2025 PRA AMC Supporting Statement

“ Minimum Requirements for Appraisal

Management Companies”

OMB Control Number 2590-0013

Supporting Statement

A. JUSTIFICATION

1. Circumstances Necessitating the Collection of Information

In 2015, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), the Bureau of Consumer Financial Protection (Bureau), and FHFA (collectively, the Agencies) jointly issued regulations¹ to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) relating to the eligibility of appraisal management companies (AMCs) to provide appraisal management services for real estate related financial transactions that are engaged in, contracted for, or regulated by a “federal financial institutions regulatory agency” or the Resolution Trust Corporation (Federally related transactions).² Generally, these statutory provisions provide that an AMC either be registered with a State’s appraiser certifying and licensing agency or be subject to oversight by a federal financial institutions regulatory agency in order to participate in a Federally related transaction.³

As required by the Dodd-Frank Act provisions, the Agencies’ joint AMC regulations establish minimum requirements for the registration and supervision of AMCs to be applied by states that have elected to establish an appraiser certifying and licensing agency with authority to register and supervise AMCs (participating states).⁴ The joint 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 a national registry of AMCs (AMC National Registry or Registry).⁵ The AMC National Registry includes 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 the Board (federally regulated AMCs)⁶; or (2) registered with, and subject to supervision of, a state appraiser certifying and licensing agency. 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 the Board and contains the recordkeeping and reporting requirements described in Item #2 below.⁷

2. Use of Data

The information collection requirements of the joint AMC regulations fall into three general categories: reporting requirements imposed on states, recordkeeping requirements imposed on states, and disclosure requirements imposed on AMCs. These categories of collections and the use of the data collected are described below:

1. Written Notice of Appraiser Removal From Network or Panel), (IC #1, formerly IC #3)

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.⁸ 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.⁹ The AMC would retain these notices in its files.

II. State Recordkeeping Requirements (IC #2, formerly IC #1)

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.¹⁰

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.¹¹

III. AMC Reporting Requirements (State-Regulated AMCs) (IC#3, formerly OC #2)

The regulation provides that an AMC may not be registered by a state or included on the AMC National Registry 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.¹² 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.¹³ Thus, each AMC registering with a state must provide information to the state on compliance with those ownership restrictions.

3. Use of Information Technology

The rule does not specify the manner in which the information must be retained or reported. This has been left to the discretion of the either the ASC or the individual participating states, which may use any available type of information technology to meet the requirements of the rule.

4. Efforts to Identify Duplication

The information that AMCs and participating states are required to report or retain under the rule is not available from any alternative sources.

5. Impact on Small Entities

This information collection does not have a significant economic impact on a substantial number of small entities.

6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction

The various aspects of this information collection are primarily event-driven. Less frequent collections would compromise the effectiveness of the AMC regulations’ substantive requirements.

7. Circumstances Requiring Special Information Collection

There are no special circumstances that would require FHFA to conduct the information collection in a manner inconsistent with the guidelines provided in Item 7.

8. Solicitation of Comments on Information Collection

In accordance with the requirements of 5 CFR 1320.8(d), FHFA published an initial notice and request for comments regarding the renewal of the PRA clearance for this information collection in the Federal Register on January 15, 2025.¹⁴ FHFA received no comments.

9. Provision of Payments to Respondents

No payments or gifts are made to respondents.

10. Assurance of Confidentiality

The Agencies have not provided, and are not required to provide, any assurance of confidentiality with respect to the information to be collected.

11. Questions of Sensitive Nature

There are no questions of a sensitive nature in this information collection.

12. Estimated Burden of 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. 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 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 among them. For IC #1 and #3, which relates to disclosure requirements imposed upon state regulated AMCs the OCC, FDIC, and the Board are each responsible for 30 percent of the total burden, while FHFA is responsible only for 10 percent of the total burden. For IC #2, which relates to reporting and recordkeeping requirements imposed upon participating states, each agency is responsible for 25 percent of the total estimated burden.

The Agencies estimate the total annualized hour burden placed on respondents by the information collection in the joint AMC regulations to be 6,651 hours. FHFA estimates its share of the hour burden to be 678 hours. The calculations on which those estimations are based are described below.

IC #1 Written Notice of Appraiser Removal From Network or Panel

State-regulated AMCs disclose written notices sent or received regarding appraiser removal from the AMC’s network or panel. The Agencies estimate that the total number of annual respondents for this information collection is 28,270, with one notice sent per respondent. The estimated number of respondents per year allocated to each of the four agencies (FDIC, FRB, OCC, and FHFA) is calculated by splitting the total estimated number of respondents using a ratio of 3:3:3:1. Thus, the estimated number of annual respondents attributable to FHFA for this IC is 2,872 (28,270 notices x 10% = 2,827). FHFA estimates an average of 5 minutes per response. The total hour burden attributable to FHFA is 236 (2,827 notices x 5 minutes = 236, after rounding up).

• Total estimated number of respondents: 28,270

• Removal notices sent or received by AMC per appraiser: 1

• Total removal notices sent or received by AMCs: 28,270

• Removal notices attributable to FHFA: 2,827

• Reporting time per notice: 5 minutes

• Total hours attributable to FHFA: 236

• Hourly rate: $97.96

• Total cost attributable to FHFA: $23,119

IC #2 State Recordkeeping Requirements

States without a current AMC certifying and licensing program that elect to establish such a program as a result of the rule maintain records related to the rule’s substantive requirements. According to the ASC, there are 5 states that do not have an AMC program. The estimated number of respondents is split evenly among the four agencies, which amounts to one respondent each, after rounding up to a whole number. FHFA estimates 40 hours per recordkeeping activity, which is unchanged from the previous ICR. The total hour burden attributable to FHFA is 40 (40 hours x 1 respondent).

• Attributable to all Agencies combined:

  • Number of states without current AMC certifying and licensing programs: 5

  • Recordkeeping activities per state: 1

  • Total recordkeeping activities: 5

  • Recordkeeping activities attributable to FHFA: 1

  • Recordkeeping time per activity: 40 hours

  • Total hours attributable to FHFA: 40

  • Hourly rate: $97.96

  • Total costs attributable to FHFA: $3,918

IC #3 AMC Disclosure Requirements

State-regulated AMCs disclose to states information necessary to determine whether any person that owns more than 10 percent of the AMC has had an appraiser license or certificate refused, denied, cancelled, surrendered in lieu of revocation, or revoked in any state. The Agencies estimate the number of state-regulated AMCs for the next three years as 4,020. The estimated number of respondents per year allocated to each of the four agencies (FDIC, FRB, OCC, and FHFA) is calculated by splitting the total estimated number of respondents using a ratio of 3:3:3:1. Thus, the estimated number of annual respondents attributable to FHFA for this IC is 402.

• Number of respondents attributable to all Agencies: 4,020

• Total respondents attributable to FHFA: 402

• Preparation time per report: 1 hour

• Total hours attributable to FHFA: 402

• Hourly rate: $97.96

• Total compensation costs attributable to FHFA: 39,379

13. Estimated Total Annualized Cost Burden to Respondents

FHFA has not identified any start-up costs to respondents. It is expected that states and AMCs will already have the infrastructure in place to carry out the rule’s reporting and recordkeeping requirements.

14. Estimated Cost to the Federal Government

There will be no costs to the Federal government associated with this information collection.

15. Reasons for Change in Burden

Compared to the estimates contained in FHFA’s 2021 Supporting Statement, the estimated burden associated with this information collection decreased from 837 to 678 hours. While FHFA’s estimated burden hours for IC#1, written notice of appraiser removal, increased from 33 in 2021 to 236 in 2024, the estimated number of respondents to IC#3, AMC disclosure requirements decreased from 764 to 402.

16. Plans for Tabulation, Statistical Analysis and Publication

FHFA will not publish the results of this information collection.

17. If Seeking Approval to Not Display the Expiration Date for OMB Approval of the Information Collection, Explain the Reasons Why Display Would Be Inappropriate

FHFA plans to display the expiration date for OMB approval.

18. Explain Each Exception to the Topics of the Certification Statement Identified in “Certification for Paperwork Reduction Act Submission.”

There are no exceptions to the certification statement identified in Item 18.

B. COLLECTION OF INFORMATION EMPLOYING STATISTICAL METHODS

This information collection does not employ statistical methods.

1 See 80 FR 32658 (June 9, 2015). By agreement, the responsibility for clearance under the PRA of information collections contained in the joint regulations is shared only by the FDIC, OCC, the Board, and FHFA.

2 See 12 U.S.C. 3350(4), (5). “Federal financial regulatory agency” includes the FDIC, OCC, the Board, and National Credit Union Administration. See 12 U.S.C. 3350(6).

3 Section 1117 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), 12 U.S.C. 3346, permits states to establish an appraiser certifying and licensing agency “to assure the availability of State certified and licensed appraisers for the performance in a State of appraisals in federally related transactions and to assure effective supervision of the activities of certified and licensed appraisers.” The Dodd-Frank Act amended section 1117 to provide that the duties of a state appraiser certifying and licensing agency may also include the registration and supervision of AMCs. Although states are not required by federal law to register and supervise AMCs, or even to establish an appraiser certifying and licensing agency, an AMC that is not registered with such a state agency (except for those regulated by a Federal financial institutions regulatory agency) may not participate in a federally related transaction in that state. See 12 U.S.C. 3353(f)(1).

4 See 12 CFR 1222.23.

5 See 12 U.S.C. 3353(e).

6 See 12 CFR 1222.21(k) (defining “Federally regulated AMC”).

7 See 12 CFR §§ 1222.20-1222.26. For clarity, the regulatory citations herein are to FHFA’s version of the joint regulations only.

8 See 12 CFR 1222.21(c)(1)(iii).

9 See 12 CFR 1222.22(b).

10 See 12 CFR 1222.23(a).

11 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).

12 See 12 CFR §§ 1222.24(a), 25(b).

13 See 12 CFR 1222.24(b).

14 See 90 FR 3865 (Jan. 15, 2025).