[Federal Register Volume 61, Number 204 (Monday, October 21, 1996)]
[Notices]
[Pages 54645-54647]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-26933]
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FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL
[Docket No. AS96-1]
Appraisal Subcommittee; Appraisal Policy; Temporary Practice and
Reciprocity
AGENCY: Appraisal Subcommittee, Federal Financial Institutions
Examination Council.
ACTION: Proposal of policy statement and request for comments.
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SUMMARY: The Appraisal Subcommittee (``ASC'') of the Federal Financial
Institutions Examination Council is proposing for public comment a new
policy statement (``Statement'') regarding temporary practice and
reciprocity. The Statement is intended to implement section 315 of the
Riegle Community Development and Regulatory Improvement Act of 1994
(``CDRIA'').
DATES: Comments must be received on or before December 5, 1996.
ADDRESSES: Persons wishing to submit written comments should file them
with Ben Henson, Executive Director, or Marc L. Weinberg, General
Counsel, Appraisal Subcommittee, 2100 Pennsylvania Avenue, N.W., Suite
200, Washington, D.C. 20037. Comments may be forwarded via fax to (202)
634-6555. All comment letters should refer to Docket No. AS96-1. All
comment letters will be available for public inspection and copying at
the ASC's offices.
FOR FURTHER INFORMATION CONTACT: Ben Henson, Executive Director, or
Marc L. Weinberg, General Counsel, at (202) 634-6520, Appraisal
Subcommittee, 2100 Pennsylvania Avenue, N.W., Suite 200, Washington,
D.C. 20037.
SUPPLEMENTARY INFORMATION:
I. Introduction and Background
Since January 1, 1993, Title XI of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 (``Title XI''), as
amended,1 has required all federally regulated financial
institutions to use State licensed or certified real estate appraisers,
as appropriate, to perform appraisals in federally related
transactions. See Section 1119(a) of Title XI, 12 U.S.C. 3348(a). In
response to Title XI, each State, territory and the District of
Columbia (``State'') has established a regulatory program for
certifying, licensing and supervising real estate appraisers. In turn,
the ASC has been monitoring State programs to ensure their compliance
with Title XI.
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\1\ Pub. L. 101-73, 103 Stat. 183 (1989), as amended by Pub. L.
102-233, 105 Stat. 1792 (1991), Pub. L. 102-242, 105 Stat. 2386
(1991), Pub. L. 102-550, 106 Stat. 3672 (1992), Pub. L. 102-485, 106
Stat. 2771 (1992), Pub. L. 103-325, 108 Stat. 2222 (1994); and Pub
L. 104-208, 110 Stat. 3009 (1996).
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While Title XI authorizes each State to certify, license and
supervise real estate appraisers within its jurisdiction, the Title
also provides a means for appraisers licensed or certified in one State
to practice on a temporary basis in another State. Section 1122(a)(1)
of Title XI, 12 U.S.C. 3351(a)(1), specifically requires ``[a] State
appraiser certifying or licensing agency [(`State agency') to]
recognize on a temporary basis the certification or license of an
appraiser issued by another State if--(A) the property to be appraised
is part of a federally related transaction, (B) the appraiser's
business is of a temporary nature, and (C) the appraiser registers with
the appraiser certifying or licensing agency in the State of temporary
practice.''
Reciprocity provides appraisers certified or licensed in one State
with a means to practice in another State on a permanent basis. While
Title XI, until recently, did not specifically mention reciprocity, the
ASC encouraged States
[[Page 54646]]
to enter into reciprocal appraiser licensing and certification
agreements and arrangements.
In September 1994, Section 315 of CDRIA was enacted. Public Law
103-325, 108 Stat. 2160, 2222 (1994). CDRIA amended Section 1122(a) of
Title XI by adding new subparagraph (2) (12 U.S.C. 3351(a)(2))
pertaining to temporary practice and new paragraph (b) (12 U.S.C.
3351(b)) regarding reciprocity:
(2) Fees for temporary practice. A State appraiser certifying or
licensing agency shall not impose excessive fees or burdensome
requirements, as determined by the Appraisal Subcommittee, for
temporary practice under this subsection.
* * * * *
(b) Reciprocity. The Appraisal Subcommittee shall encourage the
States to develop reciprocity agreements that readily authorize
appraisers who are licensed or certified in one State (and who are
in good standing with their State appraiser certifying or licensing
agency) to perform appraisals in other States.
The Senate Report to accompany S. 1275, issued on October 28, 1994,
by the Senate Committee on Banking, Housing, and Urban Affairs, said:
The Committee's intent is to enable qualified appraisers to
practice in a number of States without anticompetitive restrictions.
S. Rep. No. 103-169, 103d Cong., 2d Sess. 53 (1994), reprinted in
1994 U.S. Code Cong. & Admin. News 1937.
Using this statement and the wording of the amendments, the ASC can
define the ambiguous terms, ``excessive fees'' or ``burdensome
requirements,'' in new section 1122(a)(2), and can interpret how they
fit into the ASC's existing enforcement powers in Title XI. The ASC
also may determine the meaning and application of new paragraph (b)
regarding reciprocity. The paragraph's language, however, limits the
ASC's range of interpretation because it only requires the ASC to
``encourage'' the States to develop reciprocity agreements.
II. The September 1995 Notice Soliciting Comment
On September 12, 1995, the ASC published a notice in the Federal
Register soliciting public comments on how it should implement section
315 of CDRIA. See 60 FR 47365. This notice, among other things,
described Statements 5 and 6 of the ASC's August 4, 1993 Policy
Statements Regarding State Certification and Licensing of Real Estate
Appraisers, which respectively discussed temporary practice and
reciprocity, described the then-current status of temporary practice
and reciprocity and presented several alternatives for discussion and
comment. Temporary practice alternatives included the ``universal
drivers license approach,'' ``specific standards'' and ``general
standards.'' Reciprocity alternatives also included the drivers license
approach, but separately discussed creating a Federal duty and
requesting States to create and file plans with the ASC. For details
regarding these approaches, see 60 FR 47365 (September 12, 1995). The
ASC additionally requested comments on all aspects of implementing the
new legislation and welcomed variations or combinations of the
discussed alternatives or other alternatives. Finally, the ASC asked
the following questions:
(1) In your view, what are the most serious impediments to
temporary practice or reciprocity? Please provide your best
estimates of their costs in time and money, if possible.
(2) Do you believe that these impediments warrant ASC action?
(3) Are any of the alternatives presented * * * especially well
suited to removing the impediments, and what are your reasons for
your choice?
(4) Do other alternatives exist? If so, please describe them.
The ASC received 46 comment letters in response to the Notice: 24
from individual appraisers; eight from trade associations; six from
State agencies; five from financial institutions; two from individual
real estate professionals; and one from a Federal agency.
The commenters agreed that serious impediments to temporary
practice and reciprocity exist, and that those impediments warrant ASC
action. In connection with temporary practice, the commenters noted
that the most significant impediments were: the need for an out-of-
State appraiser to obtain, and pay for, a ``letter of good standing'';
the need for States to obtain from out-of-State appraisers signed
consent to local service forms; short time limits on the length of
permits; the inability to receive extensions of time on permits; the
granting of permits on a per property or time basis, rather than on a
per assignment basis; and a general ``protectionist'' attitude on the
part of some State agencies. Respecting reciprocity, the commenters
pointed to the widespread lack of uniformity in State agency-approved
education courses for initial certification or licensing and for
continuing education purposes and the significant length of time often
needed by States to process reciprocity applications.
A majority of the commenters supported adoption of the drivers
license approach. Adopting this approach, however, would necessarily
require the ASC to pre-empt conflicting State statutes, regulations and
practices. The ASC concluded that pre-emption would be inappropriate.
Instead, the ASC has decided to propose for public comment, and perhaps
subsequently adopt, this policy statement.
III. Conclusion
On the basis of the foregoing, the ASC is proposing for public
comment a new policy entitled, Policy Statement Respecting Temporary
Practice and Reciprocity, as set forth in the following appendix. If
adopted, this Policy Statement would amend and supersede previous ASC
guidance respecting temporary practice and reciprocity in ASC Policy
Statements 5 and 6, which were published in August 1993.
Dated: October 15, 1996.
By the Appraisal Subcommittee.
Diana L. Garmus,
Chairperson.
Appendix A--Proposed Policy Statement
________________, 1996.
Policy Statement Respecting Temporary Practice and Reciprocity
This Policy Statement implements amendments to Section 1122(a)
of Title XI of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989. The amendments added subparagraph (2) (12
U.S.C. 3351(a)(2)) pertaining to temporary practice and paragraph
(b) (12 U.S.C. 3351(b)) regarding reciprocity, which state:
(2) Fees for temporary practice. A State appraiser certifying or
licensing agency shall not impose excessive fees or burdensome
requirements, as determined by the Appraisal Subcommittee, for
temporary practice under this subsection.
* * * * *
(b) Reciprocity. The Appraisal Subcommittee shall encourage the
States to develop reciprocity agreements that readily authorize
appraisers who are licensed or certified in one State (and who are
in good standing with their State appraiser certifying or licensing
agency) to perform appraisals in other States.
The Policy Statement amends and supersedes previous ASC guidance
respecting temporary practice and reciprocity in ASC Policy
Statements 5 and 6, which were published in August 1993.
I. Temporary Practice
Title XI requires a State appraiser regulatory agency (``State
agency'') to recognize on a temporary basis the certification or
license of an appraiser from another State provided: (1) the
property to be appraised is part of a Federally related transaction;
(2) the appraiser's business is of a temporary nature; and (3) the
appraiser registers with the State appraiser regulatory agency in
the State of temporary practice.
[[Page 54647]]
Thus, a certified or licensed appraiser from State A, who has an
assignment concerning a Federally related transaction in State B,
has a statutory right to enter State B, register with the State
agency in State B and perform the assignment. Title XI does not
require State B to offer temporary practice to persons who are not
certified or licensed appraisers, including appraiser assistants not
under the direct supervision of an appraiser certified or licensed
in State A.
Title XI also states that a State appraiser certifying or
licensing agency shall not impose excessive fees or burdensome
requirements, as determined by the ASC, for temporary practice. The
ASC may consider the following fees, acts and practices of the State
of temporary practice to be ``excessive fees'' or ``burdensome
requirements'':
Prohibiting temporary practice;
Requiring temporary practitioners to obtain a permanent
certification or license in the State of temporary practice;
Taking more than five business days to issue a
temporary practice permit (if issuance is required under State law)
or to provide effective notice to the out-of-State appraiser
regarding his or her temporary practice request;
Requiring out-of-State appraisers requesting temporary
practice to satisfy the host State's appraiser qualification
requirements for certification which exceed the minimum required
criteria for certification adopted by the Appraiser Qualification
Board (``AQB'');
Imposing a time frame on out-of-State certified
appraisers to complete an appraisal assignment in a federally
related transaction;
Limiting out-of-State certified appraisers to a single
temporary practice permit per calendar year;
Requiring temporary practitioners to affiliate with an
in-State certified or licensed appraiser;
Failing to take regulatory responsibility for a
visiting appraiser's unethical, incompetent or fraudulent practices
performed while within the State; and
Charging temporary practice fees that impede temporary
practice. The ASC will consider fees of $150 or less as reasonable.
The ASC may ask State agencies to justify temporary practice fees.
In addition, the ASC may consider fees, acts and practices of
the certified or licensed appraiser's home State to be ``excessive
fees'' or ``burdensome requirements.'' For example, the practice of
delaying the issuance of a written ``letter of good standing'' or
similar document for more than five business days after the home
State agency's receipt of the related request could be a
``burdensome requirement.''
This listing is not exclusive. The ASC may find other excessive
fees or burdensome practices while performing its State agency
monitoring functions. To help to avoid such an occurrence, the ASC
favors that States issuing temporary practice permits use a ``post
card'' temporary practice registration form to: (1) identify the
appraiser; (2) provide the starting date of when the appraiser will
be ``in-State''; (3) obtain affirmations that the appraiser
currently is not subject to any appraiser certification or licensure
disciplinary proceeding in any State, and that his or her license or
certificate is fully valid; and (4) obtain the appraiser's consent
to service in the State of temporary practice. The temporary
practitioner would send the completed, signed and dated form to the
State agency in the temporary practice State, together with the
appropriate fee, and could send a copy to his or her home State
agency. The appraiser would retain an exact copy for use in the
State of temporary practice as evidence that the appraiser is
eligible to perform the appraisal assignment. The ASC suggests that
appraisers should be able to begin the appraisal assignment in the
State of temporary practice immediately after the completed form and
proper fee is irrevocably sent to that State's appraiser regulatory
agency.
II. Reciprocity
Section 1122(b) of Title XI, 12 U.S.C. 3347(b), states that the
ASC shall encourage the States to develop reciprocity agreements
that readily authorize appraisers who are licensed or certified in
one State (and who are in good standing with their State appraiser
certifying or licensing agency) to perform appraisals in other
States. Each State should work expeditiously and conscientiously
with other States with a view toward satisfying the purposes of the
statutory language. The ASC will monitor each State's progress and
will encourage States to work out issues and difficulties whenever
appropriate.
The ASC encourages States to enter into reciprocal agreements
that, at a minimum, contain the following features:
Accomplish reciprocity with at least all contiguous
States. For States not sharing geographically contiguous borders
with any other State, such as Alaska and Hawaii, those States should
enter into reciprocity agreements with States that certify or
license appraisers who perform a significant number of appraisals in
the non-contiguous States;
Eliminate the use of letters of good standing or
similar documents;
Readily accept other States' certifications and
licenses without reexamining applicants' underlying education and
experience, so long as the other State: (1) has appraiser
qualification criteria that meet the minimum standards for
certification and licensure as adopted by the AQB; and (2) uses
appraiser certification or licensing examination that are AQB
endorsed;
Eliminate retesting, so long as the applicant has
passed the appropriate AQB-endorsed appraiser certification and
licensing examinations in the appraiser's home State;
Recognize and accept successfully completed continuing
education courses taken to qualify for license or certification
renewal in the appraiser's home State; and
Establish reciprocal licensing or certification fees
identical in amount to the corresponding fees for home State
appraisers.
* * * * *
[FR Doc. 96-26933 Filed 10-18-96; 8:45 am]
BILLING CODE 6210-01-P
