[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