CONSUMER MORTGAGE COALITION

INDEPENDENT COMMUNITY BANKERS of AMERICA

November 29, 2012

James R. Park

Executive Director

Appraisal Subcommittee of the 

Federal Financial Institutions Examination Council

1401 H Street N.W., Suite 760

Washington, D.C. 20005

Re: Proposed Policy Statement Amendments

Docket No. AS12-16

Dear Mr. Park:

The undersigned trade associations appreciate the opportunity to comment on the 

Appraisal Subcommittee’s (“ASC”) proposed amendments to its Policy Statements, 

which would implement some amendments the Dodd-Frank Wall Street Reform and 

Consumer Protection Act (the “Dodd-Frank Act”) made to the Financial Institutions 

Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”). The proposal would also 

reflect the ASC’s implementation of its revised Compliance Review process in 2009.

At the outset, we appreciate the ASC’s extension of the public comment period. The 

mortgage industry has been submitting a large number of comment letters in the past 

several weeks, some of which were complex and lengthy. The extension enabled us to 

submit more meaningful comments both to the ASC and in the many mortgage

rulemakings.

The Dodd-Frank Act amended FIRREA, in part, to require the Appraisal Subcommittee 

to monitor each State appraiser certifying and licensing agency to determine whether the 

agency’s policies, practices, and procedures are consistent with the purposes of 

maintaining appraiser independence, and whether the State has adopted and maintains 

effective laws, regulations, and policies aimed at maintaining appraiser independence.1 

The Proposed Policy Statements are designed to support the ASC’s important role in 

maintaining appraisal independence and quality, and we generally support them. We do 

comment on the reciprocity aspects of the proposal, and suggest a technical clarification.

Reciprocity Should Be Based on Compliance with ASC Requirements

Congress required reciprocity to be available, consistent with appraisal quality. The 

Dodd-Frank Act requires states to adopt reciprocity policies, as follows:

 1 12 U.S.C. § 3351(g).
2

“a federally related transaction shall not be appraised by a certified or licensed 

appraiser unless the State appraiser certifying or licensing agency of the State 

certifying or licensing such appraiser has in place a policy of issuing a reciprocal 

certification or license for an individual from another State when—

(1) the appraiser licensing and certification program of such other State is in 

compliance with the provisions of this title; and

(2) the appraiser holds a valid certification from a State whose requirements for 

certification or licensing meet or exceed the licensure standards established by the 

State where an individual seeks appraisal licensure.”2

Proposed Policy Statement 5 would have States make the determinations of whether one 

State’s requirements meet or exceed those of another State. It is not clear how States 

could do this accurately and in a timely manner. It also would permit States to deny 

reciprocity to an appraiser from a State that is in full compliance with all ASC 

requirements, which would interfere with the purpose of reciprocity. We suggest that 

reciprocity should be permitted to appraisers credentialed in a state that is in compliance 

with ASC requirements. Alternatively, we recommend that the ASC make the “meet or 

exceed” determinations and maintain a current list on which States and lenders could rely. 

Review Appraisers Should Not Need to be Credentialed in the State Where the Property 

is Located

Existing Policy Statement 5 provides:

Finally, some State agencies have sought to require that an appraiser register for 

temporary practice if the appraiser is certified or licensed in another State, 

performs a technical review of an appraisal in that other State and changes, or is 

authorized to change, a value in the appraisal. The ASC, however, has concluded 

that for federally related transactions the review appraiser need not register for 

temporary practice or otherwise be subjected to the regulatory jurisdiction of the 

State agency in which the appraisal was performed, so long as the review 

appraiser does not perform the technical review in the State within which the 

property is located.

The Proposed Policy Statements do not contain similar language. The ASC explains that

this language is “outdated and unnecessary.”3 The Proposed Policy Statements do not 

appear to apply their reciprocity provisions to review appraisers. The result appears to be 

that review appraisers would need to be credentialed in the state where the property is 

located in all instances. We believe this is unnecessary and that it would increase costs to 

consumers without a benefit. 

 2 12 U.S.C. § 3351(b). 3 77 Fed. Reg. 52721, 52723 (August 30, 2012).
3

Any appraisal review occurs only after a properly credentialed appraiser performs the 

actual appraisal. Requiring the appraisal to be performed, not reviewed, by a qualified 

appraiser is the purpose of FIRREA’s appraisal requirements:

“The purpose of this chapter is to provide that Federal financial and public policy 

interests in real estate related transactions will be protected by requiring that real 

estate appraisals utilized in connection with federally related transactions 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

An appraisal performed by a properly qualified appraiser meets this purpose. Requiring 

any person who reviews the appraisal to meet the requirements of the state where the 

property is located would be excessive. This would mean lenders would need to employ 

additional appraisers from more states, or would need to retain them on a loan-by-loan 

basis and pass the appraisers’ charges through to consumers. 

We urge clarification that a review appraiser does not need to be credentialed in the state 

where a property is located, as long as the review appraiser is properly credentialed in the 

state where the review occurs. The actual appraiser would meet the state’s requirements.

Alternatively, we recommend that review appraisers who are employed by financial 

institutions regulated by one of the FFIEC member agencies be per se qualified to 

perform appraisal reviews.

Technical Clarification Request

The Dodd-Frank Act limited the definition of “State licensed appraiser” to appraisers 

licensed in a state whose licensing criteria meet or exceed the minimum criteria issued by 

the Appraisal Qualifications Board (“AQB”) of The Appraisal Foundation for licensing 

real estate appraisers.5 Proposed Policy Statement 3 states:

Only AQB-compliant certified appraisers in active status on the National Registry 

are eligible to perform appraisals in connection with federally related transactions.

In order for a licensed appraiser to be listed on the National Registry as AQBcompliant, that individual must satisfy requirements for licensing in a State whose 

criteria meet or exceed AQB Criteria. Beginning July 1, 2013, only AQBcompliant licensed appraisers in active status on the National Registry are eligible 

to perform appraisals in connection with federally related transactions.6

The first and last quoted sentences seem to contradict each other, first stating that only 

certified appraisers may appraise properties in federally-related transactions, then that 

only licensed appraisers may do so. The apparent intent is to clarify that, beginning July 

 4 12 U.S.C. § 3331. 5 12 U.S.C. § 3345(c). 6 77 Fed. Reg. 52721, 52727-28 (August 30, 2012).
4

1, 2013, trainee appraisers and apprentice appraisers that are not licensed may not 

perform appraisals for federally-related transactions. It might be clearer to say that 

directly.

Conclusion

We appreciate the ASC’s consideration of our comments. We suggest that the final 

Policy Statements support reciprocity.

Sincerely,

Consumer Mortgage Coalition

Independent Community Bankers of America