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News Now

Washington
Matz: AMC proposal shows 'regulatory blind spot'
ALEXANDRIA, Va. (3/21/14)--National Credit Union Administration Chairman Debbie Matz Thursday used the agency's proposal of a joint-agency plan to impose minimum requirements for appraisal management companies (AMC) as an occasion to draw attention to what she called an NCUA "regulatory blind spot."

The six federal financial regulatory agencies that comprise the Federal Financial Institutions Examination Council, including the NCUA, are proposing the rule to implement Dodd-Frank Act requirements meant to better ensure the quality of appraisals and assure compliance with the Truth-in-Lending Act.

In response to a question from NCUA board member Michael Fryzel during the open meeting, agency staff said the AMC proposal should not have a measurable impact on credit unions. 

However, Matz highlighted the problem she believes the agency faces:

"We face a regulatory blind spot," Matz said. "NCUA can approve this interagency rule, which would strengthen regulation of appraisal management companies and should help prevent conflicts of interest, but we are unable to enforce it.

"NCUA remains the only financial services regulator lacking the necessary authority to examine vendors for safety and soundness and compliance with laws and regulations. NCUA will continue to call on Congress to provide this authority."

Historically, the Credit Union National Association has not supported additional oversight authority over third-party vendors for the agency. CUNA has raised concerns about agency's expertise in the area and the implications for the agency's budget, which has been increased for the last seven years.

The proposed rule would set minimum requirements for registration and supervision of AMCs--the intermediaries for appraisers and lenders that provide appraisal services. These requirements would apply to states that elect to establish an agency with authority to register and supervise appraisal management companies.

Under the joint-agency plan, an appraisal management company that is a subsidiary of a financial institution and regulated by a federal financial services regulatory agency would not be required to register with a state, but would otherwise be required to meet the same minimum requirements as other appraisal management companies.

After all six FFIEC agencies approve the proposal, it will be published in the Federal Register. A 60-day comment period will start upon publication.

CUNA will be evaluating the impact of the proposal and will provide a summary in its Regulatory Comment Call.
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