OCC reminds banks to use only registered appraisal management companies (AMCs)

Information on appraisal management company (AMC) registration requirements, and how banks can satisfy real estate appraisal requirements if no state-supervised AMC is available, is provided in a bulletin issued Monday by the Office of the Comptroller of the Currency (OCC).

As of Aug. 10, the agency noted, AMCs must register with the state or states in which they do business and must be subject to state supervision. “Federal law bars AMCs from providing appraisal management services to financial institutions for consumer credit transactions secured by a consumer’s principal dwelling that are federally related transactions (covered FRT) if the AMCs are not registered as required,” according to Bulletin 2019-43.

The bulletin details the AMC registration requirements as well as how a bank can verify registration of an AMC and how to obtain services if a state-supervised AMC is not available.

The AMC registration requirement, established under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), applies to AMCs that oversee a panel of more than 15 appraisers in a single state or 25 or more appraisers nationally in a given year. (It does not apply to an AMC that is owned and controlled by a federally regulated and insured depository institution.) The Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC) is required to maintain an AMC national registry; some states also have their own registries.

Banks can check the national registry (which the ASC website shows covers only a handful of states currently) as well as individual state registries to find whether a particular AMC is registered. In some cases, the OCC says, bank management may need to call the state agency. (The ASC’s website has links to state agencies.) Banks can also request proof of registration directly from the AMC.

If the transaction is a covered, federally related transaction in a state that is not registering AMCs, banks may use one of the following for appraisal services:

  • An individual appraiser.
  • A staff appraiser employed by the bank.
  • A smaller AMC that has a panel with fewer than 15 appraisers in any state and fewer than 25 appraisers nationally in a given year.
  • A federally regulated AMC.

The bulletin also points to other OCC information regarding third-party risk management applicable to AMCs.

OCC Bulletin 2019-43