The federal financial agencies should establish a registration system for appraisal management companies in states that do not set up their own systems, ABA said in a comment letter.
The agencies in March proposed minimum requirements for state supervision of appraisal management companies under the Dodd-Frank Act. They would not require states to regulate AMCs, but if states do, AMCs must register in the state, use only state-certified or licensed appraisers for federally related transactions and ensure appraisals are independent.
ABA explained that banks depend on appraisal management services to comply with mortgage rules. “[T]he proposed rule creates a dangerous legal void that can cause harmful lending disruptions for banks in affected jurisdictions,” the association said. Moreover, ABA added, Dodd-Frank’s language requires AMCs to be subject to state supervision and authorizes the agencies to become a default supervisor of AMCs in states that do not meet the act’s minimum standards.
Read the letter.