Federal Agencies Issue Final Rule on AMC Requirements

Six federal agencies have adopted a final rule to implement minimum requirements for state registration and supervision of appraisal management companies (AMCs), which provide services to lenders, underwriters or other principals in the secondary mortgage markets. 

The Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Consumer Financial Protection Bureau (CFPB) and the Federal Housing Finance Agency (FHFA) are among the financial regulatory agencies that issued the rule. 

The final rule, issued on April 30, implements amendments to Title XI of the Financial Institution Reform, Recovery and Enforcement Act of 1989 made by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. 

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Under the rule, states may elect to register and supervise AMCs. These participating states must apply certain minimum requirements in the registration and supervision of the companies.  

An AMC that is a subsidiary of an insured depository institution and is a federally regulated AMC must meet the same minimum requirements as state-regulated AMCs except for the requirement to register with a state.

The rule does not require a state to establish an AMC registration and supervision program, and no penalty is imposed on a state that does not establish a regulatory structure for these companies.

In states that have not established such a structure after 36 months from the effective date of the final rule, any non-federally regulated AMC will be barred from providing appraisal management services for federally related transactions. A state may adopt a regulatory structure for AMCs after this 36-month period, which would lift this restriction.

View a draft of the Federal Register notice here

Written by Emily Study

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