2010-32230. Appraisal Subcommittee (ASC); ASC Rules of Operation; Amended

AGENCY:

Appraisal Subcommittee of the Federal Financial Institutions Examination Council.

ACTION:

Notice of adoption of amended ASC Rules of Operation by vote of the ASC at its December 8, 2010 meeting. The amended ASC Rules of Operation supersede the ASC Rules of Operation as published in 56 FR 28561 (June 21, 1991), and as previously amended by 56 FR 33451 (July 22, 1991); therefore, 56 FR 28561 and 56 FR 33451 will be withdrawn, removed, and deleted upon publication of the amended ASC Rules of Operation.

SUMMARY:

This notice announces the Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council's (FFIEC) adoption of its amended ASC Rules of Operation. The ASC Rules of Operation serve as corporate bylaws outlining the ASC's purpose, functions, authority, organization and operation.

SUPPLEMENTARY INFORMATION:

Section 1102 (12 U.S.C. 3310) of Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Title XI) established the ASC. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act) amended numerous provisions in Title XI. The amended ASC Rules of Operation reflect the amendments to Title XI brought about by the Dodd-Frank Act, and describe, among other things, the organization of ASC meetings, notice requirements for meetings, quorum requirements, and certain practices regarding the disclosure of information.

DATES:

Effective Date: Immediately.

FOR FURTHER INFORMATION CONTACT:

James R. Park, Executive Director, at [phone], or Alice M. Ritter, General Counsel, at [phone], via Internet e-mail at [e-mail] and [e-mail], respectively, or by U.S. Mail at Appraisal Subcommittee, 1401 H Street, NW., Suite 760, Washington, DC 20005.

* * * * *

ASC Rules of Operation

Article I

Nature and Purpose

Section 1.01. Appraisal Subcommittee Established.

The Appraisal Subcommittee (ASC) is established by Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Title XI), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act).

Section 1.02. Definitions.

(1) Appraisal Subcommittee; ASC. The terms “Appraisal Subcommittee” and “ASC” mean the Appraisal Subcommittee of the Federal Financial Institutions Examination Council.

(2) Title XI. The term “Title XI” means Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Pub. L 101-73, 103 Stat. 511 (1989) 12 U.S.C. 3310, 3331-3351).

(3) Federal financial institutions regulatory agencies. The term “Federal financial institutions regulatory agencies” means the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the National Credit Union Administration.

(4) ASC members. The term “ASC members” means those persons designated as representatives to the Appraisal Subcommittee pursuant to:

a) section 1011 of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3310), as added by section 1102 of Title XI and amended by section 1473(s) of the Dodd-Frank Act; and

b) the Department of Housing and Urban Development pursuant to 12 U.S.C. 1708(e)(2).

(5) Member agency. The term “member agency” means those agencies authorized to appoint designees to the Appraisal Subcommittee described in:

a) section 1011 of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3310), as added by section 1102 of Title XI and amended by section 1473(s) of the Dodd-Frank Act; and

b) the Department of Housing and Urban Development pursuant to 12 U.S.C. 1708(e)(2).

(6) Council. The term “Council” means the Federal Financial Institutions Examinations Council.

(7) Chairperson. The term “Chairperson” means the Chairperson of the Appraisal Subcommittee selected by the Council.

(8) Vice Chairperson. The term “Vice Chairperson” means the Vice Chairperson of the Appraisal Subcommittee serving as either the outgoing Chairperson, or selected by the Appraisal Subcommittee in accordance with section 3.04.a below.

(9) Secretary. The term “Secretary” means the Executive Director of the Appraisal Subcommittee of the Federal Financial Institutions Examination Council, or his/her designee. The Secretary may delegate the ministerial duties of Secretary to staff.

(10) Staff. The term “staff” means the office personnel of the Appraisal Subcommittee of the Federal Financial Institutions Examination Council.

(11) Meeting. The term “meeting” means the deliberations (including those conducted by conference telephone call, or by any other method) of at least four ASC members where such deliberations determine or result in the joint conduct or disposition of agency business. Meetings may be held in open session or closed session as authorized by law. (See sections 3.06 thru 3.09 below.)

(12) Open Session. The term “open session” means a properly noticed meeting, pursuant to section 3.07 below, of the ASC that is open to public observation. Members of the public are welcome to attend and observe, but are required to notify staff in advance in accordance with established policy.

(13) Closed Session. The term “closed session” means a properly noticed meeting, pursuant to section 3.07 below, of the ASC that is closed to attendance by ASC members only, and any other persons requested to be in attendance by the ASC members. The ASC may meet in closed session to discuss personnel matters, and/or to discuss Compliance Reviews prior to taking action on final Compliance Review Reports. The subject matter discussed in any closed session shall be described in the Federal Register notice of the meeting.

(14) Briefing. The term “briefing” typically means informal background discussions among ASC members and staff which clarify issues and expose varying views. A briefing is not a meeting, and as such, is not subject to notice or open session meeting provisions. Briefings may be called by the Chairperson, ASC members or staff. Briefings may be held by any means preferable to those attending. Summary notes shall be taken concerning matters discussed. Briefings may also include sessions with individuals from outside the agency where ASC members listen to a presentation and may elicit additional information.

(15) Notation Vote. The term “notation vote” means transaction of business, in accordance with section 3.13 below, by circulation of written items, when it has been determined that the business to be conducted is routine or noncontroversial.

(16) Federally related transaction. The term “federally related transaction” means any real estate-related financial transaction which—

(A) a Federal financial institutions regulatory agency engages in, contracts for, or regulates; and

(B) requires the services of an appraiser.

Section 1.03. ASC Functions.

The functions of the ASC are set forth in section 1103 of Title XI (12 U.S.C. 3332).

Section 1.04. Authority.

Except as otherwise provided in Title XI, all authority for carrying out the functions of the ASC shall reside in the ASC; however, from time to time, the ASC may delegate any of its authority as it deems appropriate to ASC members, officers, or employees pursuant to the ASC Delegations of Authority, or other documents, including, but not limited to, ASC regulations, Policy Statements, manuals, position descriptions, orders and certain instructions, or as otherwise authorized by law. As provided in section 1105 of Title XI (l2 U.S.C. 3334), the Chairperson of the ASC shall have authority to appoint such officers and staff as may be necessary to carry out the functions of the ASC.

Article 11

Assessments

Section 2.01. Assessments.

In accordance with section 1109 of Title XI (12 U.S.C. 3338), the ASC shall have the authority to receive an annual fee of not more than $40 from each State licensed or certified appraiser eligible to perform appraisals in federally related transactions. The fee may be modified up to a maximum of $80 per annum in accordance with section 1109 (a)(4)(A) of Title XI. At such time that section 1124 (a) and (e) of Title XI are implemented, thereby requiring payment of the annual registry fee by appraisal management companies, the ASC shall have the authority to receive an annual fee from each appraisal management company in accordance with section 1109 (a)(4)(B) of Title XI.

Article III

Organization and Operation of the ASC

Section 3.01. ASC Members.

The members of the ASC shall be those persons described in section 1102 of Title XI (12 U.S.C. 3310), and, pursuant to 12 U.S.C. 1708(e)(2), the Secretary (or designee) of the Department of Housing and Urban Development. (See section 1.02 (4)).

Section 3.02. General Powers.

The affairs, business and property of the ASC shall be managed by the Chairperson of the ASC pursuant to the ASC's direction and the ASC's powers shall include those set forth in section 1106 of Title XI (12 U.S.C. 3335). The Subcommittee does not have the authority to lease office space in its own name and must rely on the General Services Administration (GSA) for the procurement of office space by entering into an occupancy agreement with the GSA for space leased by the GSA.

Section 3.03. Compensation and Expenses of ASC Members.

Each ASC member shall serve on the ASC without compensation other than that received from their respective employing Federal agency; but each ASC member shall be entitled to an advance or reimbursement for reasonable expenses in carrying out their official duties as an ASC member. Such advance or reimbursement shall be made only upon written request accompanied by adequate documentation of such expenses.

Section 3.04. Chairperson of the ASC.

In accordance with section 1104(a) of Title XI (12 U.S.C. 3333(a), the Council shall elect a Chairperson of the ASC. The term of office of the Chairperson shall be for a two-year term. The Chairperson's term shall expire on March 31 every other year. The Chairperson shall carry out all duties required by Title XI and these Rules, and shall perform such other duties as from time to time may be assigned by the ASC.

Section 3.04.a Vice Chairperson of the ASC.

The outgoing Chairperson shall serve as the Vice Chairperson for a period of one year, with the term ending March 31. During the March meeting, the ASC shall vote upon a Vice Chairperson to serve for the next one-year term, which shall coincide with the 2nd year of the Chairperson's two-year term. It is anticipated that the Vice Chairperson could serve as the next Chairperson, if so elected by the Council. The Vice Chairperson shall assist the Chairperson as needed, and shall act on behalf of the ASC in the absence or incapacity of the Chairperson.

Section 3.05. ASC member Vacating Position in Respective Agency.

A person shall remain an ASC member of the ASC until that person resigns or is no longer employed by the designating agency, or until the agency head designates a replacement. If the vacating ASC member is Chairperson of the ASC, a succeeding Chairperson shall be selected by the Council under section 1104(a) of Title XI (12 U.S.C. 3333(a)).

Section 3.06. Organization of ASC Meetings.

(a) The Chairperson of the ASC shall preside at ASC meetings. In his or her absence, the Vice Chairperson shall preside at such ASC meeting.

(b) The ASC shall hold its meetings in public session, but may close certain portions of its meetings related to personnel matters, or to discuss Compliance Reviews prior to taking action on final Compliance Review Reports. The subject matter discussed in any closed or executive session shall be described in the Federal Register notice of the meeting.

(c) The Secretary shall draft and transmit the minutes of the meeting to each ASC member. The Secretary shall be responsible for recording the minutes, including the full text of each resolution voted on by the ASC and the substance of each action voted on by the ASC as well as the vote. The Secretary will be responsible for certifying or attesting to true copies of the minutes, or other documents, stating that actions were in fact taken by the ASC. The Secretary will also be responsible for maintaining and preserving at a single place, available for inspection at reasonable times by any ASC member or any person designated by any ASC member, the complete minutes of the proceedings of the ASC.

(d) Regular meetings of the ASC shall be held in Washington, DC, at a location designated by the Chairperson, or in such other place as the ASC may designate. Special meetings shall be held in such place and at such location as designated by the calling party or parties. Regular and special meetings shall be noticed as set forth in section 3.07(a) and (b) below.

(e) Regular meetings of the ASC shall be held at least monthly, unless not practicable, at the call of the Chairperson. Special meetings shall be held as provided in section 3.07(b) below.

Section 3.07. Notice of Meetings.

(a) The Secretary shall send a notice of each regular meeting, whether open session or closed session, to the Federal Register for publication at least seven (7) days prior to the date the regular meeting is to be held, and to each ASC member by facsimile or email at least seven (7) days prior to the date of the regular meeting. Every regular meeting notice shall specify the date, time, place and subject matter of the meeting.

(b) The Chairperson or any four (4) or more ASC members may call a special meeting, in which case, notice posting date, time, place and subject matter of the special meeting shall be published in the Federal Register and distributed to each ASC member as soon as practicable.

(c) A waiver of any meeting notice signed by an ASC member shall be the equivalent of timely receipt by that ASC member of notice. An ASC member's attendance at any meeting shall constitute waiver of notice of that meeting unless the ASC member attends solely for the purpose of objecting to the transaction of any business because the meeting was not lawfully called or convened.

Section 3.08. Quorum, Manner of Acting and Adjournment.

(a) At any regular or special meeting, the presence of a majority of the ASC members shall constitute a quorum for the transaction of business. For the purpose of the preceding sentence, an alternate will count only if he/she has been so designated in writing by the head of the respective member agency. The acts voted by a majority of ASC members present at such meeting shall be the acts of the ASC. An ASC member who is present at a meeting but who abstains from voting on any matter shall be counted for purposes of determining whether a quorum is present, whether that ASC member withdraws from or remains in the meeting during such vote. A majority of the ASC members present at any meeting, whether or not there is a quorum present, may adjourn the meeting. In transacting the business of the ASC, each ASC member shall be entitled to only one vote.

(b) No item shall be voted upon by the ASC except (1) where notice that the item will be on the agenda of a regular meeting has been given pursuant to section 3.07 above, (2) where written notice that the item will be on the agenda of any meeting is delivered to each ASC member at least two (2) full business days prior to the date of such meeting, or (3) upon the unanimous consent of all ASC members.

Section 3.09. Agenda of ASC Meetings.

(a) The agenda for meetings shall be determined by the Chairperson in consultation with the Secretary, or where appropriate by the four (4) or more ASC members calling the meeting; provided that the Chairperson shall include any item on the agenda when he/she receives a request in writing from any single ASC member at least three (3) full business days prior to the date of the meeting.

(b) Any ASC member may request during any regular or special meeting that an item be placed on the agenda of that meeting. The item shall be placed on the agenda for discussion but only if a majority of those present approve the request.

Section 3.10. Certain Interest of the ASC members.

No person serving as an officer or employee of the ASC shall be deemed to have an interest adverse to the interest of the ASC solely because that person is employed by a Federal agency and assigned to the ASC. No ASC member shall be required to abstain from voting on any matter solely because the Federal agency employing that member is or will be affected. No act of the ASC shall be subject to challenge, or in any way be affected by participation of said ASC member in such vote.

Section 3.11. Proxies.

A member agency may designate an alternate from his or her agency to carry out the ASC member's duties. Such alternate may act in all matters as an ASC member, except that he/she may not act as the presiding officer of an ASC meeting.

Section 3.12. Use of Conference Call Communications Equipment.

Any or all ASC members may participate in a meeting through the use of conference call telephone or similar communications equipment, by means of which all persons participating in the meeting can simultaneously speak and hear each other. Any ASC member so participating in the meeting shall be deemed to be present for all purposes. Actions taken by the ASC at meetings where one or more ASC members participate through the use of such equipment, including the votes of each ASC member, shall be recorded in the minutes of the meeting.

Section 3.13. Notation Vote: Transaction of Business by Circulation of Written Items.

Any other provision of these Rules to the contrary notwithstanding, business may be conducted by the ASC by the circulation of written items to all ASC members. The Secretary, in consultation with the Chairperson: (1) Shall determine whether items qualify for this expedited voting method because they are routine or noncontroversial; and (2) shall specify a deadline for the receipt of ASC members' responses. Qualifying items may be transmitted in paper or electronic format. The Secretary shall confirm each ASC member's actual receipt of items, and the response period shall be measured from the day of actual receipt. ASC members may vote in one of three ways: approve, disapprove or veto. The matter shall be approved or disapproved by a majority vote of the ASC members participating in the voting process, so long as the voting ASC members comprise a quorum, as generally defined in Section 3.08(a). A vote to veto will cause the matter to be placed on the agenda of the next scheduled ASC meeting, as governed by Section 3.09. The disposition of each written item circulated for vote, including the vote of each ASC member, shall be recorded in the minutes of the next meeting of the ASC following the date the notation vote closed.

Article IV

Officers and Employees

Section 4.01. Permanent Officers and Employees.

(a) Except as otherwise specifically directed by the ASC, its Chairperson shall have power to appoint and terminate such officers and employees as from time to time are deemed necessary to carry out the ASC's mission. Position descriptions will be written for all permanent personnel employed by the ASC. Procedures relative to the appointment, termination, and compensation practices of the ASC shall be consistent with the appointment and compensation practices of the Council, or in accord with the policies set forth in Title 5, United States Code and applicable OPM rules and regulations.

(b) The ASC may adopt from time to time such rules or regulations governing the conduct of officers and employees as it deems appropriate.

Section 4.02. Officers and Employees Detailed From Federal Agencies.

Any person in the employ of any Federal agency detailed to the ASC shall be considered an officer or employee of the ASC. Such persons shall be assigned to and serve the ASC for a designated, but renewable, period of time, and salaries and benefits received by such officers or employees shall be paid to them by the agency from which that officer or employee is assigned. All salaries and benefits received by such officers and employees shall be reimbursed by the ASC to the detailee's home agency. Each Federal agency will apply its own rules, regulations, and policies to the circumstances under which officers or employees assigned to the ASC may resume their duties at that agency upon termination of assignment to the ASC.

Article V

Fiscal Year

Section 5.01. Fiscal Year.

The ASC budget shall be prepared on the basis of a fiscal year ending on September 30th.

Article VI

Amendments

Section 6.01. Amendments. Unless specifically stated herein, any of these Rules may be altered, amended or repealed, or new Rules may be adopted at any meeting, regular or special, of the ASC by the affirmative act of a majority of all ASC members, so long as such action is consistent with the requirements of applicable law. Amendments to these Rules shall not be given retroactive effect.

Article VII

Public Information

Section 7.01. Freedom of Information Act.

The Freedom of Information Act (FOIA) is a Federal law that gives the public the right to make requests for Federal agency records. All Federal agencies are required to make requested records available unless the records are protected from disclosure by certain FOIA exemptions. The ASC has adopted regulations (12 CFR 1102). Subpart D of the regulations implements FOIA and describes the procedures for persons to request documents from the ASC. This information is also available on the ASC website at www.asc.gov.

Section 7.02. Public Statements and Statements to the Press.

No written statements shall be made to the press expressing the ASC's policy or descriptive of its action except as authorized by the ASC. Such statements shall be issued, when authorized and approved, through the office of the Executive Director as delegated by the Chairperson. Where an individual ASC member is responding on issues pending before the ASC, that ASC member should use best efforts to alert other ASC members and the Secretary concerning the substance of the response as soon as possible.

Section 7.03. Disclaimer.

Except when otherwise authorized by the ASC, individual ASC members, officers and employees shall include in written statements and oral presentations the following disclaimer of responsibility:

The Appraisal Subcommittee, as a matter of policy, disclaims responsibility for any private publication or statement by any of its Subcommittee members, officers, or employees. The views expressed herein are those of the author and do not necessarily reflect the views of the Subcommittee.

The wording of the disclaimer may vary with the circumstances so long as its substance is clearly communicated. Any written statement or oral presentation which reflects Subcommittee positions must set forth those positions accurately and, if it contains differences with Subcommittee positions, it should clearly state that such positions are solely those of the author.

Article VIII

Advisory Committee

Section 8.01. Appointment of an Advisory Group.

Subject to the Federal Advisory Committee Act (5 U.S.C. App. 1-14) and to such procedures as it may from time to time adopt, the ASC may establish nonvoting advisory group(s). Such advisory group(s) shall meet with the ASC on a schedule determined by the ASC. Members of the advisory group(s) may receive from the ASC an allowance, in an amount to be determined by the ASC, for necessary expenses incurred in attending such meetings.

Article IX

Administrative Support

Section 9.01. Service of Administrative Support.

(a) To insure that the orderly administration of the affairs of the ASC is accomplished, administrative support functions shall be provided by the permanent staff of the ASC with assistance, when needed, from staff of the member agencies.

(b) The Chairperson shall have the authority to negotiate and execute agreements regarding personnel, payroll, grant administration, procurement, and other services, consistent with directives of the ASC. In executing this authority, the Chairperson shall be authorized to obtain such administrative support services as he/she deems necessary.

Article X

Report to Congress

Section 10.01. Annual Report to Congress.

In accordance with section 1103 of Title XI (12 U.S.C. 3332), the ASC shall transmit an annual report to Congress not later than June 15 of each year that describes the manner in which each function assigned to the Appraisal Subcommittee has been carried out during the preceding year. The report shall also detail the activities of the Appraisal Subcommittee, including the results of Compliance Reviews of State appraiser regulatory agencies, and provide an accounting of disapproved actions and warnings taken in the previous year, including a description of the conditions causing the disapproval and actions taken to achieve compliance.

Section 10.02. Preparation of Reports.

The Executive Director or other party as designated by the ASC is directed to prepare in a timely fashion, for review and approval by the ASC, the annual report and such other documents concerning the activities or decisions or recommendations of the ASC as is required by law or requested by the Congress or any other party.

Article XI

Conduct

Section 11.01. Ethics Provision.

The ASC members of the ASC and its officers and employees shall be required to abide by a code of ethics, consistent with applicable law.

* * * * *

By the Appraisal Subcommittee.

Dated: December 17, 2010.

Deborah S. Merkle,

Chairman.