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1 property shall reflect the taxable assessed value
2 of the real property securing the transaction
3 after the consummation of the transaction, in-
4 cluding the value of any improvements on the
5 property or to be constructed on the property
6 (whether or not such construction will be fi-
7 nanced from the proceeds of the transaction), if
8 known, and the replacement costs of the prop-
9 erty for hazard insurance, in the initial year
10 after the transaction.’’.
11 Subtitle F—Appraisal Activities
12 SEC. 1471. PROPERTY APPRAISAL REQUIREMENTS.

13 Chapter 2 of the Truth in Lending Act (15 U.S.C.

14 1631 et seq.) is amended by inserting after 129G (as
15 added by section 1464(b)) the following new section:
16 ‘‘§ 129H. Property appraisal requirements
17 ‘‘(a) IN GENERAL.—A creditor may not extend credit
18 in the form of a higher-risk mortgage to any consumer
19 without first obtaining a written appraisal of the property
20 to be mortgaged prepared in accordance with the require-
21 ments of this section.
22 ‘‘(b) APPRAISAL REQUIREMENTS.—
23 ‘‘(1) PHYSICAL PROPERTY VISIT.—Subject to
24 the rules prescribed under paragraph (4), an ap-
25 praisal of property to be secured by a higher-risk
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2202
1 mortgage does not meet the requirement of this sec-
2 tion unless it is performed by a certified or licensed
3 appraiser who conducts a physical property visit of
4 the interior of the mortgaged property.
5 ‘‘(2) SECOND APPRAISAL UNDER CERTAIN CIR-

6 CUMSTANCES.—

7 ‘‘(A) IN GENERAL.—If the purpose of a

8 higher-risk mortgage is to finance the purchase
9 or acquisition of the mortgaged property from
10 a person within 180 days of the purchase or ac-
11 quisition of such property by that person at a
12 price that was lower than the current sale price
13 of the property, the creditor shall obtain a sec-
14 ond appraisal from a different certified or li-
15 censed appraiser. The second appraisal shall in-
16 clude an analysis of the difference in sale
17 prices, changes in market conditions, and any
18 improvements made to the property between the
19 date of the previous sale and the current sale.
20 ‘‘(B) NO COST TO APPLICANT.—The cost
21 of any second appraisal required under sub-
22 paragraph (A) may not be charged to the appli-
23 cant.
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2203
1 ‘‘(3) CERTIFIED OR LICENSED APPRAISER DE-

2 FINED.—For purposes of this section, the term ‘cer-

3 tified or licensed appraiser’ means a person who—
4 ‘‘(A) is, at a minimum, certified or licensed
5 by the State in which the property to be ap-
6 praised is located; and
7 ‘‘(B) performs each appraisal in con-
8 formity with the Uniform Standards of Profes-
9 sional Appraisal Practice and title XI of the Fi-
10 nancial Institutions Reform, Recovery, and En-
11 forcement Act of 1989, and the regulations pre-
12 scribed under such title, as in effect on the date
13 of the appraisal.
14 ‘‘(4) REGULATIONS.—
15 ‘‘(A) IN GENERAL.—The Board, the
16 Comptroller of the Currency, the Federal De-
17 posit Insurance Corporation, the National Cred-
18 it Union Administration Board, the Federal
19 Housing Finance Agency, and the Bureau shall
20 jointly prescribe regulations to implement this
21 section.
22 ‘‘(B) EXEMPTION.—The agencies listed in
23 subparagraph (A) may jointly exempt, by rule,
24 a class of loans from the requirements of this
25 subsection or subsection (a) if the agencies de-
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2204
1 termine that the exemption is in the public in-
2 terest and promotes the safety and soundness
3 of creditors.
4 ‘‘(c) FREE COPY OF APPRAISAL.—A creditor shall
5 provide 1 copy of each appraisal conducted in accordance
6 with this section in connection with a higher-risk mortgage
7 to the applicant without charge, and at least 3 days prior
8 to the transaction closing date.
9 ‘‘(d) CONSUMER NOTIFICATION.—At the time of the
10 initial mortgage application, the applicant shall be pro-
11 vided with a statement by the creditor that any appraisal
12 prepared for the mortgage is for the sole use of the cred-
13 itor, and that the applicant may choose to have a separate
14 appraisal conducted at the expense of the applicant.
15 ‘‘(e) VIOLATIONS.—In addition to any other liability
16 to any person under this title, a creditor found to have
17 willfully failed to obtain an appraisal as required in this
18 section shall be liable to the applicant or borrower for the
19 sum of $2,000.
20 ‘‘(f) HIGHER-RISK MORTGAGE DEFINED.—For pur-
21 poses of this section, the term ‘higher-risk mortgage’
22 means a residential mortgage loan, other than a reverse
23 mortgage loan that is a qualified mortgage, as defined in
24 section 129C, secured by a principal dwelling—
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2205
1 ‘‘(1) that is not a qualified mortgage, as de-
2 fined in section 129C; and
3 ‘‘(2) with an annual percentage rate that ex-
4 ceeds the average prime offer rate for a comparable
5 transaction, as defined in section 129C, as of the
6 date the interest rate is set—
7 ‘‘(A) by 1.5 or more percentage points, in
8 the case of a first lien residential mortgage loan
9 having an original principal obligation amount
10 that does not exceed the amount of the max-
11 imum limitation on the original principal obliga-
12 tion of mortgage in effect for a residence of the
13 applicable size, as of the date of such interest
14 rate set, pursuant to the sixth sentence of sec-
15 tion 305(a)(2) the Federal Home Loan Mort-
16 gage Corporation Act (12 U.S.C. 1454(a)(2));
17 ‘‘(B) by 2.5 or more percentage points, in
18 the case of a first lien residential mortgage loan
19 having an original principal obligation amount
20 that exceeds the amount of the maximum limi-
21 tation on the original principal obligation of
22 mortgage in effect for a residence of the appli-
23 cable size, as of the date of such interest rate
24 set, pursuant to the sixth sentence of section
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2206
1 305(a)(2) the Federal Home Loan Mortgage
2 Corporation Act (12 U.S.C. 1454(a)(2)); and
3 ‘‘(C) by 3.5 or more percentage points for
4 a subordinate lien residential mortgage loan.’’.
5 SEC. 1472. APPRAISAL INDEPENDENCE REQUIREMENTS.

6 (a) IN GENERAL.—Chapter 2 of the Truth in Lend-

7 ing Act (15 U.S.C. 1631 et seq.) is amended by inserting
8 after section 129D (as added by section 1461(a)) the fol-
9 lowing new section:
10 ‘‘§ 129E. Appraisal independence requirements
11 ‘‘(a) IN GENERAL.—It shall be unlawful, in extending
12 credit or in providing any services for a consumer credit
13 transaction secured by the principal dwelling of the con-
14 sumer, to engage in any act or practice that violates ap-
15 praisal independence as described in or pursuant to regu-
16 lations prescribed under this section.
17 ‘‘(b) APPRAISAL INDEPENDENCE.—For purposes of
18 subsection (a), acts or practices that violate appraisal
19 independence shall include—
20 ‘‘(1) any appraisal of a property offered as se-
21 curity for repayment of the consumer credit trans-
22 action that is conducted in connection with such
23 transaction in which a person with an interest in the
24 underlying transaction compensates, coerces, extorts,
25 colludes, instructs, induces, bribes, or intimidates a
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2207
1 person, appraisal management company, firm, or
2 other entity conducting or involved in an appraisal,
3 or attempts, to compensate, coerce, extort, collude,
4 instruct, induce, bribe, or intimidate such a person,
5 for the purpose of causing the appraised value as-
6 signed, under the appraisal, to the property to be
7 based on any factor other than the independent
8 judgment of the appraiser;
9 ‘‘(2) mischaracterizing, or suborning any
10 mischaracterization of, the appraised value of the
11 property securing the extension of the credit;
12 ‘‘(3) seeking to influence an appraiser or other-
13 wise to encourage a targeted value in order to facili-
14 tate the making or pricing of the transaction; and
15 ‘‘(4) withholding or threatening to withhold
16 timely payment for an appraisal report or for ap-
17 praisal services rendered when the appraisal report
18 or services are provided for in accordance with the
19 contract between the parties.
20 ‘‘(c) EXCEPTIONS.—The requirements of subsection
21 (b) shall not be construed as prohibiting a mortgage lend-
22 er, mortgage broker, mortgage banker, real estate broker,
23 appraisal management company, employee of an appraisal
24 management company, consumer, or any other person
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2208
1 with an interest in a real estate transaction from asking
2 an appraiser to undertake 1 or more of the following:
3 ‘‘(1) Consider additional, appropriate property
4 information, including the consideration of addi-
5 tional comparable properties to make or support an
6 appraisal.
7 ‘‘(2) Provide further detail, substantiation, or
8 explanation for the appraiser’s value conclusion.
9 ‘‘(3) Correct errors in the appraisal report.
10 ‘‘(d) PROHIBITIONS ON CONFLICTS OF INTEREST.—
11 No certified or licensed appraiser conducting, and no ap-
12 praisal management company procuring or facilitating, an
13 appraisal in connection with a consumer credit transaction
14 secured by the principal dwelling of a consumer may have
15 a direct or indirect interest, financial or otherwise, in the
16 property or transaction involving the appraisal.
17 ‘‘(e) MANDATORY REPORTING.—Any mortgage lend-
18 er, mortgage broker, mortgage banker, real estate broker,
19 appraisal management company, employee of an appraisal
20 management company, or any other person involved in a
21 real estate transaction involving an appraisal in connection
22 with a consumer credit transaction secured by the prin-
23 cipal dwelling of a consumer who has a reasonable basis
24 to believe an appraiser is failing to comply with the Uni-
25 form Standards of Professional Appraisal Practice, is vio-
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2209
1 lating applicable laws, or is otherwise engaging in uneth-
2 ical or unprofessional conduct, shall refer the matter to
3 the applicable State appraiser certifying and licensing
4 agency.
5 ‘‘(f) NO EXTENSION OF CREDIT.—In connection with
6 a consumer credit transaction secured by a consumer’s
7 principal dwelling, a creditor who knows, at or before loan
8 consummation, of a violation of the appraisal independ-
9 ence standards established in subsections (b) or (d) shall
10 not extend credit based on such appraisal unless the cred-
11 itor documents that the creditor has acted with reasonable
12 diligence to determine that the appraisal does not materi-
13 ally misstate or misrepresent the value of such dwelling.
14 ‘‘(g) RULES AND INTERPRETIVE GUIDELINES.—
15 ‘‘(1) IN GENERAL.—Except as provided under
16 paragraph (2), the Board, the Comptroller of the
17 Currency, the Federal Deposit Insurance Corpora-
18 tion, the National Credit Union Administration
19 Board, the Federal Housing Finance Agency, and
20 the Bureau may jointly issue rules, interpretive
21 guidelines, and general statements of policy with re-
22 spect to acts or practices that violate appraisal inde-
23 pendence in the provision of mortgage lending serv-
24 ices for a consumer credit transaction secured by the
25 principal dwelling of the consumer and mortgage
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2210
1 brokerage services for such a transaction, within the
2 meaning of subsections (a), (b), (c), (d), (e), (f), (h),
3 and (i).
4 ‘‘(2) INTERIM FINAL REGULATIONS.—The

5 Board shall, for purposes of this section, prescribe

6 interim final regulations no later than 90 days after
7 the date of enactment of this section defining with
8 specificity acts or practices that violate appraisal
9 independence in the provision of mortgage lending
10 services for a consumer credit transaction secured by
11 the principal dwelling of the consumer or mortgage
12 brokerage services for such a transaction and defin-
13 ing any terms in this section or such regulations.
14 Rules prescribed by the Board under this paragraph
15 shall be deemed to be rules prescribed by the agen-
16 cies jointly under paragraph (1).
17 ‘‘(h) APPRAISAL REPORT PORTABILITY.—Consistent
18 with the requirements of this section, the Board, the
19 Comptroller of the Currency, the Federal Deposit Insur-
20 ance Corporation, the National Credit Union Administra-
21 tion Board, the Federal Housing Finance Agency, and the
22 Bureau may jointly issue regulations that address the
23 issue of appraisal report portability, including regulations
24 that ensure the portability of the appraisal report between
25 lenders for a consumer credit transaction secured by a 1-
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2211
1 4 unit single family residence that is the principal dwelling
2 of the consumer, or mortgage brokerage services for such
3 a transaction.
4 ‘‘(i) CUSTOMARY AND REASONABLE FEE.—
5 ‘‘(1) IN GENERAL.—Lenders and their agents
6 shall compensate fee appraisers at a rate that is cus-
7 tomary and reasonable for appraisal services per-
8 formed in the market area of the property being ap-
9 praised. Evidence for such fees may be established
10 by objective third-party information, such as govern-
11 ment agency fee schedules, academic studies, and
12 independent private sector surveys. Fee studies shall
13 exclude assignments ordered by known appraisal
14 management companies.
15 ‘‘(2) FEE APPRAISER DEFINITION.—For pur-
16 poses of this section, the term ‘fee appraiser’ means
17 a person who is not an employee of the mortgage
18 loan originator or appraisal management company
19 engaging the appraiser and is—
20 ‘‘(A) a State licensed or certified appraiser
21 who receives a fee for performing an appraisal
22 and certifies that the appraisal has been pre-
23 pared in accordance with the Uniform Stand-
24 ards of Professional Appraisal Practice; or
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2212
1 ‘‘(B) a company not subject to the require-
2 ments of section 1124 of the Financial Institu-
3 tions Reform, Recovery, and Enforcement Act
4 of 1989 (12 U.S.C. 3331 et seq.) that utilizes
5 the services of State licensed or certified ap-
6 praisers and receives a fee for performing ap-
7 praisals in accordance with the Uniform Stand-
8 ards of Professional Appraisal Practice.
9 ‘‘(3) EXCEPTION FOR COMPLEX ASSIGN-

10 MENTS.—In the case of an appraisal involving a

11 complex assignment, the customary and reasonable
12 fee may reflect the increased time, difficulty, and
13 scope of the work required for such an appraisal and
14 include an amount over and above the customary
15 and reasonable fee for non-complex assignments.
16 ‘‘(j) SUNSET.—Effective on the date the interim final
17 regulations are promulgated pursuant to subsection (g),
18 the Home Valuation Code of Conduct announced by the
19 Federal Housing Finance Agency on December 23, 2008,
20 shall have no force or effect.
21 ‘‘(k) PENALTIES.—
22 ‘‘(1) FIRST VIOLATION.—In addition to the en-
23 forcement provisions referred to in section 130, each
24 person who violates this section shall forfeit and pay
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2213
1 a civil penalty of not more than $10,000 for each
2 day any such violation continues.
3 ‘‘(2) SUBSEQUENT VIOLATIONS.—In the case of
4 any person on whom a civil penalty has been im-
5 posed under paragraph (1), paragraph (1) shall be
6 applied by substituting ‘$20,000’ for ‘$10,000’ with
7 respect to all subsequent violations.
8 ‘‘(3) ASSESSMENT.—The agency referred to in
9 subsection (a) or (c) of section 108 with respect to
10 any person described in paragraph (1) shall assess
11 any penalty under this subsection to which such per-
12 son is subject.’’.
13 (b) CLERICAL AMENDMENT.—The table of sections
14 for chapter 2 of the Truth in Lending Act is amended
15 by inserting after the item relating to section 129D (as
16 added by section 1461(c)) the following new items:
‘‘129E. Appraisal independence requirements.
‘‘129F. Requirements for prompt crediting of home loan payments.
‘‘129G. Requests for payoff amounts of home loan.
‘‘129H. Property appraisal requirements.’’.

17 (c) DEFERENCE.—Section 105 of the Truth in Lend-

18 ing Act (15 U.S.C. 1604) is amended by adding at the
19 end the following:
20 ‘‘(h) DEFERENCE.—Notwithstanding any power
21 granted to any Federal agency under this title, the def-
22 erence that a court affords to the Bureau with respect to
23 a determination made by the Bureau relating to the mean-
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2214
1 ing or interpretation of any provision of this title, other
2 than section 129E or 129H, shall be applied as if the Bu-
3 reau were the only agency authorized to apply, enforce,
4 interpret, or administer the provisions of this title.’’.
5 (d) CONFORMING AMENDMENTS IN TITLE X NOT
6 APPLICABLE TO SECTIONS 129E AND 129H.—Notwith-
7 standing section 1099A, the term ‘‘Board’’ in sections
8 129E and 129H, as added by this subtitle, shall not be
9 substituted by the term ‘‘Bureau’’.
10 SEC. 1473. AMENDMENTS RELATING TO APPRAISAL SUB-

11 COMMITTEE OF FFIEC, APPRAISER INDE-

12 PENDENCE MONITORING, APPROVED AP-

13 PRAISER EDUCATION, APPRAISAL MANAGE-

14 MENT COMPANIES, APPRAISER COMPLAINT

15 HOTLINE, AUTOMATED VALUATION MODELS,

16 AND BROKER PRICE OPINIONS.

17 (a) THRESHOLD LEVELS.—Section 1112(b) of the

18 Financial Institutions Reform, Recovery, and Enforce-
19 ment Act of 1989 (12 U.S.C. 3341(b)) is amended by in-
20 serting before the period the following: ‘‘, and receives con-
21 currence from the Bureau of Consumer Financial Protec-
22 tion that such threshold level provides reasonable protec-
23 tion for consumers who purchase 1–4 unit single-family
24 residences’’.
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2215
1 (b) ANNUAL REPORT OF APPRAISAL SUB-
2 COMMITTEE.—Section 1103(a) of the Financial Institu-
3 tions Reform, Recovery, and Enforcement Act of 1989 (12
4 U.S.C. 3332(a)) is amended at the end by inserting the
5 following new paragraph:
6 ‘‘(5) transmit an annual report to the Congress
7 not later than June 15 of each year that describes
8 the manner in which each function assigned to the
9 Appraisal Subcommittee has been carried out during
10 the preceding year. The report shall also detail the
11 activities of the Appraisal Subcommittee, including
12 the results of all audits of State appraiser regulatory
13 agencies, and provide an accounting of disapproved
14 actions and warnings taken in the previous year, in-
15 cluding a description of the conditions causing the
16 disapproval and actions taken to achieve compli-
17 ance.’’.
18 (c) OPEN MEETINGS.—Section 1104(b) of the Finan-
19 cial Institutions Reform, Recovery, and Enforcement Act
20 of 1989 (12 U.S.C. 3333(b)) is amended—
21 (1) by inserting ‘‘in public session after notice
22 in the Federal Register, but may close certain por-
23 tions of these meetings related to personnel and re-
24 view of preliminary State audit reports,’’ after ‘‘shall
25 meet’’; and
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2216
1 (2) by adding after the final period the fol-
2 lowing: ‘‘The subject matter discussed in any closed
3 or executive session shall be described in the Federal
4 Register notice of the meeting.’’.
5 (d) REGULATIONS.—Section 1106 of the Financial
6 Institutions Reform, Recovery, and Enforcement Act of
7 1989 (12 U.S.C. 3335) is amended—
8 (1) by inserting ‘‘prescribe regulations in ac-
9 cordance with chapter 5 of title 5, United States
10 Code (commonly referred to as the Administrative
11 Procedures Act) after notice and opportunity for
12 comment,’’ after ‘‘hold hearings’’; and
13 (2) at the end by inserting ‘‘Any regulations
14 prescribed by the Appraisal Subcommittee shall (un-
15 less otherwise provided in this title) be limited to the
16 following functions: temporary practice, national reg-
17 istry, information sharing, and enforcement. For
18 purposes of prescribing regulations, the Appraisal
19 Subcommittee shall establish an advisory committee
20 of industry participants, including appraisers, lend-
21 ers, consumer advocates, real estate agents, and gov-
22 ernment agencies, and hold meetings as necessary to
23 support the development of regulations.’’.
24 (e) APPRAISAL REVIEWS AND COMPLEX APPRAIS-
25 ALS.—
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2217
1 (1) SECTION 1110.—Section 1110 of the Finan-
2 cial Institutions Reform, Recovery, and Enforcement
3 Act of 1989 (12 U.S.C. 3339) is amended—
4 (A) in paragraph (1), by striking ‘‘and’’;
5 (B) in paragraph (2), by striking the pe-
6 riod at the end and inserting ‘‘; and’’; and
7 (C) by inserting after paragraph (2) the
8 following:
9 ‘‘(3) that such appraisals shall be subject to ap-
10 propriate review for compliance with the Uniform
11 Standards of Professional Appraisal Practice.’’.
12 (2) SECTION 1113.—Section 1113 of the Finan-
13 cial Institutions and Reform, Recovery, and Enforce-
14 ment Act of 1989 (12 U.S.C. 3342) is amended by
15 inserting before the period the following: ‘‘, where a
16 complex 1-to-4 unit single family residential ap-
17 praisal means an appraisal for which the property to
18 be appraised, the form of ownership, the property
19 characteristics, or the market conditions are atypi-
20 cal’’.
21 (f) APPRAISAL MANAGEMENT SERVICES.—
22 (1) SUPERVISION OF THIRD PARTY PROVIDERS

23 OF APPRAISAL MANAGEMENT SERVICES.—Section

24 1103(a) of the Financial Institutions Reform, Recov-

25 ery, and Enforcement Act of 1989 (12 U.S.C.
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2218
1 3332(a)) (as previously amended by this section) is
2 amended—
3 (A) by amending paragraph (1) to read as
4 follows:
5 ‘‘(1) monitor the requirements established by
6 States—
7 ‘‘(A) for the certification and licensing of
8 individuals who are qualified to perform ap-
9 praisals in connection with federally related
10 transactions, including a code of professional
11 responsibility; and
12 ‘‘(B) for the registration and supervision
13 of the operations and activities of an appraisal
14 management company;’’; and
15 (B) by adding at the end the following new
16 paragraph:
17 ‘‘(6) maintain a national registry of appraisal
18 management companies that either are registered
19 with and subject to supervision of a State appraiser
20 certifying and licensing agency or are operating sub-
21 sidiaries of a Federally regulated financial institu-
22 tion.’’.
23 (2) APPRAISAL MANAGEMENT COMPANY MIN-

24 IMUM REQUIREMENTS.—Title XI of the Financial

25 Institutions Reform, Recovery, and Enforcement Act
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2219
1 of 1989 (12 U.S.C. 3331 et seq.) is amended by
2 adding at the end the following new section (and
3 amending the table of contents accordingly):
4 ‘‘SEC. 1124. APPRAISAL MANAGEMENT COMPANY MINIMUM

5 REQUIREMENTS.

6 ‘‘(a) IN GENERAL.—The Board of Governors of the

7 Federal Reserve System, the Comptroller of the Currency,
8 the Federal Deposit Insurance Corporation, the National
9 Credit Union Administration Board, the Federal Housing
10 Finance Agency, and the Bureau of Consumer Financial
11 Protection shall jointly, by rule, establish minimum re-
12 quirements to be applied by a State in the registration
13 of appraisal management companies. Such requirements
14 shall include a requirement that such companies—
15 ‘‘(1) register with and be subject to supervision
16 by a State appraiser certifying and licensing agency
17 in each State in which such company operates;
18 ‘‘(2) verify that only licensed or certified ap-
19 praisers are used for federally related transactions;
20 ‘‘(3) require that appraisals coordinated by an
21 appraisal management company comply with the
22 Uniform Standards of Professional Appraisal Prac-
23 tice; and
24 ‘‘(4) require that appraisals are conducted inde-
25 pendently and free from inappropriate influence and
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2220
1 coercion pursuant to the appraisal independence
2 standards established under section 129E of the
3 Truth in Lending Act.
4 ‘‘(b) RELATION TO STATE LAW.—Nothing in this
5 section shall be construed to prevent States from estab-
6 lishing requirements in addition to any rules promulgated
7 under subsection (a).
8 ‘‘(c) FEDERALLY REGULATED FINANCIAL INSTITU-
9 TIONS.—The requirements of subsection (a) shall apply to
10 an appraisal management company that is a subsidiary
11 owned and controlled by a financial institution and regu-
12 lated by a Federal financial institution regulatory agency.
13 An appraisal management company that is a subsidiary
14 owned and controlled by a financial institution regulated
15 by a Federal financial institution regulatory agency shall
16 not be required to register with a State.
17 ‘‘(d) REGISTRATION LIMITATIONS.—An appraisal
18 management company shall not be registered by a State
19 or included on the national registry if such company, in
20 whole or in part, directly or indirectly, is owned by any
21 person who has had an appraiser license or certificate re-
22 fused, denied, cancelled, surrendered in lieu of revocation,
23 or revoked in any State. Additionally, each person that
24 owns more than 10 percent of an appraisal management
25 company shall be of good moral character, as determined
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2221
1 by the State appraiser certifying and licensing agency, and
2 shall submit to a background investigation carried out by
3 the State appraiser certifying and licensing agency.
4 ‘‘(e) REPORTING.—The Board of Governors of the
5 Federal Reserve System, the Comptroller of the Currency,
6 the Federal Deposit Insurance Corporation, the National
7 Credit Union Administration Board, the Federal Housing
8 Finance Agency, and the Bureau of Consumer Financial
9 Protection shall jointly promulgate regulations for the re-
10 porting of the activities of appraisal management compa-
11 nies to the Appraisal Subcommittee in determining the
12 payment of the annual registry fee.
13 ‘‘(f) EFFECTIVE DATE.—
14 ‘‘(1) IN GENERAL.—No appraisal management
15 company may perform services related to a federally
16 related transaction in a State after the date that is
17 36 months after the date on which the regulations
18 required to be prescribed under subsection (a) are
19 prescribed in final form unless such company is reg-
20 istered with such State or subject to oversight by a
21 Federal financial institutions regulatory agency.
22 ‘‘(2) EXTENSION OF EFFECTIVE DATE.—Sub-

23 ject to the approval of the Council, the Appraisal

24 Subcommittee may extend by an additional 12
25 months the requirements for the registration and su-
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2222
1 pervision of appraisal management companies if it
2 makes a written finding that a State has made sub-
3 stantial progress in establishing a State appraisal
4 management company registration and supervision
5 system that appears to conform with the provisions
6 of this title.’’.
7 (3) STATE APPRAISER CERTIFYING AND LI-

8 CENSING AGENCY AUTHORITY.—Section 1117 of the

9 Financial Institutions Reform, Recovery, and En-
10 forcement Act of 1989 (12 U.S.C. 3346) is amended
11 by adding at the end the following: ‘‘The duties of
12 such agency may additionally include the registra-
13 tion and supervision of appraisal management com-
14 panies and the addition of information about the ap-
15 praisal management company to the national reg-
16 istry.’’.
17 (4) APPRAISAL MANAGEMENT COMPANY DEFI-

18 NITION.—Section 1121 of the Financial Institutions

19 Reform, Recovery, and Enforcement Act of 1989
20 (12 U.S.C. 3350) is amended by adding at the end
21 the following:
22 ‘‘(11) APPRAISAL MANAGEMENT COMPANY.—

23 The term ‘appraisal management company’ means,

24 in connection with valuing properties collateralizing
25 mortgage loans or mortgages incorporated into a
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2223
1 securitization, any external third party authorized ei-
2 ther by a creditor of a consumer credit transaction
3 secured by a consumer’s principal dwelling or by an
4 underwriter of or other principal in the secondary
5 mortgage markets, that oversees a network or panel
6 of more than 15 certified or licensed appraisers in
7 a State or 25 or more nationally within a given
8 year—
9 ‘‘(A) to recruit, select, and retain apprais-
10 ers;
11 ‘‘(B) to contract with licensed and certified
12 appraisers to perform appraisal assignments;
13 ‘‘(C) to manage the process of having an
14 appraisal performed, including providing admin-
15 istrative duties such as receiving appraisal or-
16 ders and appraisal reports, submitting com-
17 pleted appraisal reports to creditors and under-
18 writers, collecting fees from creditors and un-
19 derwriters for services provided, and reimburs-
20 ing appraisers for services performed; or
21 ‘‘(D) to review and verify the work of ap-
22 praisers.’’.
23 (g) STATE AGENCY REPORTING REQUIREMENT.—
24 Section 1109(a) of the Financial Institutions Reform, Re-
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2224
1 covery, and Enforcement Act of 1989 (12 U.S.C. 3338(a))
2 is amended—
3 (1) by striking ‘‘and’’ after the semicolon in
4 paragraph (1);
5 (2) by redesignating paragraph (2) as para-
6 graph (4); and
7 (3) by inserting after paragraph (1) the fol-
8 lowing new paragraphs:
9 ‘‘(2) transmit reports on the issuance and re-
10 newal of licenses and certifications, sanctions, dis-
11 ciplinary actions, license and certification revoca-
12 tions, and license and certification suspensions on a
13 timely basis to the national registry of the Appraisal
14 Subcommittee;
15 ‘‘(3) transmit reports on a timely basis of su-
16 pervisory activities involving appraisal management
17 companies or other third-party providers of apprais-
18 als and appraisal management services, including in-
19 vestigations initiated and disciplinary actions taken;
20 and’’.
21 (h) REGISTRY FEES MODIFIED.—
22 (1) IN GENERAL.—Section 1109(a) of the Fi-
23 nancial Institutions Reform, Recovery, and Enforce-
24 ment Act of 1989 (12 U.S.C. 3338(a)) is amend-
25 ed—
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2225
1 (A) by amending paragraph (4) (as modi-
2 fied by section 1473(g)) to read as follows:
3 ‘‘(4) collect—
4 ‘‘(A) from such individuals who perform or
5 seek to perform appraisals in federally related
6 transactions, an annual registry fee of not more
7 than $40, such fees to be transmitted by the
8 State agencies to the Council on an annual
9 basis; and
10 ‘‘(B) from an appraisal management com-
11 pany that either has registered with a State ap-
12 praiser certifying and licensing agency in ac-
13 cordance with this title or operates as a sub-
14 sidiary of a federally regulated financial institu-
15 tion, an annual registry fee of—
16 ‘‘(i) in the case of such a company
17 that has been in existence for more than a
18 year, $25 multiplied by the number of ap-
19 praisers working for or contracting with
20 such company in such State during the
21 previous year, but where such $25 amount
22 may be adjusted, up to a maximum of $50,
23 at the discretion of the Appraisal Sub-
24 committee, if necessary to carry out the
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2226
1 Subcommittee’s functions under this title;
2 and
3 ‘‘(ii) in the case of such a company
4 that has not been in existence for more
5 than a year, $25 multiplied by an appro-
6 priate number to be determined by the Ap-
7 praisal Subcommittee, and where such
8 number will be used for determining the
9 fee of all such companies that were not in
10 existence for more than a year, but where
11 such $25 amount may be adjusted, up to
12 a maximum of $50, at the discretion of the
13 Appraisal Subcommittee, if necessary to
14 carry out the Subcommittee’s functions
15 under this title.’’; and
16 (B) by amending the matter following
17 paragraph (4), as redesignated, to read as fol-
18 lows:
19 ‘‘Subject to the approval of the Council, the Appraisal
20 Subcommittee may adjust the dollar amount of registry
21 fees under paragraph (4)(A), up to a maximum of $80
22 per annum, as necessary to carry out its functions under
23 this title. The Appraisal Subcommittee shall consider at
24 least once every 5 years whether to adjust the dollar
25 amount of the registry fees to account for inflation. In
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2227
1 implementing any change in registry fees, the Appraisal
2 Subcommittee shall provide flexibility to the States for
3 multi-year certifications and licenses already in place, as
4 well as a transition period to implement the changes in
5 registry fees. In establishing the amount of the annual
6 registry fee for an appraisal management company, the
7 Appraisal Subcommittee shall have the discretion to im-
8 pose a minimum annual registry fee for an appraisal man-
9 agement company to protect against the under reporting
10 of the number of appraisers working for or contracted by
11 the appraisal management company.’’.
12 (2) INCREMENTAL REVENUES.—Incremental

13 revenues collected pursuant to the increases required

14 by this subsection shall be placed in a separate ac-
15 count at the United States Treasury, entitled the
16 ‘‘Appraisal Subcommittee Account’’.
17 (i) GRANTS AND REPORTS.—Section 1109(b) of the
18 Financial Institutions Reform, Recovery, and Enforce-
19 ment Act of 1989 (12 U.S.C. 3338(b)) is amended—
20 (1) by striking ‘‘and’’ after the semicolon in
21 paragraph (3);
22 (2) by striking the period at the end of para-
23 graph (4) and inserting a semicolon;
24 (3) by adding at the end the following new
25 paragraphs:
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2228
1 ‘‘(5) to make grants to State appraiser certi-
2 fying and licensing agencies, in accordance with poli-
3 cies to be developed by the Appraisal Subcommittee,
4 to support the efforts of such agencies to comply
5 with this title, including—
6 ‘‘(A) the complaint process, complaint in-
7 vestigations, and appraiser enforcement activi-
8 ties of such agencies; and
9 ‘‘(B) the submission of data on State li-
10 censed and certified appraisers and appraisal
11 management companies to the National ap-
12 praisal registry, including information affirming
13 that the appraiser or appraisal management
14 company meets the required qualification cri-
15 teria and formal and informal disciplinary ac-
16 tions; and
17 ‘‘(6) to report to all State appraiser certifying
18 and licensing agencies when a license or certification
19 is surrendered, revoked, or suspended.’’.
20 Obligations authorized under this subsection may not ex-
21 ceed 75 percent of the fiscal year total of incremental in-
22 crease in fees collected and deposited in the ‘‘Appraisal
23 Subcommittee Account’’ pursuant to subsection (h).
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2229
1 (j) CRITERIA.—Section 1116 of the Financial Institu-
2 tions Reform, Recovery, and Enforcement Act of 1989 (12
3 U.S.C. 3345) is amended—
4 (1) in subsection (c), by inserting ‘‘whose cri-
5 teria for the licensing of a real estate appraiser cur-
6 rently meet or exceed the minimum criteria issued
7 by the Appraisal Qualifications Board of The Ap-
8 praisal Foundation for the licensing of real estate
9 appraisers’’ before the period at the end; and
10 (2) by striking subsection (e) and inserting the
11 following new subsection:
12 ‘‘(e) MINIMUM QUALIFICATION REQUIREMENTS.—
13 Any requirements established for individuals in the posi-
14 tion of ‘Trainee Appraiser’ and ‘Supervisory Appraiser’
15 shall meet or exceed the minimum qualification require-
16 ments of the Appraiser Qualifications Board of The Ap-
17 praisal Foundation. The Appraisal Subcommittee shall
18 have the authority to enforce these requirements.’’.
19 (k) MONITORING OF STATE APPRAISER CERTIFYING
20 AND LICENSING AGENCIES.—Section 1118 of the Finan-
21 cial Institutions Reform, Recovery, and Enforcement Act
22 of 1989 (12 U.S.C. 3347) is amended—
23 (1) by amending subsection (a) to read as fol-
24 lows:
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2230
1 ‘‘(a) IN GENERAL.—The Appraisal Subcommittee
2 shall monitor each State appraiser certifying and licensing
3 agency for the purposes of determining whether such
4 agency—
5 ‘‘(1) has policies, practices, funding, staffing,
6 and procedures that are consistent with this title;
7 ‘‘(2) processes complaints and completes inves-
8 tigations in a reasonable time period;
9 ‘‘(3) appropriately disciplines sanctioned ap-
10 praisers and appraisal management companies;
11 ‘‘(4) maintains an effective regulatory program;
12 and
13 ‘‘(5) reports complaints and disciplinary actions
14 on a timely basis to the national registries on ap-
15 praisers and appraisal management companies main-
16 tained by the Appraisal Subcommittee.
17 The Appraisal Subcommittee shall have the authority to
18 remove a State licensed or certified appraiser or a reg-
19 istered appraisal management company from a national
20 registry on an interim basis, not to exceed 90 days, pend-
21 ing State agency action on licensing, certification, reg-
22 istration, and disciplinary proceedings. The Appraisal
23 Subcommittee and all agencies, instrumentalities, and
24 Federally recognized entities under this title shall not rec-
25 ognize appraiser certifications and licenses from States
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2231
1 whose appraisal policies, practices, funding, staffing, or
2 procedures are found to be inconsistent with this title. The
3 Appraisal Subcommittee shall have the authority to im-
4 pose sanctions, as described in this section, against a State
5 agency that fails to have an effective appraiser regulatory
6 program. In determining whether such a program is effec-
7 tive, the Appraisal Subcommittee shall include an analysis
8 of the licensing and certification of appraisers, the reg-
9 istration of appraisal management companies, the
10 issuance of temporary licenses and certifications for ap-
11 praisers, the receiving and tracking of submitted com-
12 plaints against appraisers and appraisal management
13 companies, the investigation of complaints, and enforce-
14 ment actions against appraisers and appraisal manage-
15 ment companies. The Appraisal Subcommittee shall have
16 the authority to impose interim actions and suspensions
17 against a State agency as an alternative to, or in advance
18 of, the derecognition of a State agency.’’.
19 (2) in subsection (b)(2), by inserting after ‘‘au-
20 thority’’ the following: ‘‘or sufficient funding’’.
21 (l) RECIPROCITY.—Subsection (b) of section 1122 of
22 the Financial Institutions Reform, Recovery, and Enforce-
23 ment Act of 1989 (12 U.S.C. 3351(b)) is amended to read
24 as follows:
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2232
1 ‘‘(b) RECIPROCITY.—Notwithstanding any other pro-
2 visions of this title, a federally related transaction shall
3 not be appraised by a certified or licensed appraiser unless
4 the State appraiser certifying or licensing agency of the
5 State certifying or licensing such appraiser has in place
6 a policy of issuing a reciprocal certification or license for
7 an individual from another State when—
8 ‘‘(1) the appraiser licensing and certification
9 program of such other State is in compliance with
10 the provisions of this title; and
11 ‘‘(2) the appraiser holds a valid certification
12 from a State whose requirements for certification or
13 licensing meet or exceed the licensure standards es-
14 tablished by the State where an individual seeks ap-
15 praisal licensure.’’.
16 (m) CONSIDERATION OF PROFESSIONAL APPRAISAL
17 DESIGNATIONS.—Section 1122(d) of the Financial Insti-
18 tutions Reform, Recovery, and Enforcement Act of 1989
19 (12 U.S.C. 3351(d)) is amended by striking ‘‘shall not ex-
20 clude’’ and all that follows through the end of the sub-
21 section and inserting the following: ‘‘may include edu-
22 cation achieved, experience, sample appraisals, and ref-
23 erences from prior clients. Membership in a nationally rec-
24 ognized professional appraisal organization may be a cri-
25 teria considered, though lack of membership therein shall
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2233
1 not be the sole bar against consideration for an assign-
2 ment under these criteria.’’.
3 (n) APPRAISER INDEPENDENCE.—Section 1122 of
4 the Financial Institutions Reform, Recovery, and Enforce-
5 ment Act of 1989 (12 U.S.C. 3351) is amended by adding
6 at the end the following new subsection:
7 ‘‘(g) APPRAISER INDEPENDENCE MONITORING.—
8 The Appraisal Subcommittee shall monitor each State ap-
9 praiser certifying and licensing agency for the purpose of
10 determining whether such agency’s policies, practices, and
11 procedures are consistent with the purposes of maintain-
12 ing appraiser independence and whether such State has
13 adopted and maintains effective laws, regulations, and
14 policies aimed at maintaining appraiser independence.’’.
15 (o) APPRAISER EDUCATION.—Section 1122 of the
16 Financial Institutions Reform, Recovery, and Enforce-
17 ment Act of 1989 (12 U.S.C. 3351) is amended by insert-
18 ing after subsection (g) (as added by subsection (l) of this
19 section) the following new subsection:
20 ‘‘(h) APPROVED EDUCATION.—The Appraisal Sub-
21 committee shall encourage the States to accept courses ap-
22 proved by the Appraiser Qualification Board’s Course Ap-
23 proval Program.’’.
24 (p) APPRAISAL COMPLAINT HOTLINE.—Section 1122
25 of the Financial Institutions Reform, Recovery, and En-
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2234
1 forcement Act of 1989 (12 U.S.C. 3351), as amended by
2 this section, is amended by adding at the end the following
3 new subsection:
4 ‘‘(i) APPRAISAL COMPLAINT NATIONAL HOTLINE.—
5 If, 6 months after the date of the enactment of this sub-
6 section, the Appraisal Subcommittee determines that no
7 national hotline exists to receive complaints of non-compli-
8 ance with appraisal independence standards and Uniform
9 Standards of Professional Appraisal Practice, including
10 complaints from appraisers, individuals, or other entities
11 concerning the improper influencing or attempted im-
12 proper influencing of appraisers or the appraisal process,
13 the Appraisal Subcommittee shall establish and operate
14 such a national hotline, which shall include a toll-free tele-
15 phone number and an email address. If the Appraisal Sub-
16 committee operates such a national hotline, the Appraisal
17 Subcommittee shall refer complaints for further action to
18 appropriate governmental bodies, including a State ap-
19 praiser certifying and licensing agency, a financial institu-
20 tion regulator, or other appropriate legal authorities. For
21 complaints referred to State appraiser certifying and li-
22 censing agencies or to Federal regulators, the Appraisal
23 Subcommittee shall have the authority to follow up such
24 complaint referrals in order to determine the status of the
25 resolution of the complaint.’’.
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1 (q) AUTOMATED VALUATION MODELS.—Title XI of
2 the Financial Institutions Reform, Recovery, and Enforce-
3 ment Act of 1989 (12 U.S.C. 3331 et seq.), as amended
4 by this section, is amended by adding at the end the fol-
5 lowing new section (and amending the table of contents
6 accordingly):
7 ‘‘SEC. 1125. AUTOMATED VALUATION MODELS USED TO ES-

8 TIMATE COLLATERAL VALUE FOR MORT-

9 GAGE LENDING PURPOSES.

10 ‘‘(a) IN GENERAL.—Automated valuation models

11 shall adhere to quality control standards designed to—
12 ‘‘(1) ensure a high level of confidence in the es-
13 timates produced by automated valuation models;
14 ‘‘(2) protect against the manipulation of data;
15 ‘‘(3) seek to avoid conflicts of interest;
16 ‘‘(4) require random sample testing and re-
17 views; and
18 ‘‘(5) account for any other such factor that the
19 agencies listed in subsection (b) determine to be ap-
20 propriate.
21 ‘‘(b) ADOPTION OF REGULATIONS.—The Board, the
22 Comptroller of the Currency, the Federal Deposit Insur-
23 ance Corporation, the National Credit Union Administra-
24 tion Board, the Federal Housing Finance Agency, and the
25 Bureau of Consumer Financial Protection, in consultation
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2236
1 with the staff of the Appraisal Subcommittee and the Ap-
2 praisal Standards Board of the Appraisal Foundation,
3 shall promulgate regulations to implement the quality con-
4 trol standards required under this section.
5 ‘‘(c) ENFORCEMENT.—Compliance with regulations
6 issued under this subsection shall be enforced by—
7 ‘‘(1) with respect to a financial institution, or
8 subsidiary owned and controlled by a financial insti-
9 tution and regulated by a Federal financial institu-
10 tion regulatory agency, the Federal financial institu-
11 tion regulatory agency that acts as the primary Fed-
12 eral supervisor of such financial institution or sub-
13 sidiary; and
14 ‘‘(2) with respect to other participants in the
15 market for appraisals of 1-to-4 unit single family
16 residential real estate, the Federal Trade Commis-
17 sion, the Bureau of Consumer Financial Protection,
18 and a State attorney general.
19 ‘‘(d) AUTOMATED VALUATION MODEL DEFINED.—
20 For purposes of this section, the term ‘automated valu-
21 ation model’ means any computerized model used by mort-
22 gage originators and secondary market issuers to deter-
23 mine the collateral worth of a mortgage secured by a con-
24 sumer’s principal dwelling.’’.
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1 (r) BROKER PRICE OPINIONS.—Title XI of the Fi-
2 nancial Institutions Reform, Recovery, and Enforcement
3 Act of 1989 (12 U.S.C. 3331 et seq.), as amended by this
4 section, is amended by adding at the end the following
5 new section (and amending the table of contents accord-
6 ingly):
7 ‘‘SEC. 1126. BROKER PRICE OPINIONS.

8 ‘‘(a) GENERAL PROHIBITION.—In conjunction with

9 the purchase of a consumer’s principal dwelling, broker
10 price opinions may not be used as the primary basis to
11 determine the value of a piece of property for the purpose
12 of a loan origination of a residential mortgage loan se-
13 cured by such piece of property.
14 ‘‘(b) BROKER PRICE OPINION DEFINED.—For pur-
15 poses of this section, the term ‘broker price opinion’ means
16 an estimate prepared by a real estate broker, agent, or
17 sales person that details the probable selling price of a
18 particular piece of real estate property and provides a
19 varying level of detail about the property’s condition, mar-
20 ket, and neighborhood, and information on comparable
21 sales, but does not include an automated valuation model,
22 as defined in section 1125(c).’’.
23 (s) AMENDMENTS TO APPRAISAL SUBCOMMITTEE.—
24 Section 1011 of the Federal Financial Institutions Exam-
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2238
1 ination Council Act of 1978 (12 U.S.C. 3310) is amend-
2 ed—
3 (1) in the first sentence, by adding before the
4 period the following: ‘‘, the Bureau of Consumer Fi-
5 nancial Protection, and the Federal Housing Fi-
6 nance Agency’’; and
7 (2) by inserting at the end the following: ‘‘At
8 all times at least one member of the Appraisal Sub-
9 committee shall have demonstrated knowledge and
10 competence through licensure, certification, or pro-
11 fessional designation within the appraisal profes-
12 sion.’’.
13 (t) TECHNICAL CORRECTIONS.—
14 (1) Section 1119(a)(2) of the Financial Institu-
15 tions Reform, Recovery, and Enforcement Act of
16 1989 (12 U.S.C. 3348(a)(2)) is amended by striking
17 ‘‘council,’’ and inserting ‘‘Council,’’.
18 (2) Section 1121(6) of the Financial Institu-
19 tions Reform, Recovery, and Enforcement Act of
20 1989 (12 U.S.C. 3350(6)) is amended by striking
21 ‘‘Corporations,’’ and inserting ‘‘Corporation,’’.
22 (3) Section 1121(8) of the Financial Institu-
23 tions Reform, Recovery, and Enforcement Act of
24 1989 (12 U.S.C. 3350(8)) is amended by striking
25 ‘‘council’’ and inserting ‘‘Council’’.
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2239
1 (4) Section 1122 of the Financial Institutions
2 Reform, Recovery, and Enforcement Act of 1989
3 (12 U.S.C. 3351) is amended—
4 (A) in subsection (a)(1) by moving the left
5 margin of subparagraphs (A), (B), and (C) 2
6 ems to the right; and
7 (B) in subsection (c)—
8 (i) by striking ‘‘Federal Financial In-
9 stitutions Examination Council’’ and in-
10 serting ‘‘Financial Institutions Examina-
11 tion Council’’; and
12 (ii) by striking ‘‘the council’s func-
13 tions’’ and inserting ‘‘the Council’s func-
14 tions’’.
15 SEC. 1474. EQUAL CREDIT OPPORTUNITY ACT AMENDMENT.

16 Subsection (e) of section 701 of the Equal Credit Op-

17 portunity Act (15 U.S.C. 1691) is amended to read as
18 follows:
19 ‘‘(e) COPIES FURNISHED TO APPLICANTS.—
20 ‘‘(1) IN GENERAL.—Each creditor shall furnish
21 to an applicant a copy of any and all written ap-
22 praisals and valuations developed in connection with
23 the applicant’s application for a loan that is secured
24 or would have been secured by a first lien on a
25 dwelling promptly upon completion, but in no case