Time is running out for the few remaining state legislatures which have yet to enact regulations regarding the registration of appraisal management companies (AMCs). Five states - consisting of Alaska, Massachusetts, New York, Ohio and Wisconsin - have yet to enact regulations regarding the registration and supervision of AMCs. The District of Columbia City Council decided last year to opt out of adopting a regulation. The states that presently have not enacted regulations have until June 10, 2018 before they need to have registration requirements in place.
A couple of states are further along than others in the process to pass AMC registration legislation, but momentum has been stalled. In Massachusetts, the Joint Committee on Financial Services held a hearing last summer on HB 577 by Representative Scibak, but there has been no further consideration on the bill since then. In Ohio, Representative Dever introduced HB 213 to regulate appraisal management companies which the Ohio House passed on June 21, 2017 by a vote of 87 to 8, but the Ohio Senate has yet to act on it.
In Alaska, members of the legislature recently introduced legislation on AMC registration. On February 5, Representative Andrew Josephson introduced HB 329 and on February 9, Senator Kevin Meyer introduced SB 155. HB 329 and SB 155 are very similar, and provide broad authority to the Alaska Department of Commerce, Community, and Economic Development in setting fees and developing standards. In New York, a draft bill is just now being circulated in the New York legislature and should be introduced shortly. Finally, at a meeting on February 13, the Wisconsin Real Estate Appraisers Board considered draft legislation for introduction in the Wisconsin legislature.
Section 1473 of the Dodd-Frank Wall Street Reform and Consumer Protection Act directed federal financial institution regulatory agencies and the new Consumer Financial Protection Bureau to issue a joint rule establishing minimum requirements to be implemented by states regarding the registration and supervision of appraisal management companies. The requirements of AMCs include that 1) only qualified appraisers are used for federally related transactions, 2) appraisals comply with the Uniform Standards of Professional Appraisal Practice and 3) appraisals are conducted independently from influence. The law also allowed states to impose fees on AMCs applying and renewing their registration.
In early April 2014, the Office of the Comptroller of the Currency (OCC), along with five other federal financial regulators, formally issued the long-awaited joint proposed rule on minimum standards for state registration and regulation of AMCs. On June 9, 2015, the agencies issued a final rule within the Federal Register. The publication of the rule was primarily a formality, as the requirements were already outlined within section 1473 of the Dodd-Frank Act, which allowed a majority of states to enact regulations before the final rule was issued.
If a state does not adopt AMC registration regulations by June 10, 2018, then AMCs with operations in that state cannot perform appraisal services linked to a federally related transaction. A 12-month extension can be granted, however, if it is determined that a state has made substantial progress toward establishing regulations. It is up to the Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council to determine whether a state has comparable regulations, or has made significant progress toward establishing registration requirements. RMCs should consult counsel as to whether a state regulation applies to RMCs, and whether their company would be required to register in a particular state.
How this will impact mobility: The AMC regulations directly impact appraisal management companies, and regulators in certain states have determined the laws apply to relocation management companies. This creates additional regulatory requirements for companies, as well as increased costs associated with the application and renewal fees for registering. The laws, therefore, have an impact on the sale or purchase of homes involving transferees.