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BOARD OF GOVERNORS

OF THE

FEDERAL RESERVE SYSTEM

WASHINGTON, D.C. 20551

DIVISION OF SUPERVISION 

AND REGULATION

SR 17-4 

June 1, 2017 

TO THE OFFICER IN CHARGE OF SUPERVISION

AT EACH FEDERAL RESERVE BANK 

SUBJECT: Interagency Advisory on the Availability of Appraisers

Applicability to Community Banking Organizations: This guidance applies to state member 

banks and bank holding companies and their nonbank subsidiaries, including those with $10 

billion or less in consolidated assets.

The federal banking agencies1 completed a review of their respective regulations, 

including their appraisal regulations, pursuant to the Economic Growth and Regulatory 

Paperwork Reduction Act (EGRPRA). In the review process, bankers raised concerns regarding 

the timeliness of appraisals due largely to what they believe to be problems with the availability 

of state certified and licensed appraisers, particularly in rural areas. Therefore, the federal 

banking agencies, jointly with the National Credit Union Administration, have issued an 

advisory to inform insured depository institutions and bank holding companies of two existing 

methods that may address appraiser shortages: temporary practice permits and temporary 

waivers. 

• Temporary practice permits issued by state appraiser regulatory agencies allow state 

certified and licensed appraisers to temporarily provide their services in states where they 

are not certified or licensed, including those experiencing a shortage of appraisers, 

subject to limitations in states’ laws. Further, state appraiser regulatory agencies offer 

reciprocity, which allows one state to recognize the appraiser certification or licensing of 

another state and, thus, permits state certified and licensed appraisers to perform their 

services across state lines.2

 

1 The federal banking agencies are the Board of Governors of the Federal Reserve System (Board), the Federal 

Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

2 See Appraisal Subcommittee of the Federal Financial Institution Examination Council, Policy Statements, June 1, 

2013, at https://www.asc.gov/Documents/PolicyStatements/ASC%20Policy%20Statements%2006.01.13.pdf. (See

Policy Statement 5.)
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• Temporary waivers may be issued by the Appraisal Subcommittee of the Federal 

Financial Institution Examination Council that waive requirements relating to the 

certification or licensing of individuals to perform appraisals under Title XI of the 

Financial Institutions Reform, Recovery, and Enforcement Act3 in states or geographic 

political subdivisions when certain conditions are met. 

Reserve Banks should distribute this letter to state member banks and bank holding 

companies, as well as to appropriate supervisory and examination staff. For questions related to 

this guidance, please contact the following staff in the Board’s Risk Policy Section: Carmen 

Holly, Senior Supervisory Financial Analyst, at (202) 973-6122; or Peter Clifford, Manager, at 

(202) 785-6057. In addition, questions may be sent via the Board’s public website.4

Michael S. Gibson 

Director

Attachment

• Interagency Advisory on the Availability of Appraisers 

 

3 12 U.S.C. 3348(b).

4 See http://www.federalreserve.gov/apps/contactus/feedback.aspx. 
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Board of Governors of the Federal Reserve System

Federal Deposit Insurance Corporation

National Credit Union Administration

 Office of the Comptroller of the Currency 

Interagency Advisory on the Availability of Appraisers

May 31, 2017

In comments received by the federal bank regulatory agencies1 (collectively, the agencies)

pursuant to the agencies’ review of regulations under the Economic Growth and Regulatory

Paperwork Reduction Act (EGRPRA),2 representatives from the financial industry raised

concerns regarding the timeliness of appraisals due largely to what they believe to be problems 

with the availability of state certified and licensed appraisers, particularly in rural areas. The

agencies, jointly with the National Credit Union Administration, are providing this advisory to

apprise insured depository institutions and bank holding companies (collectively, regulated

institutions) of two existing options that may address appraiser shortages, particularly in rural

areas: temporary practice permits and temporary waivers.

Temporary Practice Permits

Section 1122(a) of Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act

of 1989 (Title XI)3 requires a state appraiser certifying or licensing agency to recognize the 

certification or license of an appraiser issued by another state on a temporary basis for federally

related transactions (FRT).4 Subject to limitations in states’ laws, temporary practice permits

could allow state certified or licensed appraisers to provide their services in states where they are

not certified or licensed, including those experiencing a shortage of appraisers.

Appraisers must apply to the relevant state appraiser regulatory agency for a temporary practice

permit.5 Section 1122 of Title XI prohibits a state appraiser certifying or licensing agency from

imposing excessive fees or burdensome requirements for a temporary practice permit. 

1 The federal bank regulatory agencies include the Board of Governors of the Federal Reserve System (Board), the Federal

Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).

2 Pub. L. No. 104-208, 110 Stat. 301. The agencies recently completed a review of their respective regulations

pursuant to the EGRPRA, including their appraisal regulations, to evaluate whether the regulations are outdated,

unnecessary, or unduly burdensome, and to consider how to reduce regulatory burden on institutions regulated by the

agencies while, at the same time, ensuring their safety and soundness and the safety and soundness of the 

financial system. Written comments were solicited through four Federal Register notices. Additionally, comments

were received at six outreach events the bank regulatory agencies held in various regions of the country. This

advisory is responding to specific questions that have been raised about appraisals as part of the agencies’

EGRPRA outreach process. See transcripts at http://egrpra.ffiec.gov/outreach/outreach-index.html.

3 Pub. L. No. 101-73, 103 Stat. 183 (codified at 12 U.S.C. 3331 et seq.).

4 12 U.S.C. 3351(a).

5 Referto https://www.asc.gov/State-Appraiser-Regulatory-Programs/TemporaryPracticeAndReciprocity.aspx for

contact information for State appraiser regulatory agencies.
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In addition, reciprocity6 is a widely used practice in which one state recognizes the appraiser 

certification and licensing of another state, permitting state certified and licensed appraisers to 

perform appraisals across state lines. 

Temporary Waivers

Section 1119 of Title XI authorizes the Appraisal Subcommittee (ASC), after making certain

findings and with the approval of the FFIEC, to grant temporary waivers of any requirement 

relating to certification or licensing of individuals to perform appraisals under Title XI in states

or geographic political subdivisions of any states where there is a shortage of appraisers leading

to significant delays in obtaining appraisals in connection with FRTs.7 These temporary waivers

may provide regulated institutions lending in affected areas with access to more individuals 

eligible to complete the appraisals required under Title XI, which may help alleviate some of the 

cost and burden associated with having a shortage of state certified or licensed appraisers in

affected areas.

The ASC has issued regulations8 governing the processing of temporary waiver requests.

Requests can be submitted by any of the following: 

• A state appraiser certifying or licensing agency.

• A federal bank regulatory agency.

• A regulated financial institution or credit union. 

• Other persons or institutions with a demonstrable interest in appraiser regulation.

The requesting party must provide evidence of the shortage of appraisers in a geographic area

and must demonstrate that the scarcity of appraisers has led to significant delays in the 

performance of appraisals on FRTs in that area. While an individual regulated institution may

submit a request, the waiver request would apply to the affected geographic area. If granted, the 

requirement to use a certified or licensed appraiser on FRTs would be waived for all regulated

institutions engaging in FRTs in the affected geographic area, regardless of who initially

requested the waiver.

After receiving a waiver request, the ASC’s regulations specify issuing a public notice in the 

Federal Register requesting comment on the proposed waiver. Within 15 days of the close of 

the 30-day comment period, the ASC is required to issue a decision on the request for a 

temporary waiver. The ASC’s decision is subject to approval by the FFIEC. The agencies have 

representatives on the ASC board, are FFIEC members, and will work with the ASC to

streamline the process for evaluating temporary waiver requests.

6 Appraisal Subcommittee (ASC) of the Federal Financial Institution Examination Council (FFIEC), Policy

Statements, June 1, 2013, at

https://www.asc.gov/Documents/PolicyStatements/ASC%20Policy%20Statements%2006.01.13.pdf. (SeePolicy

Statement 5.)

7 12 U.S.C. 3348(b).

8 12 CFR part 1102, subpart A.
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After receiving FFIEC approval to grant a waiver request, the ASC will issue an order specifying

the time period during which the waiver will be in effect. The ASC can extend the waiver upon 

petition from an interested party and approval by the FFIEC after notice and comment. In the 

event an appraiser shortage abates before the end of the waiver period, the ASC has the 

discretion to terminate the waiver before its expiration. 

The agencies’ appraisal regulations9 require regulated institutions to obtain appraisals for FRTs

unless an exemption applies. Such appraisals must meet five criteria. One criterion requires that

the appraisal be performed by a state certified or licensed appraiser. If the ASC grants a waiver

from the certification and licensing requirement, then regulated institutions will not be required

to obtain appraisals by state certified or licensed appraisers on FRTs originated in the designated

area for the duration of the waiver period. However, the remaining appraisal criteria must still be

met for the appraisal to comply with Title XI.10

9 12 CFR part 208, subpart E (Regulation H) and 12 CFR part 225, subpart G (Regulation Y) (Board); 12 CFR part

34, subpart C (OCC); 12 CFR part 323 (FDIC); and 12 CFR part 722 (NCUA).

10 As described in the Interagency Appraisal and Evaluation Guidelines, persons qualified to perform appraisals

should possess the appropriate appraisal or collateral valuation education, expertise and experience relevant to the

type of property being valued. 75 Fed. Reg. 77450 (December 10, 2010).