Appraisal Management Company Registration: Are You Aware?
Have you heard about the new registration requirements for Appraisal Management Companies? Effective August 10, 2019 all appraisal management companies (AMC) must register with the state or states in which they perform business and are subject to state supervision, if they oversee a panel of more than 15 appraisers in a single state or 25 or more appraisers nationally in a given year. AMCs are entities that serve as intermediaries between appraisers and banks. States are not required to establish registration and supervision programs for AMCs. If the state you operate in does not have a registration or supervision program, AMCs are prohibited from providing appraisal management services for covered federally related transactions (FRTs) unless they are subject to oversight by a federal financial institution’s regulatory agency.
Community banks engaged with AMCs should ensure the following:
- Perform third-party risk management due diligence to ensure your associated AMC has registered with the respective state(s) in which they perform business.
- Seek out other options if an appraisal is needed for covered federally related transactions (FRTs) in the event a state is not registering AMCs.
- Utilize an individual appraiser
- Utilize a staff appraiser employed by the bank.
- Utilize a smaller AMC (not subject to registration based on number of appraisers in a single state or nationally in a year)
- Utilize a federally regulated AMC.
- Review the Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council’s national AMC registry or state’s AMC registry to determine whether the AMC your financial institution utilizes is listed.
Based on the above, ensure policies and vendor management procedures are updated to ensure the AMC’s are compliant.
Article prepared by Evelyn Dehmey, for additional information email firstname.lastname@example.org.