[Federal Register Volume 85, Number 75 (Friday, April 17, 2020)]
[Rules and Regulations]
[Pages 21312-21318]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08216]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 34

[Docket No. OCC-2020-0014]
RIN 1557-AE86

FEDERAL RESERVE SYSTEM

12 CFR Part 225

[Docket No. R-1713]
RIN 7100-AF87

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 323

RIN 3064-AF48


Real Estate Appraisals

AGENCY: Office of the Comptroller of the Currency, Treasury (OCC); 
Board of Governors of the Federal Reserve System (Board); and the 
Federal Deposit Insurance Corporation (FDIC).

ACTION: Interim final rule with request for comments.

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SUMMARY: The OCC, Board, and FDIC (collectively, the agencies) are 
adopting an interim final rule to amend the agencies' regulations 
requiring appraisals of real estate for certain transactions. The 
interim final rule defers the requirement to obtain an appraisal or 
evaluation for up to 120 days following the closing of a transaction 
for certain residential and commercial real estate transactions, 
excluding transactions for acquisition, development, and construction 
of real estate. Regulated institutions should make best efforts to 
obtain a credible valuation of real property collateral before the loan 
closing, and otherwise underwrite loans consistent with the principles 
in the agencies' Standards for Safety and Soundness and Real Estate 
Lending Standards. The agencies are providing this relief to allow 
regulated institutions to expeditiously extend liquidity to 
creditworthy households and businesses in light of recent strains on 
the U.S. economy as a result of the National Emergency declared in 
connection with coronavirus disease 2019 (COVID-19).

DATES: The interim final rule is effective April 17, 2020 through 
December 31, 2020. Comments on the interim final rule must be received 
no later than June 1, 2020.

ADDRESSES: Interested parties are encouraged to submit written comments

[[Page 21313]]

jointly to all of the agencies. Commenters are encouraged to use the 
title ``Real Estate Appraisals'' to facilitate the organization and 
distribution of comments among the agencies. Comments should be 
directed to:
    OCC: Commenters are encouraged to submit comments through the 
Federal eRulemaking Portal or email, if possible. Please use the title 
``Real Estate Appraisals'' to facilitate the organization and 
distribution of the comments. You may submit comments by any of the 
following methods:
     Federal eRulemaking Portal--Regulations.gov Classic or 
Regulations.gov Beta:
    Regulations.gov Classic: Go to https://www.regulations.gov/. Enter 
``Docket ID OCC-2020-0014'' in the Search Box and click ``Search.'' 
Click on ``Comment Now'' to submit public comments. For help with 
submitting effective comments please click on ``View Commenter's 
Checklist.'' Click on the ``Help'' tab on the Regulations.gov home page 
to get information on using Regulations.gov, including instructions for 
submitting public comments.
    Regulations.gov Beta: Go to https://beta.regulations.gov/ or click 
``Visit New Regulations.gov Site'' from the Regulations.gov Classic 
homepage. Enter ``Docket ID OCC-2020-0014'' in the Search Box and click 
``Search.'' Public comments can be submitted via the ``Comment'' box 
below the displayed document information or by clicking on the document 
title and then clicking the ``Comment'' box on the top-left side of the 
screen. For help with submitting effective comments please click on 
``Commenter's Checklist.'' For assistance with the Regulations.gov Beta 
site, please call (877) 378-5457 (toll free) or (703) 454-9859 Monday-
Friday, 9 a.m.-5 p.m. ET or email [email protected].
     Email: [email protected].
     Mail: Chief Counsel's Office, Attention: Comment 
Processing, Office of the Comptroller of the Currency, 400 7th Street 
SW, Suite 3E-218, Washington, DC 20219.
     Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218, 
Washington, DC 20219.
     Fax: (571) 465-4326.
    Instructions: You must include ``OCC'' as the agency name and 
``Docket ID OCC-2020-0014'' in your comment. In general, the OCC will 
enter all comments received into the docket and publish the comments on 
the Regulations.gov website without change, including any business or 
personal information provided such as name and address information, 
email addresses, or phone numbers. Comments received, including 
attachments and other supporting materials, are part of the public 
record and subject to public disclosure. Do not include any information 
in your comment or supporting materials that you consider confidential 
or inappropriate for public disclosure.
    You may review comments and other related materials that pertain to 
this rulemaking action by any of the following methods:
     Viewing Comments Electronically--Regulations.gov Classic 
or Regulations.gov Beta:
    Regulations.gov Classic: Go to https://www.regulations.gov/. Enter 
``Docket ID OCC-2020-0014'' in the Search box and click ``Search.'' 
Click on ``Open Docket Folder'' on the right side of the screen. 
Comments and supporting materials can be viewed and filtered by 
clicking on ``View all documents and comments in this docket'' and then 
using the filtering tools on the left side of the screen. Click on the 
``Help'' tab on the Regulations.gov home page to get information on 
using Regulations.gov. The docket may be viewed after the close of the 
comment period in the same manner as during the comment period.
    Regulations.gov Beta: Go to https://beta.regulations.gov/ or click 
``Visit New Regulations.gov Site'' from the Regulations.gov Classic 
homepage. Enter ``Docket ID OCC-2020-0014'' in the Search Box and click 
``Search.'' Click on the ``Comments'' tab. Comments can be viewed and 
filtered by clicking on the ``Sort By'' drop-down on the right side of 
the screen or the ``Refine Results'' options on the left side of the 
screen. Supporting materials can be viewed by clicking on the 
``Documents'' tab and filtered by clicking on the ``Sort By'' drop-down 
on the right side of the screen or the ``Refine Results'' options on 
the left side of the screen.'' For assistance with the Regulations.gov 
Beta site, please call (877) 378-5457 (toll free) or (703) 454-9859 
Monday-Friday, 9 a.m.-5 p.m. ET or email 
[email protected].
    The docket may be viewed after the close of the comment period in 
the same manner as during the comment period.
    Board: You may submit comments, identified by Docket No. R-1713; 
RIN 7100-AF87, by any of the following methods:
     Agency website: http://www.federalreserve.gov. Follow the 
instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
     Email: [email protected]. Include docket 
and RIN numbers in the subject line of the message.
     FAX: (202) 452-3819 or (202) 452-3102.
     Mail: Ann E. Misback, Secretary, Board of Governors of the 
Federal Reserve System, 20th Street and Constitution Avenue NW, 
Washington, DC 20551.
    All public comments will be made available on the Board's website 
at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as 
submitted, unless modified for technical reasons or to remove 
personally identifiable information at the commenter's request. 
Accordingly, comments will not be edited to remove any identifying or 
contact information. For security reasons, the Board requires that 
visitors make an appointment to inspect comments. You may do so by 
calling (202) 452-3684.
    FDIC: You may submit comments, identified by RIN 3064-AF48, by any 
of the following methods:
     Agency Website: https://www.fdic.gov/regulations/laws/federal/. Follow the instructions for submitting comments on the Agency 
website.
     Email: [email protected]. Include the RIN 3064-AF48 in the 
subject line of the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th 
Street NW, Washington, DC 20429.
    Instructions: Comments submitted must include ``FDIC'' and ``RIN 
3064-AF48.'' Comments received will be posted without change to https://www.fdic.gov/regulations/laws/federal/, including any personal 
information provided.

FOR FURTHER INFORMATION CONTACT: 
    OCC: G. Kevin Lawton, Appraiser (Real Estate Specialist), (202) 
649-6670; Mitchell Plave, Special Counsel, (202) 649-5490; or Joanne 
Phillips, Counsel, Chief Counsel's Office (202) 649-5500; Office of the 
Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. 
For persons who are deaf or hearing impaired, TTY users may contact 
(202) 649-5597.
    Board: Anna Lee Hewko, Associate Director, (202) 530-6260; Teresa 
A. Scott, Manager, Policy Development Section, (202) 973-6114; Carmen 
Holly, Lead Financial Institution Policy Analyst, (202) 973-6122, 
Division of Supervision and Regulation; Laurie Schaffer, Deputy General 
Counsel, (202) 452-2272; Derald Seid, Senior Counsel, (202) 452-2246; 
Trevor Feigleson,

[[Page 21314]]

Senior Attorney, (202) 452-3274; David Imhoff Legal Assistant/Attorney, 
(202) 452-2249, Legal Division, Board of Governors of the Federal 
Reserve System, 20th and C Streets NW, Washington, DC 20551. For the 
hearing impaired only, Telecommunications Device for the Deaf (TDD) 
users may contact (202) 263-4869.
    FDIC: Beverlea S. Gardner, Senior Examination Specialist, Division 
of Risk Management and Supervision, (202) 898-3640, [email protected]; 
Benjamin K. Gibbs, Counsel, Legal Division, (202) 898-6726; Mark 
Mellon, Counsel, Legal Division, (202) 898-3884; or, Lauren Whitaker, 
Senior Attorney, Legal Division, (202) 898-3872, Federal Deposit 
Insurance Corporation, 550 17th Street NW, Washington, DC 20429. For 
the hearing impaired only, TDD users may contact (202) 925-4618.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Introduction
    A. Background
    B. Summary of the Interim Final Rule
II. The Interim Final Rule
III. Effective Date
IV. Administrative Law Matters
    A. Administrative Procedure Act
    B. Congressional Review Act
    C. Paperwork Reduction Act
    D. Regulatory Flexibility Act Analysis
    E. Riegle Community Development and Regulatory Improvement Act 
of 1994
    F. Solicitation of Comments on Use of Plain Language
    G. OCC Unfunded Mandates Reform Act of 1995 Determination

I. Introduction

A. Background

    Impact of COVID-19 on appraisals and evaluations. Due to the impact 
of COVID-19, businesses and individuals have a heightened need for 
additional liquidity. Being able to quickly access equity in real 
estate could help address this need. However, government restrictions 
on non-essential movement and health and safety advisories in response 
to the National Emergency declared in connection with COVID-19,\1\ 
including those relating to social distancing, have led to 
complications with respect to performing and completing real property 
appraisals and evaluations needed to comply with federal appraisal 
regulations. As a result, some borrowers may experience delays in 
obtaining funds needed to meet immediate and near-term financial needs.
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    \1\ Proclamation 9994, 85 FR 15337 (March 18, 2020).
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    Title XI and the appraisal regulations. Title XI directs each 
Federal financial institutions regulatory agency to publish appraisal 
regulations for federally related transactions within its 
jurisdiction.\2\ The purpose of Title XI is to protect federal 
financial and public policy interests \3\ in real estate-related 
transactions by requiring that real estate appraisals used in 
connection with federally related transactions (Title XI appraisals) 
are performed in writing, in accordance with uniform standards, by 
individuals whose competency has been demonstrated and whose 
professional conduct will be subject to effective supervision.\4\
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    \2\ The term ``Federal financial institutions regulatory 
agencies'' means the Board, the FDIC, the OCC, the National Credit 
Union Administration, and, formerly, the Office of Thrift 
Supervision. 12 U.S.C. 3350(6).
    \3\ These interests include those stemming from the federal 
government's roles as regulator and deposit insurer of financial 
institutions that engage in real estate lending and investment, 
guarantor or lender on mortgage loans, and as a direct party in real 
estate-related financial transactions. These federal financial and 
public policy interests have been described in predecessor 
legislation and accompanying Congressional reports. See Real Estate 
Appraisal Reform Act of 1988, H.R. Rep. No. 100-1001, pt. 1, at 19 
(1988); 133 Cong. Rec. 33047-33048 (1987).
    \4\ 12 U.S.C. 3331.
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    Title XI directs the agencies to prescribe appropriate standards 
for Title XI appraisals under the agencies' respective 
jurisdictions.\5\ At a minimum, the statute provides that a Title XI 
appraisal must be: (1) Performed in accordance with the Uniform 
Standards of Professional Appraisal Practice (USPAP); (2) a written 
appraisal, as defined by the statute; and (3) subject to appropriate 
review for compliance with USPAP.\6\ While appraisals are ordinarily 
completed before a lender and borrower close a real estate transaction, 
there is no specific requirement in USPAP that appraisals be completed 
at a specific time relative to the closing of a transaction.
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    \5\ 12 U.S.C. 3339.
    \6\ Id.
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    All federally related transactions must have Title XI appraisals. 
Title XI defines a federally related transaction as a real estate-
related financial transaction \7\ that the agencies or a financial 
institution regulated by the agencies engages in or contracts for, that 
requires the services of an appraiser.\8\ The agencies have authority 
to determine those real estate-related financial transactions that do 
not require the services of an appraiser and thus are not required to 
have Title XI appraisals.\9\ The agencies have exercised this authority 
by exempting certain categories of real estate-related financial 
transactions from the agencies' appraisal requirements.\10\
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    \7\ 12 U.S.C. 3350(5). A real estate-related financial 
transaction is defined as any transaction that involves: (i) The 
sale, lease, purchase, investment in or exchange of real property, 
including interests in property, or financing thereof; (ii) the 
refinancing of real property or interests in real property; and 
(iii) the use of real property or interests in property as security 
for a loan or investment, including mortgage-backed securities.
    \8\ 12 U.S.C. 3350(4).
    \9\ Real estate-related financial transactions that the agencies 
have exempted from the appraisal requirement are not federally 
related transactions under the agencies' appraisal regulations.
    \10\ See OCC: 12 CFR 34.43(a); Board: 12 CFR 225.63(a); FDIC: 12 
CFR 323.3(a). The agencies have determined that these categories of 
transactions do not require appraisals by state certified or state 
licensed appraisers in order to protect federal financial and public 
policy interests or to satisfy principles of safe and sound banking.
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    The agencies have used their safety and soundness authority to 
require evaluations for a subset of transactions for which an appraisal 
is not required.\11\ Under the appraisal regulations, for these 
transactions, financial institutions that are subject to the agencies' 
appraisal regulations (regulated institutions) must obtain an 
appropriate evaluation of real property collateral that is consistent 
with safe and sound banking practices.\12\
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    \11\ See OCC: 12 CFR 34.43(b); Board: 12 CFR 225.63(b); and 
FDIC: 12 CFR 323.3(b). Evaluations are required for exempt 
residential and commercial loans below the thresholds; exempt 
business loans; exempt subsequent transactions; and transactions 
subject to the rural residential exemption.
    \12\ The agencies have provided guidance on appraisals and 
evaluations through the Interagency Guidelines on Appraisals and 
Evaluations. See 75 FR 77450 (December 10, 2010), available at 
https://occ.gov/news-issuances/federal-register/2010/75fr77450.pdf.
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    Authority to defer appraisals and evaluations. In general, the 
agencies require that Title XI appraisals for federally related 
transactions occur prior to closing of a federally related 
transaction.\13\ The Interagency Guidelines on Appraisals and 
Evaluations provide similar information about evaluations.\14\ Under 
the interim final rule, deferrals of appraisals and evaluations will 
allow for expeditious access to credit. The deferrals, which will be 
temporary, are offered in response to a National Emergency. Regulated 
institutions that defer receipt of an appraisal or evaluation are still 
expected to conduct their lending

[[Page 21315]]

activity consistent with the underwriting principles in the agencies' 
Standards for Safety and Soundness \15\ and Real Estate Lending 
Standards \16\ that focus on the ability of a borrower to repay a loan 
and other relevant laws and regulations. These deferrals are not an 
exercise of the agencies' waiver authority, because appraisals and 
evaluations are being deferred, not waived. The deferrals are also not 
a waiver of USPAP requirements, given that (1) USPAP does not address 
the completion of an appraisal assignment with the timing of a lending 
decision; and (2) the deferred appraisal must be conducted in 
compliance with USPAP.
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    \13\ See OCC: 12 CFR 34.43(a), 34.44(b)&(e); Board: 12 CFR 
225.63(a), 225.64(b)&(e); FDIC: 12 CFR 323.3(a), 323.4(b)&(e) 
(requiring an appraisal to (1) contain sufficient information and 
analysis to support the institution's decision to engage in the 
transaction, and (2) be based on the definition of market value in 
the regulation, which takes into account a specified closing date 
for the transaction).
    \14\ See 75 FR 77450 (December 10, 2010), available at https://occ.gov/news-issuances/federal-register/2010/75fr77450.pdf.
    \15\ OCC: 12 CFR part 30, Appendix A; Board: 12 CFR 208, 
Appendix D-1; and FDIC: 12 CFR part 364, Appendix A.
    \16\ OCC: 12 CFR part 34, subpart D, Appendix A; Board: 12 CFR 
208, Subpart E, Appendix C; and FDIC: 12 CFR part 365, subpart A, 
Appendix A. Financial institutions should have a program for 
establishing the market value of real property to comply with these 
real estate lending standards, which require financial institutions 
to determine the value used in loan-to-value calculations based in 
part on a value set forth in an appraisal or an evaluation.
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    The deferral of evaluations reflects the same considerations 
relating to the impact of COVID-19 as the deferral of appraisals. The 
agencies require evaluations for certain exempt transactions as a 
matter of safety and soundness. Evaluations do not need to comply with 
USPAP, but must be sufficiently robust to support a valuation 
conclusion. An evaluation can be less complex than an appraisal and 
usually takes less time to complete than an appraisal, but it also 
commonly involves physical property inspections. For these reasons, the 
agencies also are using their safety and soundness authority \17\ to 
allow for deferral of evaluations.
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    \17\ See 12 U.S.C. 1831p-1.
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    By the end of the deferral period, regulated institutions must 
obtain appraisals or evaluations that are consistent with safe and 
sound banking practices, as required by the agencies' appraisal 
regulations.

B. Summary of the Interim Final Rule

    The interim final rule allows a temporary deferral of the 
requirements for appraisals and evaluations under the agencies' 
appraisal regulations. The deferrals apply to both residential and 
commercial real estate-related financial transactions, excluding 
transactions for acquisition, development, and construction of real 
estate. The agencies are excluding transactions for acquisition, 
development, and construction of real estate because these loans 
present heightened risks not associated with financing existing real 
estate.
    Under the interim final rule, regulated institutions may close a 
real estate loan without a contemporaneous appraisal or evaluation, 
subject to a requirement that institutions obtain the appraisal or 
evaluation, as would have been required under the appraisal regulations 
without the deferral, within a grace period of 120 days after closing 
of the transaction. While appraisals and evaluations can be deferred, 
the agencies expect institutions to use best efforts and available 
information to develop a well-informed estimate of the collateral value 
of the subject property. For purposes of risk-weighting of residential 
mortgage exposures, an institution's prudent underwriting estimation of 
the collateral value of the subject property will be considered to meet 
the agencies' appraisal and evaluation requirements during the deferral 
period.\18\ In addition, the agencies continue to expect regulated 
institutions to adhere to internal underwriting standards for assessing 
borrowers' creditworthiness and repayment capacity, and to develop 
procedures for estimating the collateral's value for the purposes of 
extending or refinancing credit. Transactions for acquisition, 
development, and construction of real estate are being excluded because 
repayment of those transactions is generally dependent on the 
completion or sale of the property being held as collateral as opposed 
to repayment generated by existing collateral or the borrower. The 
agencies also expect institutions to develop an appropriate risk 
mitigation strategy if the appraisal or evaluation ultimately reveals a 
market value significantly lower than the expected market value. An 
institution's risk mitigation strategy should consider safety and 
soundness risk to the institution, balanced with mitigation of 
financial harm to COVID-19-affected borrowers. The temporary provision 
permitting regulated institutions to defer an appraisal or evaluation 
for eligible transactions will expire on December 31, 2020 (a 
transaction closed on or before December 31, 2020 is eligible for a 
deferral), unless extended by the agencies. The agencies believe that 
the limited timeframe for the deferral will in some respects help to 
manage potential risk by balancing the need for immediate relief due to 
the National Emergency with safety and soundness concerns for risk to 
lenders.
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    \18\ See OCC: 12 CFR 3.32(g); Board: 12 CFR 217.32(g); FDIC: 12 
CFR 324.32(g).
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II. Revisions to the Title XI Appraisal Regulations

    The interim final rule adds a new, temporary provision to the 
appraisal regulations that provides a 120-day deferral of appraisal and 
evaluation requirements for all transactions secured by commercial or 
residential real estate during the COVID-19 pandemic, excluding 
transactions for acquisition, development, and construction of real 
estate. The interim final rule does not revise any of the existing 
appraisal exceptions or any other requirements with respect to the 
performance of evaluations.
    The interim final rule will allow regulated institutions to quickly 
provide liquidity to owners of commercial and residential property. The 
temporary provision allowing regulated institutions to defer appraisals 
or evaluations for covered transactions will expire on December 31, 
2020, unless extended by the agencies.

III. Effective Date

    The interim final rule is effective April 17, 2020.

IV. Administrative Law Matters

A. Administrative Procedure Act

    The agencies are issuing this interim final rule without prior 
notice and the opportunity for public comment and the 30-day delayed 
effective date ordinarily prescribed by the Administrative Procedure 
Act (APA).\19\ Pursuant to section 553(b)(B) of the APA, general notice 
and the opportunity for public comment are not required with respect to 
a rulemaking when an ``agency for good cause finds (and incorporates 
the finding and a brief statement of reasons therefor in the rules 
issued) that notice and public procedure thereon are impracticable, 
unnecessary, or contrary to the public interest.'' \20\
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    \19\ 5 U.S.C. 553.
    \20\ 5 U.S.C. 553(b)(B).
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    The agencies believe that the public interest is best served by 
implementing the interim final rule as soon as possible. As discussed 
above, recent events have suddenly and significantly affected global 
economic activity, increasing businesses' and households' need to have 
timely access to liquidity from real estate equity. In addition, the 
spread of COVID-19 has greatly increased the difficulty of performing 
real estate appraisals and evaluations in a timely manner. This relief 
will allow regulated institutions to better focus on supporting lending 
to creditworthy households and businesses in light of recent strains on 
the U.S. economy as a

[[Page 21316]]

result of COVID-19, while reaffirming the safety and soundness 
principle that valuation of collateral is an essential part of the 
lending decision. For these reasons, the agencies find that there is 
good cause consistent with the public interest to issue the rule 
without advance notice and comment.\21\
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    \21\ 5 U.S.C. 553(b)(B); 553(d)(3)
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    The APA also requires a 30-day delayed effective date, except for 
(1) substantive rules which grant or recognize an exemption or relieve 
a restriction; (2) interpretative rules and statements of policy; or 
(3) as otherwise provided by the agency for good cause.\22\ Because the 
rules relieve a restriction, the interim final rule is exempt from the 
APA's delayed effective date requirement.\23\ Additionally, the 
agencies find good cause to publish the interim final rule with an 
immediate effective date for the same reasons set forth above under the 
discussion of section 553(b)(B) of the APA.
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    \22\ 5 U.S.C. 553(d).
    \23\ 5 U.S.C. 553(d)(1).
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    While the agencies believe that there is good cause to issue the 
rule without advance notice and comment and with an immediate effective 
date, the agencies are interested in the views of the public and 
request comment on all aspects of the interim final rule.

B. Congressional Review Act

    For purposes of Congressional Review Act, the Office of Management 
and Budget (OMB) makes a determination as to whether a final rule 
constitutes a ``major'' rule.\24\ If a rule is deemed a ``major rule'' 
by the OMB, the Congressional Review Act generally provides that the 
rule may not take effect until at least 60 days following its 
publication.\25\
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    \24\ 5 U.S.C. 801 et seq.
    \25\ 5 U.S.C. 801(a)(3).
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    The Congressional Review Act defines a ``major rule'' as any rule 
that the Administrator of the Office of Information and Regulatory 
Affairs of the OMB finds has resulted in or is likely to result in (A) 
an annual effect on the economy of $100,000,000 or more; (B) a major 
increase in costs or prices for consumers, individual industries, 
Federal, State, or local government agencies or geographic regions, or 
(C) significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of United States-based 
enterprises to compete with foreign-based enterprises in domestic and 
export markets.\26\
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    \26\ 5 U.S.C. 804(2).
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    For the same reasons set forth above with respect to APA 
requirements, the agencies are adopting the interim final rule without 
the delayed effective date generally prescribed under the Congressional 
Review Act. The delayed effective date required by the Congressional 
Review Act does not apply to any rule for which an agency for good 
cause finds (and incorporates the finding and a brief statement of 
reasons therefor in the rule issued) that notice and public procedure 
thereon are impracticable, unnecessary, or contrary to the public 
interest.\27\ In light of households' and businesses' immediate need to 
access liquidity from real estate equity, combined with the difficulty 
of obtaining appraisals during the ongoing COVID-19 outbreak, the 
agencies believe that delaying the effective date of the rule would be 
contrary to the public interest.
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    \27\ 5 U.S.C. 808(2).
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    As required by the Congressional Review Act, the agencies will 
submit the final rule and other appropriate reports to Congress and the 
Government Accountability Office for review.

C. Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act 
of 1995 \28\ (PRA), the agencies may not conduct or sponsor, and a 
respondent is not required to respond to, an information collection 
unless it displays a currently valid OMB control number. The agencies 
have reviewed this final rule and determined that it would not 
introduce any new or revise any collection of information pursuant to 
the PRA. Therefore, no submissions will be made to OMB for review.
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    \28\ 44 U.S.C. 3501-3521.
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D. Regulatory Flexibility Act
    The Regulatory Flexibility Act (RFA) \29\ generally requires that 
an agency to consider whether the rule it proposes will have a 
significant economic impact on a substantial number of small 
entities.\30\ The RFA applies only to rules for which an agency 
publishes a general notice of proposed rulemaking pursuant to 5 U.S.C. 
553(b).\31\ As discussed previously, consistent with section 553(b)(B) 
of the APA, the agencies have determined for good cause that general 
notice and opportunity for public comment is unnecessary, and therefore 
the agencies are not issuing a notice of proposed rulemaking. 
Accordingly, the agencies have concluded that the RFA's requirements 
relating to initial and final regulatory flexibility analysis do not 
apply.
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    \29\ 5 U.S.C. 601 et seq.
    \30\ 5 U.S.C. 604. Under regulations issued by the Small 
Business Administration, a small entity includes a depository 
institution, bank holding company, or savings and loan holding 
company with total assets of $600 million or less and trust 
companies with total assets of $41.5 million or less. See 13 CFR 
121.201.
    \31\ 5 U.S.C. 604(a).
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    Nevertheless, the agencies seek comment on whether, and the extent 
to which, the interim final rule would affect a significant number of 
small entities.

E. Riegle Community Development and Regulatory Improvement Act of 1994

    Pursuant to section 302(a) of the Riegle Community Development and 
Regulatory Improvement Act (RCDRIA),\32\ in determining the effective 
date and administrative compliance requirements for new regulations 
that impose additional reporting, disclosure, or other requirements on 
insured depository institutions (IDIs), each Federal banking agency 
must consider, consistent with the principle of safety and soundness 
and the public interest, any administrative burdens that such 
regulations would place on depository institutions, including small 
depository institutions, and customers of depository institutions, as 
well as the benefits of such regulations. In addition, section 302(b) 
of RCDRIA requires new regulations and amendments to regulations that 
impose additional reporting, disclosure, or other new requirements on 
IDIs generally to take effect on the first day of a calendar quarter 
that begins on or after the date on which the regulations are published 
in final form, with certain exceptions, including for good cause.\33\ 
The interim final rule would not impose any additional reporting, 
disclosure, or other new requirements on IDIs. Therefore, for the 
reasons described above, the agencies find good cause exists under 
section 302 of RCDRIA to publish this interim final rule with an 
immediate effective date. As such, the interim final rule will be 
effective on April 17, 2020. Nevertheless, the agencies seek comment on 
RCDRIA.
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    \32\ 12 U.S.C. 4802(a).
    \33\ 12 U.S.C. 4802.
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F. Use of Plain Language

    Section 722 of the Gramm-Leach-Bliley Act \34\ requires the Federal 
banking agencies to use plain language in all proposed and final rules 
published after January 1, 2000. The agencies have sought to present 
the final rule in a simple and straightforward manner and invite 
comments on whether there are additional steps the

[[Page 21317]]

agencies could take to make the rule easier to understand. For example:
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    \34\ 12 U.S.C. 4809.
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     Have the agencies organized the material to suit your 
needs? If not, how could this material be better organized?
     Are the requirements in the regulation clearly stated? If 
not, how could the regulation be more clearly stated?
     Does the regulation contain language or jargon that is not 
clear? If so, which language requires clarification?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the regulation easier to 
understand? If so, what changes to the format would make the regulation 
easier to understand?
     What else could we do to make the regulation easier to 
understand?

G. OCC Unfunded Mandates Reform Act of 1995 Determination

    As a general matter, the Unfunded Mandates Reform Act of 1995 
(UMRA), 2 U.S.C. 1531 et seq., requires the preparation of a budgetary 
impact statement before promulgating a rule that includes a Federal 
mandate that may result in the expenditure by State, local, and tribal 
governments, in the aggregate, or by the private sector, of $100 
million or more in any one year. However, the UMRA does not apply to 
final rules for which a general notice of proposed rulemaking was not 
published.\35\ Therefore, because the OCC has found good cause to 
dispense with notice and comment for this interim final rule, the OCC 
has not prepared an economic analysis of the rule under the UMRA.
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    \35\ See 2 U.S.C. 1532(a).
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List of Subjects

12 CFR Part 34

    Appraisal, Appraiser, Banks, Banking, Consumer protection, Credit, 
Mortgages, National banks, Reporting and recordkeeping requirements, 
Savings associations, Truth in lending.

12 CFR Part 225

    Administrative practice and procedure, Banks, banking, Federal 
Reserve System, Capital planning, Holding companies, Reporting and 
recordkeeping requirements, Securities, Stress testing

12 CFR Part 323

    Banks, banking, Mortgages, Reporting and recordkeeping 
requirements, Savings associations.

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Chapter I

Authority and Issuance

    For the reasons set forth in the joint preamble, the OCC amends 
part 34 of chapter I of title 12 of the Code of Federal Regulations as 
follows:

PART 34--REAL ESTATE LENDING AND APPRAISALS

0
1. The authority citation for part 34 continues to read as follows:

    Authority: 12 U.S.C. 1, 25b, 29, 93a, 371, 1462a, 1463, 1464, 
1465, 1701j-3, 1828(o), 3331 et seq., 5101 et seq., and 
5412(b)(2)(B), and 15 U.S.C. 1639h.



0
2. Section 34.43 is amended by adding paragraph (f) to read as follows:


Sec.  34.43   Appraisals required; transactions requiring a State 
certified or licensed appraiser.

* * * * *
    (f) Deferrals of appraisals and evaluations for certain residential 
and commercial transactions--(1) 120-day grace period. The completion 
of appraisals and evaluations required under paragraphs (a) and (b) of 
this section may be deferred up to 120 days from the date of closing.
    (2) Covered transactions. The deferrals authorized under paragraph 
(f)(1) of this section apply to all residential and commercial real 
estate-secured transactions, excluding transactions for acquisition, 
development, and construction of real estate.
    (3) Sunset. The appraisal and evaluation deferrals authorized by 
this paragraph (f) will expire for transactions closing after December 
31, 2020.

FEDERAL RESERVE BOARD

12 CFR Chapter II

Authority and Issuance

    For the reasons set forth in the joint preamble, the Board amends 
part 225 of chapter II of title 12 of the Code of Federal Regulations 
as follows:

PART 225--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL 
(REGULATION Y)

0
 3. The authority citation for part 225 continues to read as follows:

    Authority: 12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 1831p-1, 
1843(c)(8), 1844(b), 1972(l), 3106, 3108, 3310, 3331 et seq., 31206, 
31207, and 31209; 15 U.S.C. 1681s, 1681w, 6801 and 6805.


0
4. Section 225.63 is amended by adding paragraph (f) to read as 
follows:


Sec.  225.63  Appraisals required; transactions requiring a State 
certified or licensed appraiser.

* * * * *
    (f) Deferrals of appraisals and evaluations for certain residential 
and commercial transactions--(1) 120-day grace period. The completion 
of appraisals and evaluations required under paragraphs (a) and (b) of 
this section may be deferred up to 120 days from the date of closing.
    (2) Covered transactions. The deferrals authorized under paragraph 
(f)(1) of this section apply to all residential and commercial real 
estate-secured transactions, excluding transactions for acquisition, 
development, and construction of real estate.
    (3) Sunset. The appraisal and evaluation deferrals authorized by 
this paragraph (f) will expire for transactions closing after December 
31, 2020.

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Chapter III

Authority and Issuance

    For the reasons set forth in the joint preamble, the FDIC amends 
part 323 of chapter III of title 12 of the Code of Federal Regulations 
as follows:

PART 323--APPRAISALS

0
5. The authority citation for part 323 continues to read as follows:

    Authority: 12 U.S.C. 1818, 1819(a) (``Seventh'' and ``Tenth''), 
1831p-1 and 3331 et seq.


0
6. Section 323.3 is amended by adding paragraph (g) to read as follows:


Sec.  323.3   Appraisals required; transactions requiring a State 
certified or licensed appraiser.

* * * * *
    (g) Deferrals of appraisals and evaluations for certain residential 
and commercial transactions--(1) 120-day grace period. The completion 
of appraisals and evaluations required under paragraphs (a) and (b) of 
this section may be deferred up to 120 days from the date of closing.
    (2) Covered transactions. The deferrals authorized under paragraph 
(g)(1) of this section apply to all residential and commercial real 
estate-secured transactions, excluding transactions for acquisition, 
development, and construction of real estate.
    (3) Sunset. The appraisal and evaluation deferrals authorized by 
this

[[Page 21318]]

paragraph (g) will expire for transactions closing after December 31, 
2020.

Brian P. Brooks,
First Deputy Comptroller of the Currency.

    By order of the Board of Governors of the Federal Reserve 
System, April 10, 2020.
Ann Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.

    By order of the Board of Directors.

    Dated at Washington, DC, on or about April 10, 2020.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2020-08216 Filed 4-16-20; 8:45 am]
BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P