[Federal Register Volume 83, Number 95 (Wednesday, May 16, 2018)]
[Notices]
[Pages 22681-22684]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10430]
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FEDERAL HOUSING FINANCE AGENCY
[No. 2018-N-05]
Proposed Collection; Comment Request
AGENCY: Federal Housing Finance Agency.
ACTION: 60-Day notice of submission of information collection for
approval from Office of Management and Budget.
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SUMMARY: In accordance with the requirements of the Paperwork Reduction
Act of 1995 (PRA), the Federal Housing Finance Agency (FHFA or the
Agency) is seeking public comments concerning an information collection
known as ``Minimum Requirements for Appraisal Management Companies,''
which has been assigned control number 2590-0013 by the Office of
Management and Budget (OMB). FHFA intends to submit the information
collection to OMB for review and approval of a three-year extension of
the control number, which is due to expire on July 31, 2018.
[[Page 22682]]
DATES: Interested persons may submit comments on or before July 16,
2018.
ADDRESSES: Submit comments to FHFA, identified by ``Proposed
Collection; Comment Request: `Minimum Requirements for Appraisal
Management Companies, (No. 2018-N-05)' '' by any of the following
methods:
Agency Website: www.fhfa.gov/open-for-comment-or-input.
Federal eRulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments. If you submit your
comment to the Federal eRulemaking Portal, please also send it by email
to FHFA at [email protected] to ensure timely receipt by the agency.
Mail/Hand Delivery: Federal Housing Finance Agency, Eighth
Floor, 400 Seventh Street SW, Washington, DC 20219, ATTENTION: Proposed
Collection; Comment Request: ``Minimum Requirements for Appraisal
Management Companies, (No. 2018-N-05)''.
We will post all public comments we receive without change,
including any personal information you provide, such as your name and
address, email address, and telephone number, on the FHFA website at
http://www.fhfa.gov. In addition, copies of all comments received will
be available for examination by the public on business days between the
hours of 10 a.m. and 3 p.m., at the Federal Housing Finance Agency,
Eighth Floor, 400 Seventh Street SW, Washington, DC 20219. To make an
appointment to inspect comments, please call the Office of General
Counsel at (202) 649-3804.
FOR FURTHER INFORMATION CONTACT: Robert Witt, Senior Policy Analyst,
Office of Housing and Regulatory Policy, by email at
[email protected] or by telephone at (202) 649-3128; or Eric
Raudenbush, Associate General Counsel, [email protected], (202)
649-3084 (these are not toll-free numbers); Federal Housing Finance
Agency, 400 Seventh Street SW, Washington, DC 20219. The
Telecommunications Device for the Hearing Impaired is (800) 877-8339.
SUPPLEMENTARY INFORMATION: FHFA is seeking comments on its upcoming
request to OMB to renew the PRA clearance for the following collection
of information:
Title: Minimum requirements for appraisal management companies.
OMB Number: 2590-0013.
Affected Public: Participating States and State-registered
Appraisal Management Companies.
A. Need for and Use of the Information Collection
In 2015, FHFA, the Federal Deposit Insurance Corporation (FDIC),
the Office of the Comptroller of the Currency (OCC), and the Board of
Governors of the Federal Reserve System (Board) (collectively, the
Agencies) jointly issued regulations \1\ to implement minimum statutory
requirements to be applied by States in the registration and
supervision of appraisal management companies (AMCs).\2\ These minimum
requirements apply to States that have elected to establish an
appraiser certifying and licensing agency with authority to register
and supervise AMCs (participating States).\3\
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\1\ The National Credit Union Administration and the Bureau of
Consumer Financial Protection also participated in the joint
rulemaking but, by agreement, the responsibility for clearance under
the PRA of information collections contained in the joint
regulations is shared only by the FDIC, OCC, Board, and FHFA.
\2\ See 12 U.S.C. 3353(a). An AMC is an entity that serves as an
intermediary for, and provides certain services to, appraisers and
lenders.
\3\ 12 U.S.C. 3346.
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The regulations also implement the statutory requirement that
States report to the Appraisal Subcommittee (ASC) of the Federal
Financial Institutions Examination Council (FFIEC) the information
required by the ASC to administer the national registry of AMCs (AMC
National Registry or Registry).\4\ When fully established, the AMC
National Registry will include AMCs that are either: (1) Subsidiaries
owned and controlled by an insured depository institution (as defined
in 12 U.S.C. 1813) and regulated by either the FDIC, OCC, or Board
(federally regulated AMCs); \5\ or (2) registered with, and subject to
supervision of, a State appraiser certifying and licensing agency.
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\4\ See 12 U.S.C. 3353(e).
\5\ See 12 CFR 1222.21(k) (defining ``Federally regulated
AMC'').
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FHFA's AMC regulation, located at Subpart B of 12 CFR part 1222, is
substantively identical to the AMC regulations of the FDIC, OCC, and
Board and contains the recordkeeping and reporting requirements
described below.
1. State Reporting Requirements (IC #1)
The regulation requires that each State electing to register AMCs
for purposes of permitting AMCs to provide appraisal management
services relating to covered transactions in the State submit to the
ASC the information regarding such AMCs required to be submitted by ASC
regulations or guidance concerning AMCs that operate in the State.\6\
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\6\ See 12 CFR 1222.26.
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2. State Recordkeeping Requirements (IC #2)
States seeking to register AMCs must have an AMC registration and
supervision program. The regulation requires each participating State
to establish and maintain within its appraiser certifying and licensing
agency a registration and supervision program with the legal authority
and mechanisms to: (i) Review and approve or deny an application for
initial registration; (ii) periodically review and renew, or deny
renewal of, an AMC's registration; (iii) examine an AMC's books and
records and require the submission of reports, information, and
documents; (iv) verify an AMC's panel members' certifications or
licenses; (v) investigate and assess potential violations of laws,
regulations, or orders; (vi) discipline, suspend, terminate, or deny
registration renewals of, AMCs that violate laws, regulations, or
orders; and (vii) report violations of appraisal-related laws,
regulations, or orders, and disciplinary and enforcement actions to the
ASC.\7\
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\7\ See 12 CFR 1222.23(a).
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The regulation requires each participating state to impose
requirements on AMCs that are not federally regulated (non-federally
regulated AMCs) to: (i) Register with and be subject to supervision by
a state appraiser certifying and licensing agency in each state in
which the AMC operates; (ii) use only state-certified or state-licensed
appraisers for federally regulated transactions in conformity with any
federally regulated transaction regulations; (iii) establish and comply
with processes and controls reasonably designed to ensure that the AMC,
in engaging an appraiser, selects an appraiser who is independent of
the transaction and who has the requisite education, expertise, and
experience necessary to competently complete the appraisal assignment
for the particular market and property type; (iv) direct the appraiser
to perform the assignment in accordance with the Uniform Standards of
Professional Appraisal Practice; and (v) establish and comply with
processes and controls reasonably designed to ensure that the AMC
conducts its appraisal management services in accordance with sections
129E(a) through (i) of the Truth-in-Lending Act.\8\
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\8\ See 12 CFR 1222.23(b). Sections 129E(a) through (i) of the
Truth-in-Lending Act are located at 15 U.S.C. 1639e(a)-(i).
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3. AMC Reporting Requirements (IC #3)
The regulation provides that an AMC may not be registered by a
state or included on the AMC National Registry
[[Page 22683]]
if the company is owned, directly or indirectly, by any person who has
had an appraiser license or certificate refused, denied, cancelled,
surrendered in lieu of revocation, or revoked in any state for a
substantive cause.\9\ The regulation also provides that an AMC may not
be registered by a state if any person that owns 10 percent or more of
the AMC fails to submit to a background investigation carried out by
the state appraiser certifying and licensing agency.\10\ Thus, each AMC
registering with a state must provide information to the state on
compliance with those ownership restrictions. Further, the regulation
requires that a federally regulated AMC report to the state or states
in which it operates the information required to be submitted by the
state pursuant to the ASC's policies, including policies regarding the
determination of the AMC National Registry fee, and information
regarding compliance with the ownership restrictions described
above.\11\
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\9\ See 12 CFR 1222.24(a), .25(b).
\10\ See 12 CFR 1222.24(b).
\11\ See 12 CFR 1222.25(c).
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4. AMC Recordkeeping Requirements (IC #4)
An entity meets the definition of an AMC that is subject to the
requirements of the AMC regulation if, among other things, it oversees
an appraiser panel of more than 15 state-certified or state-licensed
appraisers in a state, or 25 or more state-certified or state-licensed
appraisers in two or more states, within a given 12-month period.\12\
For purposes of determining whether a company qualifies as an AMC under
that definition, the regulation provides that an appraiser in an AMC's
network or panel is deemed to remain on the network or panel until: (i)
The AMC sends a written notice to the appraiser removing the appraiser
with an explanation; or (ii) receives a written notice from the
appraiser asking to be removed or a notice of the death or incapacity
of the appraiser.\13\ The AMC would retain these notices in its files.
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\12\ See 12 CFR 1222.21(c)(iii).
\13\ See 12 CFR 1222.22(b).
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B. Burden Estimate
There is no change in the methodology or substance of this
information collection. For the information collections described
above, the general methodology is to compute the industry wide burden
hours for participating states and AMCs and then assign a share of the
burden hours to each of the Agencies for each information collection.
As noted above, each of the Agencies' AMC regulations contains
reporting and recordkeeping requirements applying to participating
states and to both federally regulated and non-federally regulated
AMCs. The Agencies have estimated that approximately 200 entities meet
the regulatory definition of an ``appraisal management company'' \14\
and that, of those 200 AMCs, approximately 120 are federally regulated
and approximately 80 non-federally regulated.\15\ Unlike the insured
depository institutions regulated by the OCC, FDIC, and Board, none of
FHFA's regulated entities owns or controls an AMC or, by law, could
ever own or control an AMC. Accordingly, the Agencies have agreed that
responsibility for the burdens arising from reporting and recordkeeping
requirements imposed upon federally regulated AMCs are to be split
evenly among the OCC, FDIC, and Board (i.e., the equivalent of 40
federally regulated AMCs for each agency) and that FHFA will not
include those burdens in its totals. The four Agencies have agreed to
split the total burdens imposed upon participating states and upon non-
federally regulated AMCs evenly between them (i.e., by taking
responsibility for 25 percent of the burden per agency or, in the case
of non-federally regulated AMCs, the equivalent of 20 such AMCs for
each agency).
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\14\ In FHFA's regulations, this definition is set forth at 12
CFR 1222.21(c).
\15\ FHFA anticipates that more definitive information on the
total number of AMCs and on the relative number of federally
regulated and non-federally regulated AMCs will become available
after the joint regulations' AMC registration requirements become
effective on August 10, 2018.
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Thus, for ICs #1 and #2, which relate to reporting and
recordkeeping requirements imposed upon participating states, each
agency is responsible for 25 percent of the total estimated burden. For
ICs #3 and #4, which relate to reporting and recordkeeping requirements
imposed upon both federally regulated AMCs and non-federally regulated
AMCs, the OCC, FDIC, and Board are each responsible for the burden
imposed upon a total of 60 AMCs (40 federally regulated plus 20 non-
federally regulated), or 30 percent of the total burden, while FHFA is
responsible only for the burden imposed upon 20 non-federally regulated
AMCs, or 10 percent of the total burden.
The Agencies estimate the total annualized hour burden placed on
respondents by the information collection in the joint AMC regulations
to be 1,445 hours. FHFA estimates its share of the hour burden to be
183 hours. The calculations on which those estimated are based are
described below.
1. State Reporting Requirements (IC #1)
The total estimated burden hours for state reporting to the ASC are
calculated by multiplying the number of states by the hour burden per
state. The burden hours are then divided equally among the FDIC, OCC,
Board, and FHFA, with each agency responsible for 25 percent of the
total. For purposes of this calculation, the number of states is set at
55 which, in conformity with the regulatory definition of ``state,''
includes all 50 U.S. states as well as the Commonwealth of the Northern
Mariana Islands, the District of Columbia, Guam, Puerto Rico, and the
U.S. Virgin Islands.\16\ The burden estimate of 1 hour per report is
unchanged from the estimate provided for the currently-approved ICR.
Therefore, the estimated total state reporting burden attributable to
all of the Agencies is: 55 states x 1 hour/state = 55 hours. The
estimated burden hours attributable to FHFA are 55 hours x 25 percent =
14 hours (rounded to the nearest whole number).
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\16\ See 12 CFR 1222.21(o).
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2. State Recordkeeping Requirements (IC #2)
The estimated burden hours on participating states for developing
and maintaining an AMC licensing program is calculated by multiplying
the number of states without a registration and licensing program by
the hour burden to develop the system. The total burden hours are then
equally divided among the FDIC, OCC, Board, and FHFA. According to the
Appraisal Institute, as of July 26, 2017, there were 5 states that had
not developed a system to register and oversee AMCs.\17\ The burden
estimate of 40 hours per state without a registration system is
unchanged from the estimate provided for the currently-approved ICR.
Therefore, the total estimated burden attributable to all of the
Agencies is: 5 States x 40 hours/state = 200 hours. The estimated
burden hours attributable to FHFA are 200 hours x 25 percent = 50
hours.
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\17\ Appraisal Institute ``Enacted State AMC Laws''. https://www.appraisalinstitute.org/advocacy/enacted-state-amc-laws1/.
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3. AMC Reporting Requirements (IC #3)
The burden for AMC reporting requirements for information needed to
determine the AMC National Registry fee and information regarding
compliance with the AMC ownership restrictions is calculated by
multiplying the number of AMCs by the frequency of response and then by
the burden per
[[Page 22684]]
response. As described above, 30 percent of the burden hours are then
assigned to each of the FDIC, OCC, and Board, while 10 percent are
assigned to FHFA.
The frequency of response is estimated as the number of states that
do not have an AMC registration program in which the average AMC
operates.\18\ As discussed above, 5 states do not have AMC registration
or oversight programs. According to the Consumer Financial Protection
Bureau (CFPB), the average AMC operates in 19.56 states.\19\ Therefore,
the average AMC operates in approximately 2 states that do not have AMC
registration systems: (5 States/55 states) x 19.56 states = 1.778
states, rounded to 2 states. The burden estimate of one hour per
response is unchanged from the estimate provided for the currently-
approved ICR. Therefore, the total estimated hour burden is: 200 AMCs x
2 states x 1 hour = 400 hours. The estimated burden hours attributable
to FHFA are 400 hours x 10 percent = 40 hours.
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\18\ The number of states includes all U.S. states, territories,
and districts to include: The Commonwealth of the Northern Mariana
Islands; the District of Columbia; Guam; Puerto Rico; and the U.S.
Virgin Islands.
\19\ The CFPB conducted a survey of 9 AMCs in 2013 regarding the
provisions in the regulation and the related PRA burden.
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4. AMC Recordkeeping Requirements (IC #4)
The burden for recordkeeping by AMCs of written notices of
appraiser removal from a network or panel is estimated to be equal to
the number of appraisers who leave the profession per year multiplied
by the estimated percentage of appraisers who work for AMCs, then
multiplied by burden hours per notice. As described above, 30 percent
of the burden hours are then assigned to each of the FDIC, OCC, and
Board, while 10 percent are assigned to FHFA.
The number of appraisers who leave an AMC annually, either by
resigning, being laid off, or having their licenses revoked or
surrendered, is estimated to be 9,881. The burden estimate of 0.08
hours per notice is unchanged from the estimate provided for the
currently-approved ICR. Therefore, the estimated total hour burden is:
9,881 notices x 0.08 hours = 790 hours (rounded to the nearest whole
number). The estimated burden hours attributable to FHFA are 790 hours
x 10 percent = 79 hours.
C. Comments Request
FHFA requests written comments on the following: (1) Whether the
collection of information is necessary for the proper performance of
FHFA functions, including whether the information has practical
utility; (2) the accuracy of FHFA's estimates of the burdens of the
collection of information; (3) ways to enhance the quality, utility,
and clarity of the information collected; and (4) ways to minimize the
burden of the collection of information on respondents, including
through the use of automated collection techniques or other forms of
information technology.
Dated: May 10, 2018.
Kevin Winkler,
Chief Information Officer, Federal Housing Finance Agency.
[FR Doc. 2018-10430 Filed 5-15-18; 8:45 am]
BILLING CODE 8070-01-P