A proposed rule to implement a relief law exemption from real estate appraisal requirements for certain residential real estate transactions involving $400,000 or less will be issued jointly by three federal banking regulators for a 60-day public comment period, two of the three agencies said Thursday.
The notice of proposed rulemaking is being issued jointly by the Federal Deposit Insurance Corp. (FDIC), Office of the Comptroller of the Currency (OCC), and Federal Reserve Board. FDIC and OCC announced the proposal Thursday.
This proposal responds to concerns raised by financial institutions about the time and cost associated with completing residential real estate transactions. The agencies say the threshold increase from $250,000 (in place since 1994) could provide meaningful relief without posing a threat to institutions’ safety and soundness.
The proposal also would incorporate the rural residential appraisal exemption in the Economic Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA, S. 2155) into the list of exempt transactions and require evaluations for these exempt transactions. In addition, the proposal would require institutions to appropriately review appraisals for compliance with the Uniform Standards of Professional Appraisal Practice, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The EGRRCPA-created exemption is also included in a proposal issued in October by the National Credit Union Administration (NCUA); comments are due on the NCUA proposed rule by Dec. 3.