute requires a determination by the
                                                                                                          the AMC. The ASC is adopting this                     ASC of an appropriate multiplier to
                                                  III. The Final Rule and Public
                                                                                                          definition without substantive change as              calculate registry fees for those AMCs.
                                                  Comments on the Proposed Rule
                                                                                                          § 1102.401(d) in the final rule. One                  The ASC proposed to use the same
                                                     The following is a section-by-section                commenter questioned whether this                     factors of $25 multiplied by the number
                                                  review of the proposed rule and a                       referred to initial submission of the                 of appraisers that performed an
                                                  discussion of the public comments                       report or when the appraisal has been                 appraisal for the AMC on a covered
                                                  received by the ASC concerning the                      reviewed and accepted by the client in                transaction, but the fee would be based
                                                  proposal. The ASC received 104                          its final form. The ASC recognizes that               on the actual period of time since the
                                                  comment letters in response to the                      the issue may be complicated by the                   AMC commenced doing business rather
                                                  published proposal. These comment                       ongoing debate within the profession                  than 12 months. For example, if an
                                                  letters were received from State                        concerning when an appraisal is                       AMC has been operating for 6 months,
                                                  appraiser certifying and licensing                      complete. The ASC is adopting the                     the fee would be calculated by
                                                  agencies, AMCs, appraiser and real                      definition as proposed, intending for the             multiplying $25 by the number of
                                                  estate trade associations, professional                 terms to remain subject to a plain                    appraisers that performed an appraisal
                                                  associations, appraisal firms and                       English interpretation. Another                       for the AMC on a covered transaction
                                                  appraisers.                                             commenter requested a definition of                   during that 6-month period.
                                                  A. Section 1102.401 Definitions                         ‘‘appraisal service’’ be included in the                 One commenter stated the ASC
                                                                                                          final rule. The ASC recognizes that                   should identify what it will do with
                                                    The ASC requested comment on all                      various appraisal services could be                   revenue from AMC registry fees and
                                                  aspects of the proposed rule. The                       requested, including an appraisal                     suggested the ASC should consider
                                                  following is a discussion of the                        review, and therefore declines to define              decreasing the fee to less than $25
                                                  definitions, related public comments                    the phrase, recognizing that States can               which would still allow the ASC plenty
                                                  and issues relating to those definitions.               be more restrictive. In general,                      of funds to perform its Title XI-related
                                                  Definitions on which the ASC did not                    commenters supported the proposed                     functions. The commenter asserted the
                                                  receive comment are not discussed                       definition.                                           ASC has discretion to do so. However,
                                                  below and are adopted without change
                                                                                                          Establishing the Annual AMC Registry                  section 1109(a)(4), by its plain terms,
                                                  in the final rule.
                                                    The ASC is adopting the definitions                   Fee                                                   sets the minimum fee allowed under the
                                                  substantially as proposed, including                                                                          statutory framework at $25. The statute
                                                                                                             The ASC is adopting proposed                       did provide latitude for the ASC to
                                                  cross-references to the definitions                     § 1102.402 without change. Section
                                                  established in the AMC Rule. Several                                                                          establish an appropriate number to
                                                                                                          1102.402 establishes the annual AMC                   multiply by $25 for AMCs that have not
                                                  commenters requested that the cross-                    registry fee for States that elect to
                                                  referenced definitions be included in                                                                         been in existence for more than a year.
                                                                                                          register and supervise AMCs as follows:               Using the actual period of time since the
                                                  the final rule rather than as proposed by                  (1) In the case of an AMC that has
                                                  cross reference to definitions in the                                                                         AMC commenced doing business will
                                                                                                          been in existence for more than a year,               maintain some consistency in the
                                                  AMC Rule. However, if the ASC were to                   $25 multiplied by the number of
                                                  adopt the approach suggested by these                                                                         calculation of AMC registry fees to
                                                                                                          appraisers who have performed an                      reduce administrative burden for the
                                                  commenters, in the event those AMC                      appraisal for the AMC on a covered
                                                  Rule definitions are amended by the                                                                           States. Based on the ASC’s anticipated
                                                                                                          transaction in such State during the                  costs of overseeing States that elect to
                                                  interagency process in the future,                      previous year; and (2) in the case of an
                                                  definitions included in this rule would                                                                       register and supervise AMCs, as well as
                                                                                                          AMC that has not been in existence for                the ASC’s anticipated costs of
                                                  become inaccurate and inconsistent. To                  more than a year, $25 multiplied by the
                                                  avoid that circumstance, the ASC is                                                                           maintaining the AMC Registry, the ASC
                                                                                                          number of appraisers who have                         believes the proposed annual AMC
                                                  adopting the definitions as proposed                    performed an appraisal for the AMC on
                                                  with cross-reference to those definitions                                                                     registry fee would cover those costs
                                                                                                          a covered transaction in such State since             while supporting other Title XI
                                                  established by the AMC Rule.                            the AMC commenced doing business.
                                                    One commenter expressed concern                                                                             functions of the ASC as mandated by
                                                                                                             For AMCs that have been in existence
                                                  over the definition of ‘‘appraiser panel’’                                                                    Congress, and in particular, further
                                                                                                          for more than a year, section 1109 of
                                                  stating AMCs should not be penalized                                                                          development of its grant programs,
                                                                                                          Title XI provides that the annual AMC
                                                  over other providers of appraisal                                                                             particularly to support States as funds
                                                                                                          registry fee is based on the number of
                                                  services, and included discussion on                                                                          are available.
                                                                                                          appraisers ‘‘working for or contracting
                                                  appraisal firms and AMCs. This                                                                                   The ASC considered three options
                                                                                                          with’’ an AMC in a State during a 12-
                                                  commenter quoted language from the                                                                            with respect to interpreting the phrase
                                                                                                          month period multiplied by $25, but
                                                  AMC Rule on appraisal firms. Another                                                                          ‘‘working for or contracting with.’’
                                                                                                          where such $25 amount may be
                                                  commenter expressed concern that the                                                                          Under the first option, the phrase
                                                                                                          adjusted up to a maximum of $50.13 The
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                                                  definition of ‘‘appraiser panel’’ should                                                                      ‘‘working for or contracting with’’
                                                                                                          final rule adopts the minimum fee of                  would have been interpreted to include
                                                  only include independent contractors                    $25 as set by statute and interprets the
                                                  and not employees. The issues raised by                                                                       every appraiser on an AMC appraiser
                                                                                                          phrase ‘‘working for or contracting                   panel during the reporting period 14 in
                                                  these commenters were determined in                     with’’ to mean those appraisers on an
                                                  the interagency AMC Rule during that                    AMC appraiser panel that performed an                   14 In the case of AMCs that have been in existence
                                                  rulemaking process.                                                                                           for more than a year, the reporting period would be
                                                    Proposed § 1102.401(d) defined                          13 See Title XI sec. 1109(a)(4)(B), 12 U.S.C.       12 months. In the case of an AMC that has not been
                                                  performance of an appraisal. Proposed                   3338(a)(4)(B).                                                                                   Continued




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                                                  44496            Federal Register / Vol. 82, No. 184 / Monday, September 25, 2017 / Rules and Regulations

                                                  a particular State. The multiplier in this              for future appraisal assignments as well              AMC could also be deemed delivery to
                                                  option would have included all                          as appraisers who performed appraisals                the client. The ASC is adopting the
                                                  appraisers on an AMC’s appraiser panel                  in the past, but did not perform any                  interpretation as proposed, intending for
                                                  in a particular State, including                        appraisals in the reporting period. The               the terms to remain subject to a plain
                                                  appraisers accepted by the AMC for                      AMC registry fee is not intended to                   English interpretation.
                                                  consideration for future appraisal                      result in an appraiser being counted                     The ASC also requested comment on
                                                  assignments. One commenter stated this                  twice in calculating the fee, regardless              what aspects of the proposed rule, if
                                                  option would likely penalize AMCs for                   of how many appraisals that appraiser                 any, would be challenging for States to
                                                  adding appraisers to their roster for                   performed in a single State during a                  implement and any alternative
                                                  future use, and would also be                           reporting period. A few commenters                    approaches that would make
                                                  burdensome for States. Another                          misunderstood the proposed application                implementation easier, while
                                                  commenter stated the interpretation                     of the fee and thought the fee would be               maintaining consistency with the
                                                  under the first option would be the                     calculated based on the total number of               statute. (See Question 8 in the proposal.)
                                                  easiest for States. The ASC remains                     individual appraisers on an AMC panel,                Several commenters expressed concern
                                                  concerned that this option would                        or that the fee would be imposed based                that the proposed rule would create
                                                  impose the most burden to AMCs and                      on individual appraisals, neither of                  significant administrative burden on the
                                                  impose the highest registry fees.                       which is consistent with the proposal or              State to calculate and verify registry
                                                     Under the second option, the phrase                  the final rule.                                       fees, and would also result in
                                                  ‘‘working for or contracting with’’                        Several commenters expressed                       expenditures to administer and transmit
                                                  would have been interpreted to include                  support for the third option as having                the registry fees. Some commenters are
                                                  those appraisers engaged by the AMC to                  the least economic impact to an AMC,                  opposed to the fee in general, while a
                                                  perform an appraisal on a covered                       the least burden for appraisers and                   few expressed opposition to AMCs. A
                                                  transaction during the reporting period                 preferable from a State administrative                few commenters suggested no action
                                                  in a particular State. Under this option,               point of view. A few commenters                       should be taken until the Dodd-Frank
                                                  those appraisers engaged by the AMC to                  expressed support for the third option                Act is amended. One commenter stated
                                                  perform an appraisal, regardless of                     but believed it would be a burden for                 the ASC should seek legislative changes
                                                  whether the appraiser completed the                     States to collect information from                    to 12 U.S.C. 3338 asserting it is
                                                  appraisal during the reporting period,                  AMCs. One commenter, while stating                    fundamentally flawed, and requested
                                                  would be included in the calculation of                 the third option is costly to AMCs,                   withdrawal of the proposed rule until
                                                  the AMC’s registry fees.                                stated that the third option would be the             the federal statute is changed. The ASC,
                                                     The ASC requested comment on the                     most equitable as it applies to those                 however, is charged with
                                                  second option’s interpretation of the                   appraisers who had completed appraisal                implementation of the statute as passed
                                                  phrase ‘‘working for or contracting                     assignments, and that the first two                   by Congress.
                                                  with’’ and whether this would be an                     options may cause AMCs to pare their                     One commenter stated that the 500
                                                  easier interpretation for the States to                 appraiser panels. One commenter stated                hours of regulatory burden is
                                                  administer. (See Question 3 in the                      the third option would also simplify the              understated, and added States should be
                                                  proposal.) Several commenters                           queries that States would need to run to              reimbursed for expenses in collecting
                                                  expressed concern over this option. One                 report all registered AMCs that have                  and transmitting registry fees. Another
                                                  commenter stated that AMCs could                        completed appraisal reports during a                  commenter also stated that the 500
                                                  reduce their panel sizes, thereby                       specific year or timeframe. Another                   hours is underestimated stating the ASC
                                                  creating slower turnaround times and                    commenter stated AMCs may use fewer                   failed to consider administrative costs
                                                  utilizing fewer appraisers. Another                     appraisers for appraisal assignments to               and expenses for creating and
                                                  commenter stated the interpretation                     keep AMC registry fees down. The ASC                  maintaining a database, and for the staff
                                                  under the second option would not be                    anticipates there may well be such                    time to run the program. The ASC is
                                                  easier to implement and States would                    responses by AMCs to reduce their                     working to minimize such burden in
                                                  have to rely on AMCs self reporting this                registry fees, but under the statutory                simplifying the reporting requirements
                                                  information. Another commenter                          framework, it is seemingly unavoidable.               for AMCs. As stated in the proposal, the
                                                  expressed concern that the second                          The ASC requested comment on the                   ASC will issue a Bulletin to address
                                                  option could penalize AMCs if an order                  ASC’s interpretation of the phrase                    reporting requirements with the
                                                  is accepted and assigned but later                      ‘‘working for or contracting with.’’ (See             effective date for compliance.
                                                  cancelled and neither the AMC or the                    Question 2 in the proposal.) One                         Another commenter foresees several
                                                                                                          commenter expressed concern that for                  barriers to collecting reliable data on
                                                  appraiser receive any compensation,
                                                                                                          AMCs in business less than 12 months,                 how many appraisers are on an AMC
                                                  and could also be burdensome for States
                                                                                                          determining how many appraisals have                  panel and how many have done work
                                                  to enforce without having a status of
                                                                                                          been performed could be difficult.                    for the AMC in the previous 12 months,
                                                  assignments and their completion
                                                                                                          Another commenter suggested ‘‘working                 including the necessity to adopt new
                                                  during a given timeframe.
                                                     Under the third option, which is                     for’’ and ‘‘contracting with’’ should be              rules, create new forms and update
                                                  adopted in the final rule, the phrase                   properly defined with specifics and                   current IT systems to collect and
                                                  ‘‘working for or contracting with’’                     parameters. One commenter requested                   maintain this data, all of which will
                                                                                                          clarification of the term ‘‘working for,’’            result in increased labor costs for staff
                                                  includes those appraisers that
                                                                                                          and another commenter, while                          needed for implementation of the
                                                  performed an appraisal for the AMC on
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                                                                                                          supporting the third option, commented                proposed rule. As stated in the proposed
                                                  a covered transaction during the
                                                                                                          the term ‘‘performed’’ needs clarity,                 rule, the ASC anticipates further
                                                  reporting period in a particular State.
                                                                                                          suggesting appraisals could be                        development of its grants program,
                                                  This option excludes appraisers
                                                                                                          considered ‘‘performed’’ when delivered               particularly in support of the States as
                                                  accepted by the AMC for consideration
                                                                                                          by the AMC to the client. The ASC                     funds are available. The statutory
                                                  in existence for more than a year, the reporting
                                                                                                          recognizes that because the AMC is                    purpose of ASC grants to the States is
                                                  period would be since the AMC commenced doing           acting as an agent of the appraiser’s                 to provide funds to assist States in
                                                  business.                                               client, delivery of an appraisal to the               compliance with Title XI. Therefore, as


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                                                                   Federal Register / Vol. 82, No. 184 / Monday, September 25, 2017 / Rules and Regulations                                                44497

                                                  funds are available, the ASC could                      which would include appraisers who                    part, ‘‘any external third party
                                                  consider establishing a grant to assist                 performed only one appraisal                          authorized either by a creditor of a
                                                  States in registry reporting requirements               assignment, and perhaps up to three.                  consumer credit transaction secured by
                                                  and transmission of registry fees for                   The commenter suggests its proposal as                the consumer’s principal dwelling or by
                                                  both appraisers and AMCs. Another                       an alternative to potentially reduce                  an underwriter of or other principal in
                                                  commenter suggested the ASC should                      AMC registry fees. However, the ASC                   the secondary mortgage markets.’’ 16 It
                                                  provide a revenue projection as well as                 would not have authority under the                    was further stated in the AMC Rule
                                                  costs to develop the AMC Registry. The                  statute to provide such an exception,                 preamble that applying coverage of the
                                                  ASC has included those expenses in its                  particularly in the case of AMCs that                 AMC Rule beyond FRTs was consistent
                                                  budget process and will continue to do                  have been in existence for more than a                with the structure and text of other parts
                                                  so on an annual basis.                                  year. Furthermore, the ASC is                         of Title XI, section 1124, most of which
                                                     Another commenter opposed the                        concerned there would be undesirable                  address appraisals generally rather than
                                                  interpretation of ‘‘working for or                      consequences. For example, there could                appraisals only for FRTs, and in
                                                  contracting with,’’ stating it will create              be a reduction in appraiser fees in order             particular, the text of section 1124(a)(4)
                                                  an entirely new regulatory criterion for                to avoid the proposed threshold.                      of Title XI indicates that one of the chief
                                                  States to implement and validate,                       Additionally, AMCs might select                       purposes of the minimum requirements
                                                  thereby requiring audits. It should be                  appraisers in a manner to avoid the                   for AMCs is to ensure compliance with
                                                  noted that there is no federal                          threshold rather than basing a selection              the valuation independence standards
                                                  requirement for States to audit AMCs to                 on competency. The ASC will continue                  established pursuant to section 129E of
                                                  determine validity of information                       to work with States to address increased              the Truth and Lending Act (TILA) (15
                                                  submitted to the State. A State may                     burden and will continue to explore                   U.S.C. 1639e).17 The preamble of the
                                                  determine to periodically audit, or not                 means to provide additional grant                     AMC Rule concluded that those
                                                  to exercise such authority at all, or                   funding to the States to support State                standards apply to AMCs whenever they
                                                  alternatively, a State may rely on the                  programs as funds are available and                   engage in a consumer credit transaction
                                                  complaint/investigation process to                      additional grant policies and procedures              secured by the consumer’s principal
                                                  determine if and when an audit is                       are developed and approved.                           dwelling, regardless of whether the
                                                  warranted.                                                 A few commenters expressed                         transaction is a FRT.18
                                                     By far the majority of comments                      preference for a flat fee to avoid any                   Another commenter questioned the
                                                  received expressed concern over these                   need to verify that AMCs are sending in               benefit of the AMC Registry to the
                                                  additional fees and the impact on                       the correct amount, another commenter                 industry as a whole. The ASC notes the
                                                  appraisers if the fee is passed on to them              suggested a two-tiered system and                     requirement for the ASC to maintain the
                                                  by the AMCs. More specifically, these                   another commenter suggested a tiered                  AMC Registry is statutory. The benefit
                                                  commenters requested that the final rule                structure based on the size of the                    of the Registry initially will be to
                                                  prohibit AMCs from passing the fee on                   appraiser panel and/or the volume of                  promote information sharing between
                                                  to appraisers. While the ASC shares in                  appraisals brokered by an AMC. The                    States on AMCs. The Registry will also
                                                  the concern expressed over the fee being                ASC considered these various options to               allow lenders, AMCs and other
                                                  passed on to appraisers, such regulation                calculating the AMC registry fee, but                 stakeholders to identify AMCs that are
                                                  of AMCs is outside of the authority of                  concluded that such options were not                  located in participating States, and
                                                  the ASC. The ASC notes the fee                          supported by the statute. Also, the ASC               therefore subject to State registration
                                                  imposed by statute is not a fee assessed                notes, in response to several                         and supervision. In addition, the
                                                  on appraisers, but rather on AMCs.                      commenters expressing concern over                    Registry will identify AMCs that are
                                                  Some commenters identified certain                      the honor system versus auditing AMCs                 Federally regulated AMCs.
                                                  States are already attempting to regulate               on information provided to the State by
                                                  this at the State level. One commenter,                 AMCs, that it is up to the State to                   Collection and Transmission of Annual
                                                  however, stated the choice to pass the                  determine whatever process the State                  AMC Registry Fees
                                                  fee on to the appraiser should be left to               deems appropriate.                                       The ASC is adopting § 1102.403(a)
                                                  the AMC, and that appraisers have a                        Two commenters stated the AMC                      and (b) substantially as proposed
                                                  choice whether to participate on an                     registry fee should be calculated based               regarding collection and transmission of
                                                  AMC panel.                                              on FRTs, not covered transactions. The                annual AMC registry fees. On or before
                                                     Some commenters expressed concern                    ASC believes the proposal is consistent               the effective date of this rule, the ASC
                                                  that AMCs hide their appraisal                          with the AMC Rule and the statute. The                will issue an ASC Bulletin to States that
                                                  management fees from borrowers by                       AMC Rule defined a covered transaction                will address:
                                                  including them as part of the fee paid                  as any consumer credit transaction                       1. When the AMC Registry will be
                                                  to appraisers, and requested that the                   secured by the consumer’s principal                   open for States; and
                                                  final rule require fees be disclosed to the             dwelling.15 As stated in the AMC Rule                    2. Reporting requirements
                                                  borrower. This, however, is outside the                 preamble, the definition did not limit                (information required to be submitted
                                                  authority of the ASC. Comments were                     the definition of covered transaction to              by States in order to register AMCs on
                                                  also received expressing concern over                   FRTs, even though Title XI and its                    the AMC Registry) with the effective
                                                  AMCs not paying customary and                           implementing regulations have applied                 date for compliance.
                                                  reasonable fees to appraisers, or                       historically only to appraisals for FRTs.                Section 1102.403(a) and (b)
                                                  charging appraisers various fees to be on               The AMC Rule, through the interagency                 implement collection and transmission
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                                                  an AMC panel. This too is outside the                   process, determined that defining                     of annual AMC registry fees for States
                                                  authority of the ASC.                                   ‘‘covered transaction’’ as such reflected             that elect to register and supervise
                                                     One commenter suggested                              the statutory text of section 1121(11),               AMCs following the statutory scheme
                                                  consideration of a de minimis                           which defines the term ‘‘appraisal
                                                  exception, stating the ASC should allow                 management company,’’ as in pertinent                   16 See 80 FR 32658, 32664 (June 9, 2015).
                                                  AMCs to use the IRS 1099 threshold and                                                                          17 See Title XI sec. 1124(a)(4), 12 U.S.C.
                                                  thus exclude those appraisers to whom                     15 See 12 CFR 34.211(h); 12 CFR 225.191(h); 12      3353(a)(4).
                                                  it pays less than $600 during a tax year,               CFR 323.9(h); 12 CFR 1222.21(h) (2015).                 18 See 80 FR 32658, 32664 (June 9, 2015).




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                                                  44498            Federal Register / Vol. 82, No. 184 / Monday, September 25, 2017 / Rules and Regulations

                                                  set forth in sections 1109 and 1117 of                  States to collect and transmit                        barrier to collection of fees in those
                                                  Title XI as amended by the Dodd-Frank                   information and fees to the ASC and the               States. The ASC considered
                                                  Act. The final rule requires AMC                        need for additional funding and staff.                commenters’ concerns, but recognizes
                                                  registry fees to be collected and                       Another commenter stated the ASC                      the authority to impose requirements on
                                                  transmitted to the ASC on an annual                     should consider implementing a                        Federally regulated AMCs lies with the
                                                  basis by States that elect to register and              centralized computer system for                       Agencies.20 The ASC will work with the
                                                  supervise AMCs. Only those AMCs                         collecting AMC registry fees, and use                 Agencies to address these concerns.
                                                  whose registry fees have been                           some of the fees to provide grants to                    Some commenters expressed concern
                                                  transmitted to the ASC are eligible to be               States to set up and run their AMC                    that even though they elect to register
                                                  on the AMC Registry.                                    programs. The ASC will continue to                    and supervise AMCs, they would have
                                                     The ASC requested comment on all                     work with States to address increased                 no authority over Federally regulated
                                                  aspects of proposed collection and                      burden and will continue to explore                   AMCs, and therefore no ability to accept
                                                  transmission of annual AMC registry                     means to provide additional grant                     information or fees from those AMCs.
                                                  fees. (See Question 4 in the proposal.)                 funding to the States to support State                The ASC recognizes this may present a
                                                  One commenter stated that while it is                   programs as funds are available and                   challenge for some States. However, for
                                                  understandable that States should have                  additional grant policies and procedures              States that elect to register and
                                                  some flexibility in connection with the                 are developed and approved.                           supervise AMCs, the requirement to
                                                  collection of registry fees, some                          One commenter objected to States                   collect fees from Federally regulated
                                                  boundaries or guidelines should be                      levying additional fees on AMCs to                    AMCs is statutory. The Agencies 21
                                                  implemented within the final rule                       cover the costs of collecting and                     involved with issuing the AMC Rule
                                                  because varying State expiration dates                  transmitting fees to the ASC. This                    recognized that practical challenges may
                                                  could be financially and logistically                   commenter referenced the AMC Rule                     arise as the minimum requirements are
                                                  challenging for AMCs. One commenter                     stating in its preamble the option for                adopted in States and reporting
                                                  stated that the staggered renewal dates                 States to collect administrative fees from            requirements take effect and the
                                                  could complicate the reporting process                  Federally regulated AMCs to offset the                Agencies committed to monitor these
                                                  and may be a burden to AMCs and                         cost of collecting the AMC Registry fee               issues. The ASC will monitor these
                                                  States to maintain records. The                         and the information related to the fee.               issues as well and will continue to
                                                  commenter suggested the reporting                       The ASC understands the basis for the                 explore means to provide additional
                                                  period should be the same for every                     concern, but recognizes this is a matter              grant funding to the States to support
                                                  State. As proposed, the ASC recognizes                  left to the States.                                   State programs as funds are available
                                                  that States should have the flexibility to                 The ASC requested comment on                       and additional grant policies and
                                                  align a one-year period with any 12-                    Federally regulated AMCs operating in                 procedures are developed and
                                                  month period, which may or may not be                   a State that does not elect to register and           approved.
                                                  based on the calendar year. Based on                    supervise AMCs, and whether the ASC                      The ASC requested comment on what
                                                  annual fees paid by the States                          should collect information and fees                   barriers, if any, exist that would make
                                                  historically for appraiser registry fees,               directly from those Federally regulated               it difficult for a State to implement the
                                                  the ASC recognizes States require                       AMCs. (See Question 5 in the proposal.)               collection and transmission of AMC
                                                  flexibility to determine the period for                 The ASC received a number of                          registry fees (see Question 6 in the
                                                  reporting and collection of registry fees               comments in response to this question.                proposal) and what costs, both direct in
                                                  dependent on their budget cycles, rules                 One commenter expressed concerns                      terms of fees and indirect in terms of
                                                  and statutes. States vary greatly on the                about collecting fees from Federally                  administrative costs, would be
                                                  12-month cycle as well as renewal                       regulated AMCs which are exempt from                  associated with collection and
                                                  cycles, which in some States may be 2                   registration with the State. Another                  transmission of AMC registry fees (see
                                                  years or more. Just as many States do                   commenter stated that Federally                       Question 7 in the proposal). One
                                                  not use a calendar year for their existing              regulated AMCs operating in a State that              commenter estimated that the burden
                                                  appraiser credentialing process, the ASC                does not have an AMC program should                   for a State’s program would be 25 hours
                                                  believes that allowing States to set the                report and submit fees directly to the                per month of staff time to complete and
                                                  12-month period provides appropriate                    ASC. A few commenters stated that the                 would cost approximately $6000 to
                                                  flexibility and will help States comply                 State would not have authority to                     design a database and $700/month for
                                                  with the collection and transmission of                 collect fees from entities that are exempt            staff to maintain. Another commenter
                                                  AMC fees and reduce regulatory burden                   from State licensure and they do not                  stated the proposed rule could
                                                  for State governments. States may                       have authority to require that those                  negatively affect AMCs, consumers and
                                                  choose to do this in a similar manner as                entities submit data to the State Board               real estate appraisers, as well as create
                                                  they currently do for their appraisers,                 and requested that the ASC collect the                burden for States. This commenter also
                                                  meaning some States have a date certain                 fees from those entities directly. Several            stated AMCs will likely pass on fees to
                                                  every year, while other States use, for                 commenters stated the ASC should                      clients and therefore consumers.
                                                  example, the appraiser’s date of birth                  collect fees directly from Federally                  Another commenter stated costs may
                                                  (States could use AMC registration date                 regulated AMCs rather than the State                  negatively affect smaller AMCs causing
                                                  similarly). The registration cycle is left              acting as a pass-through. One                         consolidation of AMCs. Another
                                                  to the individual States to determine,                  commenter stated if the ASC sets up a                 concern was that AMCs may pare down
                                                  but the ASC notes that the statutory                    program to collect fees from Federally                appraiser panels. The ASC recognizes
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                                                  requirement in section 1109(a)(4)                       regulated AMCs in States that do not                  the collection and transmission to the
                                                  requires States to submit AMC registry                  register and supervise AMCs, the ASC                  ASC of AMC registry fees by the States
                                                  fees to the ASC annually.19                             should consider the same for States with              would create some recordkeeping,
                                                     Several other commenters expressed                   an AMC program. Another commenter                     reporting and compliance requirements.
                                                  concern over the additional burden on                   stated that States could choose to opt
                                                                                                          out due to the reported low percentage                  20 OCC, Board, FDIC, NCUA, Bureau, and FHFA
                                                    19 SeeTitle XI sec. 1109(a)(4)(B), 12 U.S.C.          of FRTs compared to overall                           (see footnote 8).
                                                  3338(a)(4)(B).                                          transactions, which would result in a                   21 Id.




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                                                                   Federal Register / Vol. 82, No. 184 / Monday, September 25, 2017 / Rules and Regulations                                        44499

                                                  However, these collection and                            the ASC Bulletin concerning reporting                 implement section 1473 of the Dodd-
                                                  transmission requirements are imposed                    requirements which will be issued after               Frank Act.
                                                  by the statute. The ASC will continue to                 this final rule. This commenter also                    Title of Information Collection:
                                                  work with States to address increased                    wanted to know what timeline the ASC                  Collection and Transmission of Annual
                                                  burden and will continue to explore                      is considering between verification and               AMC Registry Fees.
                                                  means to provide additional grant                        remittance, similar to another                          OMB Control Nos.: The ASC will be
                                                  funding to the States to support State                   commenter who stated there should be                  seeking new control numbers for these
                                                  programs as funds are available and                      flexibility with the timing of payment of             collections.
                                                  additional grant policies and procedures                 fees and the actual transmission of the                 Frequency of Response: Event
                                                  are developed and approved.                              fees, and that the final rule should add              generated.
                                                     Several commenters requested that                                                                             Affected Public: States; businesses or
                                                                                                           additional language that clearly
                                                  States should be allowed to send in                                                                            other for-profit and not-for-profit
                                                                                                           addresses these potential gaps in order
                                                  multi-year registry fees rather than                                                                           organizations.
                                                                                                           to avoid any unintended consequences.
                                                  annually. Another commenter expressed                    This is a matter that will be left to the             Abstract
                                                  concern that States could incur                          States to administer within the
                                                  significant administrative costs to                                                                            State Recordkeeping Requirements
                                                                                                           following parameters: (1) AMC registry
                                                  implement programming changes to                         fees must be collected and transmitted                   States that elect to register and
                                                  their computer systems if they have to                   to the ASC on an annual basis by States               supervise AMCs are required to collect
                                                  collect fees annually rather than multi-                 that elect to register and supervise                  and transmit annual AMC registry fees
                                                  year fees as they do now for appraisers.                 AMCs; and (2) only those AMCs whose                   to the ASC. Section 1102.402 establishes
                                                  If a State can assess on a multi-year                                                                          the annual AMC registry fee for States
                                                                                                           registry fees have been transmitted to
                                                  basis, the ASC would not object.                                                                               that elect to register and supervise
                                                                                                           the ASC are eligible to be on the AMC
                                                  However, the ASC notes that the                                                                                AMCs as follows: (1) In the case of an
                                                                                                           Registry.
                                                  statutory requirement in section                                                                               AMC that has been in existence for more
                                                  1109(a)(4) requires States that elect to                 IV. Regulatory Analysis                               than a year, $25 multiplied by the
                                                  register and supervise AMCs to submit                                                                          number of appraisers who have
                                                  AMC registry fees to the ASC                             Paperwork Reduction Act                               performed an appraisal for the AMC on
                                                  annually.22 For clarification purposes,                    Certain provisions of the final rule                a covered transaction in such State
                                                  language that was included at the end                                                                          during the previous year; and (2) in the
                                                                                                           contain ‘‘information collection’’
                                                  of proposed section 1102.403(b)                                                                                case of an AMC that has not been in
                                                                                                           requirements within the meaning of the
                                                  referencing the ‘‘12-month period                                                                              existence for more than a year, $25
                                                                                                           Paperwork Reduction Act (PRA) of 1995
                                                  subsequent to payment of the fee’’ has                                                                         multiplied by the number of appraisers
                                                                                                           (44 U.S.C. 3501 et seq.). Under the PRA,
                                                  been removed to avoid conflict should                                                                          who have performed an appraisal for the
                                                                                                           the ASC may not conduct or sponsor,
                                                  a State assess the fee on a multi-year                                                                         AMC on a covered transaction in such
                                                                                                           and, notwithstanding any other
                                                  basis.                                                                                                         State since the AMC commenced doing
                                                     Another commenter expressed the                       provision of law, a person is not
                                                                                                                                                                 business.
                                                  desire for the ASC to continue to accept                 required to respond to, an information                   Section 1102.403 requires AMC
                                                  data files for AMCs. Historically, the                   collection unless the information                     registry fees to be collected and
                                                  ASC accepted data files, and continues                   collection displays a valid Office of                 transmitted to the ASC on an annual
                                                  to do so on a limited basis for the                      Management and Budget (OMB) control                   basis by States that elect to register and
                                                  Appraiser Registry. However, this                        number. The information collection                    supervise AMCs. Only those AMCs
                                                  method of transmitting rosters is                        requirements contained in this final rule             whose registry fees have been
                                                  obsolete and time consuming. The ASC                     were submitted to OMB for review and                  transmitted to the ASC will be eligible
                                                  has continued to improve the Appraiser                   approval at the proposed rule stage by                to be on the AMC Registry. Section
                                                  Registry using more up-to-date                           the ASC pursuant to section 3506 of the               1102.403 clarifies that States may align
                                                  transmission methods such as the                         PRA and section 1320.11 of the OMB’s                  a one-year period with any 12-month
                                                  extranet application and Simple Object                   implementing regulations (5 CFR part                  period, which may, or may not, be based
                                                  Access Protocol (SOAP) in order to                       1320). OMB instructed the ASC to                      on the calendar year. The registration
                                                  provide more real-time information on                    examine public comment in response to                 cycle is left to the individual States to
                                                  the National Registries. While the ASC                   the proposed rule and describe in the                 determine.
                                                  recognizes this may impose additional                    supporting statement of their next
                                                                                                           collections any public comments                       State Reporting Burden
                                                  burden on States, the ASC will continue
                                                  to explore means to provide grant                        received regarding the collection as well                Section 1103 of Title XI, Functions of
                                                  funding to the States to support State                   as why (or why it did not) incorporate                Appraisal Subcommittee, was amended
                                                  programs as funds are available and                      the commenter’s recommendation. The                   by the Dodd-Frank Act to require the
                                                  additional grant policies and procedures                 ASC received 12 public comments                       ASC to maintain a registry of AMCs that
                                                  are developed and approved.                              regarding the collection and concern of               are either: (1) Registered with and
                                                     Another commenter was concerned                       burden on States, and two comments                    subject to supervision by a State; or (2)
                                                  with specific collection and                             voiced concern that the ASC did not                   Federally regulated AMCs. On or before
                                                  transmission scenarios and how various                   perform a cost benefit analysis. The ASC              the effective date of this rule, the ASC
                                                  scenarios would impact determination                     described the comments in the                         will issue an ASC Bulletin to States that
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                                                  of fees, calculation of panel size,                      supporting statement above and the                    will address:
                                                  transmission of fees, verification of fee                discussion below on the Regulatory                       1. When the AMC Registry will be
                                                  calculation and audit requirements.                      Flexibility Act, and addressed why the                open for States; and
                                                  Several of this commenter’s concerns                     ASC did not incorporate commenters’                      2. Reporting requirements
                                                  deal with logistics and will be part of                  recommendations. The collection of                    (information required to be submitted
                                                                                                           information requirements in the final                 by States in order to register AMCs on
                                                    22 See Title XI sec. 1109(a)(4)(B), 12 U.S.C.          rule are found in §§ 1102.400–1102.403.               the AMC Registry) with the effective
                                                  3338(a)(4)(B).                                           This information is required to                       date for compliance.


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                                                  44500             Federal Register / Vol. 82, No. 184 / Monday, September 25, 2017 / Rules and Regulations

                                                   Burden Estimates:                                        transaction since the AMC commenced                   should do extensive analysis on how the
                                                   Total Number of Respondents: 500                         doing business.                                       proposed rule will affect residential
                                                  AMCs, 55 States.                                             Regarding the fee for AMCs that have               appraisers. The ASC shares in the
                                                                                                            been in existence for more than a year,               concern but has no authority to regulate
                                                   Burden Total: 500 hours.                                 the ASC believes the rule imposes the                 that issue. A few commenters indicated
                                                  Regulatory Flexibility Act                                minimum fee allowed under the                         that some States are looking at
                                                                                                            statutory provisions of section 1109.                 regulating this issue at the State level.
                                                     The Regulatory Flexibility Act (RFA),                  The ASC did not exercise statutory                    In support of those States, the ASC
                                                  5 U.S.C. 601 et seq., generally requires                  discretion granted to the ASC to                      notes the fee imposed by statute is not
                                                  that, in connection with a rulemaking,                    increase the fee above $25. Further, the              a fee assessed on appraisers, but rather
                                                  an agency prepare and make available                      ASC interprets ‘‘working for or                       on AMCs. This commenter, similar to
                                                  for public comment a regulatory                           contracting with’’ to mean only those                 the previous commenter, also did not
                                                  flexibility analysis that describes the                   appraisers who actually performed an                  believe the requirements of section
                                                  impact of the proposed rule on small                      appraisal for the AMC, as opposed to all              609(a) of the RFA have been met and
                                                  entities. However, the regulatory                         appraisers on the AMC’s panel or all                  that the fee may force small AMCs out
                                                  flexibility analysis otherwise required                   appraisers engaged, regardless of                     of business, as well as impact sole
                                                  under the RFA is not required if an                       whether the assignment was completed.                 proprietorships that accept assignments
                                                  agency certifies that the proposed rule                   The ASC believes this formula results in              from AMCs. This commenter went on to
                                                  will not have a significant economic                      the lowest fee allowed by the statute                 state that while the ASC is not required
                                                  impact on a substantial number of small                   and the ASC chose not to exercise its                 to adhere to Executive Order 12866 or
                                                  entities and publishes its certification                  authority to increase this minimum fee.               issue cost benefit analysis, this
                                                  and a brief explanatory statement in the                  Therefore, any burden produced is the                 commenter believes it is sound best
                                                  Federal Register together with the rule.                  result of statutory and not regulatory                practice.
                                                  Based on its analysis, and for the                        requirements.                                            The ASC carefully considered these
                                                  reasons stated below, the ASC believes                       The ASC has also decided to adopt                  matters and concluded requirements
                                                  that the rule will not have a significant                 the statutory minimum fee of $25 for                  under the rule are imposed by the
                                                  economic impact on a substantial                          AMCs that have not existed for more                   statute, not the rule, and further, the
                                                  number of small entities.                                 than a year. As required by statute, the              requirements apply to those States that
                                                                                                            ASC adopted an appropriate number                     elect to register and supervise AMCs
                                                     Section 1109 of Title XI provides that
                                                                                                            against which to multiply the $25 fee.                following the statutory scheme set forth
                                                  State appraiser certifying and licensing
                                                                                                            The ASC adopted the same multiple as                  in section 1473 of the Dodd-Frank Act.
                                                  agencies that elect to register and
                                                                                                            used for AMCs that have existed for                   In addition, the RFA does not require an
                                                  supervise AMCs shall collect (1) from                     more than a year (i.e., the number of                 agency to conduct a small-entity impact
                                                  AMCs that have been in existence for                      appraisers that have performed                        analysis when the agency does not
                                                  more than a year, annual AMC registry                     appraisal assignments for the AMC). It                regulate the affected entities (AMCs,
                                                  fees in the amount of $25 (up to a                        is possible that the ASC may have been                lenders, appraisers). The ASC’s
                                                  maximum of $50) multiplied by the                         able to adopt a multiple that would have              statutory oversight extends to State
                                                  number of appraisers ‘‘working for or                     resulted in a lower fee and would still               certifying and licensing agencies.
                                                  contracting with’’ an AMC in a State                      be deemed appropriate. In this regard,                Section 1109 of Title XI provides the
                                                  during the previous year; and (2) from                    the rule may have created a burden for                framework and minimum fee to collect
                                                  AMCs that have not been in existence                      AMCs that have not existed for more                   from AMCs for States that elect to
                                                  for more than a year, annual AMC                          than a year, beyond the burden created                register and supervise AMCs. The ASC
                                                  registry fees in the amount of $25 (up to                 by the statutory requirements alone.                  believes the rule as proposed imposes
                                                  a maximum of $50) multiplied by an                        However, using the actual period of                   the minimum fee of $25 allowed under
                                                  appropriate number to be determined by                    time since the AMC commenced doing                    the statutory provisions of section 1109.
                                                  the ASC.23 The purpose of the statutory                   business will maintain some                           The statute did provide latitude for the
                                                  fee is to support the ASC’s functions                     consistency in the calculation of AMC                 ASC to establish an appropriate number
                                                  under Title XI. Because the ASC                           registry fees to reduce administrative                to multiply by $25 for AMCs that have
                                                  believes the minimum fee required by                      burden for the States.                                not been in existence for a year. Using
                                                  the statute would be adequate to                             One commenter stated the proposed                  the actual period of time since the AMC
                                                  support its functions, the rule adopts                    rule would have a large financial impact              commenced doing business will
                                                  the minimum fee of $25 as set by                          on smaller AMCs and community banks                   maintain some consistency in the
                                                  statute. The rule also interprets the                     and credit unions, as well as appraisers,             calculation of AMC registry fees to
                                                  phrase ‘‘working for or contracting                       and asserted that the RFA requires                    reduce administrative burden for the
                                                  with’’ to mean those appraisers that                      analysis when the rule directly regulates             States. The ASC did not exercise
                                                  performed an appraisal for the AMC on                     small entities. This commenter stated                 statutory discretion granted to the ASC
                                                  a covered transaction during the                          that as an owner of a small AMC,                      to increase the fee above $25. Therefore,
                                                  reporting period. For AMCs that have                      regulatory fees proposed are                          any burden produced is the result of
                                                  existed for more than a year, the formula                 burdensome, and as a national AMC, is                 statutory and not regulatory
                                                  is $25 multiplied by the number of                        opposed to paying for the same                        requirements.
                                                  appraisers who have performed an                          appraiser in different States, especially                While some burden beyond the
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                                                  appraisal for the AMC on a covered                        given that the AMC registry fee is on top             statutory requirements may have
                                                  transaction during the previous year.                     of other State fees required by the                   resulted from the rule for AMCs that
                                                  For AMCs that have not existed for more                   States, and regulatory oversight seems                have not existed for more than a year,
                                                  than a year, the $25 fee is multiplied by                 ‘‘duplicitous.’’ Another commenter                    the ASC does not believe the rule will
                                                  the number of appraisers that performed                   stated the proposed rule would affect                 have a significant economic impact on
                                                  an appraisal for the AMC on a covered                     thousands of small appraisal businesses               a substantial number of small entities.
                                                                                                            as a result of AMCs passing the registry              There are only approximately 500 AMCs
                                                    23 See   12 U.S.C. 3338(a)(4)(B).                       fee on to appraisers, and that the ASC                operating in the United States. The


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                                                                   Federal Register / Vol. 82, No. 184 / Monday, September 25, 2017 / Rules and Regulations                                        44501

                                                  annual regulatory burden will only                         UMRA. Given that the final rule reflects            supervise appraisal management
                                                  apply to new AMCs that have not                            requirements that arise from section                companies pursuant to 12 U.S.C. 3346
                                                  existed for more than a year. Given the                    1473 of the Dodd-Frank Act, the UMRA                and 3353, and the regulations
                                                  small number of AMCs currently in                          cost estimate for the proposed rule is              promulgated thereunder.
                                                  operation, it is unlikely that there will                  zero. For this reason, and for the other
                                                  be a substantial number of AMCs that                       reasons cited above, the ASC has                    § 1102.401   Definitions.
                                                  commence doing business in any given                       determined that this final rule will not               For purposes of this subpart:
                                                  year. Further, the ASC adopted the                         result in expenditures by State, local,                (a) AMC Registry means the national
                                                  lowest possible fee of $25. Therefore,                     and tribal governments, or the private              registry maintained by the ASC of those
                                                  the ASC does not believe that the                          sector, of $100 million or more in any              AMCs that meet the Federal definition
                                                  exercise of its discretion in setting the                  one year. Accordingly, this proposed                of AMC, as defined in 12 U.S.C.
                                                  fee formula for such AMCs will have a                      rule is not subject to section 202 of the           3350(11), are registered by a State or are
                                                  significant economic impact on a                           UMRA.                                               Federally regulated, and have paid the
                                                  substantial number of small entities.
                                                                                                             List of Subjects in 12 CFR Part 1102                annual AMC registry fee.
                                                     The collection and transmission to the
                                                  ASC of AMC registry fees by the States                       Administrative practice and                          (b) AMC Rule means the interagency
                                                  would create some recordkeeping,                           procedure, Appraisers, Banks, Banking,              final rule on minimum requirements for
                                                  reporting and compliance requirements.                     Freedom of information, Mortgages,                  AMCs. (12 CFR 34.210–34.216; 12 CFR
                                                  However, these collection and                              Reporting and recordkeeping                         225.190–225.196; 12 CFR 323.8–323.14;
                                                  transmission requirements are imposed                      requirements.                                       12 CFR 1222.20–1222.26).
                                                  by the statute, not the rule. Further, the                                                                        (c) ASC means the Appraisal
                                                  RFA requires an agency to perform a                        Authority and Issuance
                                                                                                                                                                 Subcommittee of the Federal Financial
                                                  regulatory flexibility analysis of small                     For the reasons set forth in the                  Institutions Examination Council
                                                  entity impacts when the agency’s rule                      preamble, the ASC amends 12 CFR part                established under section 1102 (12
                                                  directly regulates the small entities.24                   1102 as follows:                                    U.S.C. 3310) as it amended the Federal
                                                     Based on its analysis, and for the                                                                          Financial Institutions Examination
                                                  reasons stated above, the ASC believes                     PART 1102—APPRAISER                                 Council Act of 1978 (12 U.S.C. 3301 et
                                                  that the rule will not have a significant                  REGULATION                                          seq.) by adding section 1011.
                                                  economic impact on a substantial
                                                  number of small entities. Therefore, the                   ■  1. The authority citation for part 1102             (d) Performed an appraisal means the
                                                  ASC certifies that the final rule will not                 is revised to read as follows:                      appraisal service requested of an
                                                  have a significant economic impact on                                                                          appraiser by the AMC was provided to
                                                                                                               Authority: 12 U.S.C. 3348(a), 3332, 3335,
                                                  a substantial number of small entities.                                                                        the AMC.
                                                                                                             3338 (a)(4)(B), 3348(c), 5 U.S.C. 552a, 553(e);
                                                                                                             Executive Order 12600, 52 FR 23781 (3 CFR,             (e) State means any State, the District
                                                  Unfunded Mandates Reform Act of 1995                       1987 Comp., p. 235).                                of Columbia, the Commonwealth of
                                                  Determination                                                                                                  Puerto Rico, the Commonwealth of the
                                                                                                             ■ 2. Subpart E to part 1102 is added to
                                                    The ASC has analyzed the final rule                                                                          Northern Mariana Islands, Guam, the
                                                                                                             read as follows:
                                                  under the factors in the Unfunded                                                                              United States Virgin Islands, and
                                                  Mandates Reform Act of 1995 (UMRA)                         Subpart E—Collection and Transmission of            American Samoa.
                                                  (2 U.S.C. 1532). Under this analysis, the                  Appraisal Management Company (AMC)
                                                                                                             Registry Fees                                          (f) Other terms. Definitions of:
                                                  ASC considered whether the final rule                                                                          Appraisal management company
                                                  includes a Federal mandate that may                        Sec.
                                                                                                             1102.400 Authority, purpose, and scope.
                                                                                                                                                                 (AMC); appraisal management services;
                                                  result in the expenditure by State, local,                                                                     appraisal panel; consumer credit;
                                                  and tribal governments, in the aggregate,                  1102.401 Definitions.
                                                                                                             1102.402 Establishing the annual AMC                covered transaction; dwelling; Federally
                                                  or by the private sector, of $100 million                                                                      regulated AMC are incorporated from
                                                                                                                  registry fee.
                                                  or more in any one year (adjusted                                                                              the AMC Rule by reference.
                                                                                                             1102.403 Collection and transmission of
                                                  annually for inflation). For the following                      annual AMC registry fees.
                                                  reasons, the ASC finds that the final rule                                                                     § 1102.402 Establishing the annual AMC
                                                  does not trigger the $100 million UMRA                     Subpart E—Collection and                            registry fee.
                                                  threshold. The costs specifically related                  Transmission of Appraisal                             The annual AMC registry fee to be
                                                  to requirements set forth in statute are                   Management Company (AMC) Registry                   applied by States that elect to register
                                                  excluded from expenditures under the                       Fees                                                and supervise AMCs is established as
                                                     24 For purposes of assessing the impacts of the         § 1102.400   Authority, purpose, and scope.         follows:
                                                  proposed rule on small entities, ‘‘small entities’’ is       (a) Authority. This subpart is issued               (a) In the case of an AMC that has
                                                  defined in the RFA to include small businesses,                                                                been in existence for more than a year,
                                                  small not-for-profit organizations, and small              by the Appraisal Subcommittee (ASC)
                                                  government jurisdictions. See 5 U.S.C. 601(6). A           under sections 1106 and 1109 (a)(4)(B)              $25 multiplied by the number of
                                                  ‘‘small business’’ is determined by application of         of Title XI of the Financial Institutions           appraisers who have performed an
                                                  SBA regulations and reference to the North                 Reform, Recovery, and Enforcement Act               appraisal for the AMC in connection
                                                  American Industry Classification System (NAICS)                                                                with a covered transaction in such State
                                                  classifications and size standards. See 5 U.S.C.           of 1989 (Title XI), as amended by the
                                                  601(3). A ‘‘small organization’’ is any ‘‘not-for-profit   Dodd-Frank Wall Street Reform and                   during the previous year; and
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                                                  enterprise which is independently owned and                Consumer Protection Act (Dodd-Frank                   (b) In the case of an AMC that has not
                                                  operated and is not dominant in its field.’’ 5 U.S.C.
                                                  601(4). A ‘‘small governmental jurisdiction’’ is the
                                                                                                             Act) (Pub. L. 111–203, 124 Stat. 1376               been in existence for more than a year,
                                                  government of a city, county, town, township,              (2010)), 12 U.S.C. 3335, 3338 (a)(4)(B)).           $25 multiplied by the number of
                                                  village, school district, or special district with a         (b) Purpose. The purpose of this                  appraisers who have performed an
                                                  population of less than 50,000. See 5 U.S.C. 601(5).       subpart is to implement section 1109                appraisal for the AMC in connection
                                                  Given these definitions, States that elect to establish
                                                  licensing and certification authorities are not small
                                                                                                             (a)(4)(B) of Title XI, 12 U.S.C. 3338.              with a covered transaction in such State
                                                  entities and the burden on them is not relevant to            (c) Scope. This subpart applies to               since the AMC commenced doing
                                                  this analysis.                                             States that elect to register and                   business.


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                                                  44502            Federal Register / Vol. 82, No. 184 / Monday, September 25, 2017 / Rules and Regulations

                                                  § 1102.403 Collection and transmission of               DATES:  This AD is effective October 30,              Jetstream Model 3201 airplanes and
                                                  annual AMC registry fees.                               2017.                                                 supersede AD 2014–07–09.
                                                     (a) Collection of annual AMC registry                   The Director of the Federal Register                  The European Aviation Safety Agency
                                                  fees. States that elect to register and                 approved the incorporation by reference               (EASA), which is the Technical Agent
                                                  supervise AMCs pursuant to the AMC                      of certain publications listed in the AD              for the Member States of the European
                                                  Rule shall collect an annual registry fee               as of October 30, 2017.                               Community, has issued EASA AD No.:
                                                  as established in § 1102.402 from AMCs                                                                        2017–0073, dated April 27, 2017
                                                                                                          ADDRESSES: You may examine the AD
                                                  eligible to be on the AMC Registry.                                                                           (referred to after this as ‘‘the MCAI’’), to
                                                                                                          docket on the Internet at http://
                                                     (b) Transmission of annual AMC                                                                             correct an unsafe condition for the
                                                                                                          www.regulations.gov by searching for
                                                  registry fee. States that elect to register                                                                   specified products. The MCAI states:
                                                                                                          and locating Docket No. FAA–2017–
                                                  and supervise AMCs pursuant to the                                                                               Maintenance instructions for BAE
                                                                                                          0395; or in person at Document
                                                  AMC Rule shall transmit AMC registry                                                                          Jetstream 3100 and 3200 aeroplanes, which
                                                                                                          Management Facility, U.S. Department
                                                  fees as established in § 1102.402 to the                                                                      are approved by EASA, are currently defined
                                                                                                          of Transportation, Docket Operations,
                                                  ASC on an annual basis. States may                                                                            and published in the BAE Systems
                                                                                                          M–30, West Building Ground Floor,                     (Operations) Ltd Jetstream Series 3100 &
                                                  align a one-year period with any 12-
                                                                                                          Room W12–140, 1200 New Jersey                         3200 Corrosion Prevention and Control
                                                  month period, which may, or may not,
                                                                                                          Avenue SE., Washington, DC 20590.                     Programme (CPCP) document, JS/CPCP/01.
                                                  be based on the calendar year. Only
                                                                                                             For service information identified in              These instructions have been identified as
                                                  those AMCs whose registry fees have                                                                           mandatory for continued airworthiness.
                                                  been transmitted to the ASC will be                     this AD, contact BAE Systems
                                                                                                          (Operations) Limited, Customer                           Failure to accomplish these instructions
                                                  eligible to be on the AMC Registry.                                                                           could result in an unsafe condition.
                                                                                                          Information Department, Prestwick                        EASA issued AD 2012–0036 to require
                                                    By the Appraisal Subcommittee.                        International Airport, Ayrshire, KA9                  operators to comply with the inspection
                                                    Dated: September 13, 2017.                            2RW, Scotland, United Kingdom;                        instructions as contained in the CPCP at
                                                  Arthur Lindo,                                           telephone: +44 1292 675207; fax: +44                  Revision 6.
                                                  Chairman.                                               1292 675704; email: RApublications@                      Since that AD was issued, reports have
                                                  [FR Doc. 2017–20400 Filed 9–22–17; 8:45 am]             baesystems.com; Internet: http://                     been received of finding extensive corrosion.
                                                                                                          www.baesystems.com/Businesses/                        While affected areas are covered by an
                                                  BILLING CODE 6700–01–P
                                                                                                                                                                existing zonal inspection, it has been
                                                                                                          RegionalAircraft/. You may view this
                                                                                                                                                                determined that this inspection is inadequate
                                                                                                          referenced service information at the                 to identify the corrosion in those areas.
                                                  DEPARTMENT OF TRANSPORTATION                            FAA, Policy and Innovation Division,                  Consequently, new inspection items 52–11–
                                                                                                          901 Locust, Kansas City, Missouri                     002 C1, 200/EX/01 C2, 500/IN/02 C1, 600/IN/
                                                  Federal Aviation Administration                         64106. For information on the                         04 C1 and 700/IN/04 C1 have been added to
                                                                                                          availability of this material at the FAA,             the CPCP at Revision 8.
                                                  14 CFR Part 39                                          call (816) 329–4148. It is also available                For the reason described above, this
                                                                                                          on the Internet at http://                            [EASA] AD retains the requirements of EASA
                                                  [Docket No. FAA–2017–0639; Product                                                                            AD 2012–0036, which is superseded, and
                                                  Identifier 2017–CE–016–AD; Amendment                    www.regulations.gov by searching for                  requires accomplishment of the actions
                                                  39–19052; AD 2017–19–22]                                Docket No. FAA–2017–0639.                             specified in BAE Systems (Operations) Ltd
                                                                                                          FOR FURTHER INFORMATION CONTACT:                      Jetstream Series 3100 & 3200 CPCP, JS/CPCP/
                                                  RIN 2120–AA64                                                                                                 01, Revision 8 (hereafter referred to as ‘the
                                                                                                          Doug Rudolph, Aerospace Engineer,
                                                                                                          FAA, Small Airplane Standards Branch,                 CPCP’ in this AD).
                                                  Airworthiness Directives; British
                                                  Aerospace Regional Aircraft Airplanes                   901 Locust, Room 301, Kansas City,                    The MCAI can be found in the AD
                                                                                                          Missouri 64106; telephone: (816) 329–                 docket on the Internet at: https://
                                                  AGENCY:  Federal Aviation                               4059; fax: (816) 329–4090; email:                     www.regulations.gov/
                                                  Administration (FAA), Department of                     doug.rudolph@faa.gov.                                 document?D=FAA-2017-0639-0002.
                                                  Transportation (DOT).
                                                                                                          SUPPLEMENTARY INFORMATION:                            Comments
                                                  ACTION: Final rule.
                                                                                                          Discussion                                              We gave the public the opportunity to
                                                  SUMMARY:   We are superseding                                                                                 participate in developing this AD. The
                                                  Airworthiness Directive (AD) 2014–07–                      We issued AD 2014–07–09,                           following presents the comment
                                                  09 for British Aerospace Regional                       Amendment 39–17823 (79 FR 22367;                      received on the NPRM and the FAA’s
                                                  Aircraft Jetstream Series 3101 and                      April 22, 2014) (‘‘AD 2014–07–09’’).                  response to the comment.
                                                  Jetstream Model 3201 airplanes. This                    That AD required actions intended to
                                                  AD results from mandatory continuing                    address an unsafe condition on British                Summary Clarification
                                                  airworthiness information (MCAI)                        Aerospace Regional Aircraft Model                        Kenneth MacKinnon of BAE Systems
                                                  originated by an aviation authority of                  Jetstream Series 3101 and Jetstream                   Regional Aircraft stated that the
                                                  another country to identify and correct                 Model 3201 airplanes and was based on                 Summary and Reason, paragraph (e) of
                                                  an unsafe condition on an aviation                      mandatory continuing airworthiness                    this AD, both list corrosion issues that
                                                  product. The MCAI describes the unsafe                  information (MCAI) originated by an                   were introduced at Revision 6, which he
                                                  condition as both the need for newly                    aviation authority of another country.                assumes was mandated by AD 2014–07–
                                                  added inspections for corrosion, which                     Since we issued AD 2014–07–09,                     09. He assumes this is an error and that
                                                  includes the door hinges/supporting                     more extensive reports of corrosion have              both sections should summarize the
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                                                  structure and attachment bolts for the                  been received, resulting in the need to               changes introduced at Revisions 7 and
                                                  main spar joint and engine support, and                 inspect additional areas.                             8, as detailed in the BAE SYSTEMS
                                                  inadequate existing instructions for                       We issued a notice of proposed                     Certification Plans AWR/768/J3I and
                                                  inspection for corrosion for several areas              rulemaking (NPRM) (82 FR 28592; June                  AWR/815/J31 respectively. BAE wants
                                                  including the rudder hinge location on                  23, 2017) to amend 14 CFR part 39 by                  the summary to better reflect the
                                                  the vertical stabilizer. We are issuing                 adding an AD that would apply to                      changes since FAA AD 2014–07–09.
                                                  this AD to require actions to address the               British Aerospace Regional Aircraft                      We partially agree with this comment.
                                                  unsafe condition on these products.                     Model Jetstream Series 3101 and                       The Summary and Reason, paragraph (e)


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Document Created: 2018-10-24 14:43:47
Document Modified: 2018-10-24 14:43:47
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionRules and Regulations
ActionFinal rule.
DatesEffective date. This final rule will become effective on November 24, 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 44493 
CFR AssociatedAdministrative Practice and Procedure; Appraisers; Banks; Banking; Freedom of Information; Mortgages and Reporting and Recordkeeping Requirements

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