The Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC) is adopting a final rule to amend rules of practice and procedure governing temporary waiver proceedings which were promulgated in 1992 pursuant to Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as amended (Title XI), according to a release from the Federal Register.

The final rule on Temporary Waiver Requests was published in the Federal Register on Oct. 7 and will be effective on Dec. 6. 

For some background, the purpose of Title XI 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 [FRTs] 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.”

As directed by Title XI, the federal financial institutions regulatory agencies’ appraisal regulations require appraisals for FRTs to meet minimum appraisal standards as evidenced by the Uniform Standards of Professional Appraisal Practice (USPAP) promulgated by the Appraisal Standards Board (ASB) of The Appraisal Foundation.

Title XI also requires that certified and licensed appraisers meet the minimum qualification criteria as set forth in The Real Property Appraiser Qualification Criteria (AQB Criteria) issued by the Appraiser Qualifications Board (AQB) of The Appraisal Foundation. The state appraiser regulatory agencies enforce these federal minimum requirements for credentialed appraisers in their respective states and are subject to federal oversight by the ASC.

Section 1119(b) of Title XI authorizes the ASC to waive, on a temporary basis, subject to approval of the FFIEC, any requirement relating to certification or licensing of a person to perform appraisals under Title XI if the ASC or a state appraiser regulatory agency makes a written determination that there is a scarcity of certified or licensed appraisers to perform appraisals in connection with FRTs in a state, or in any geographical political subdivision of a state, leading to significant delays in the performance of such appraisals. A waiver terminates when the ASC determines that such significant delays have been eliminated.

Congress intended that the ASC exercise this waiver authority “cautiously.”

For the reasons discussed in section III, the final rule adopts and amends the rules of practice and procedure substantially as proposed, with the following modifications:

• Definition of “petition” to include state financial institutions regulatory agencies as potential petitioners; and
• Clarification that either a mandatory or discretionary waiver termination requires publication in the Federal Register, and that a discretionary waiver termination requires such publication with a 30-day comment period.