On May 20, 2016, the Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC) issued a notice of proposed rulemaking to implement 12 CFR Part 1102 Subpart E—Collection and Transmission of Annual AMC Registry Fees. The proposed rule, among other things, sets forth the annual registry fee that states would collect from AMCs and transmit to the ASC if they elect to register and supervise AMCs. The proposed regulations also clarify the ASC’s interpretation of the phrase “working for or contracting with” as used in the calculation of annual AMC registry fees in accordance with Section 1109 of Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act, as amended by the Dodd-Frank Act. The propose regulations further establish that States may choose any 12-month period, rather than a calendar year, with which to base their annual AMC registry fee.
In relevant part, Section 1109 was amended by the Dodd-Frank Act to require States 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 the 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. 12 U.S.C. 3338(a)(4)(B). This leaves ambiguous the number of appraisers who qualify in the calculation of registry fees for both sections (1) and (2).
To clarify the ambiguity, proposed 12 CFR § 1102.402 would implement Section 1109 and establish the annual AMC registry fee for States that elect to register and supervise AMCs as follows:
- 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
- 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 States since the AMC commenced doing business. Performance of an appraisal means the appraisal service requested of an appraiser by the AMC was provided to the AMC.
For section (1), the proposed regulations interpret the phrase “working for or contracting with” contained in Section 1109 of Title XI 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. For section (2), the ASC proposes 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. This interpretation excludes appraisers who have been 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 ASC believes this interpretation imposes the minimum fee allowed under Section 1109 and therefore imposes the least burden on AMCs.
Proposed 12 CFR § 1102.403 would give States the flexibility to align a one-year period with any 12-month period, which may or may not be based on the calendar year. Since many States do not use a calendar year for their existing appraiser credentialing process, the ASC believes this will help States comply with the collection and transmission of AMC fees and reduce regulatory burden for State governments.
Comments on the proposed regulations must be received on or before July 19, 2016.