B 23-0807 — Appraisal Management Company Regulation Emergency Act of 2020

nENROLLED ChairmanORIGINAL PhilAN MendelsonACT u____________ uIN aTHE yCOUNCIL oOF CTHE ABILL.DISTRICT OF COLUMBIA ___________________ To require, on an emergency basis, the Department of Insurance, Securities, and Banking to provide for the licensing of certain entities providing appraisal management services in the District of Columbia and to require an annual registration fee to be paid by those entities.

iBE INIT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA.COLUMBIA, That this act may be cited as the “Appraisal Management Company Regulation Emergency Act of 2020”.

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AAPPRAISAL PMANAGEMENT PCOMPANY RREGULATIONS A I S A L M A N A G E M E N T C O M P A N Y R E G U L A T I O N S Sec.

Forupoeoftisat,heem:For purposes of this act, the term:

1)Aflat”meansy(1) companhtcnrl,isonrledb,orsuder“Affiliate” commonnroofaotercmpny.means any company that controls, is controlled by, or is under common control of another company.

()“AMC(2) atoalRgity”meansergsroftaereiteedppasl“AMC managemeopanesadfeealyrglaedpraslmanagemenmpaiesaitanedyNational heppasalubomitee.Registry” means the registry of state-registered appraisal management companies and federally regulated appraisal management companies maintained by the Appraisal Subcommittee.

()“ApaialFunaton”meanheppasalFunaionstbisedn(3) November“Appraisal 30,Foundation” 1987,means asthe aAppraisal not-for-profitofIllinois.nFoundation underestablished theon lawsNovember (4)30, “Appraisal1987, managementas company” means a person,not-for-profit notcorporation includingunder athe departmentlaws or division of anIllinois. entity that provides appraisal management services only to that entity, that:

(4) “Appraisal management company” means a person, not including a department or division of an entity that provides appraisal management services only to that entity, that:

ENROLLED ORIGINAL (5) “Appraisal management services” means one or more of the following:

An appraiser is an independent contractcontractor or if the appraiser is treated as an independent contractor by the appraisal management company for purposes of federal income taxation.

79 (A) An officer, director, or owner of greater than a 10% interest of a corporation, partnership, or other business entity seeking to act as an appraisal management company;

ENROLLED ORIGINAL (B) An individual employed, appointed, or authorized by an appraisal management company that has the authority to enter a contractual relationship with other persons for the performance of services requiring registration as an appraisal management company and has the authority to enter agreements with appraisers for the performance of appraisals;

§ 1813(¢)(2)),1813(c)(2)), and regulated by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, or the National Credit Union Administration.

(19) “Federally related transaction” means any real-estate-related financial transaction that involves an insured depository institution regulated by the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal ENROLLED ORIGINAL Deposit Insurance Corporation, or National Credit Union Administration and that requires the services of an appraiser under the interagency appraisal rules.

ENROLLED ORIGINAL (4) Verify that the appraisers on the appraiser panel of an appraisal management company operating in the District hold valid District certifications or licenses, as applicable;

ENROLLED ORIGINAL (1) Accepts the appraiser for consideration for future appraisal assignments in covered transactions or for secondary mortgage market participants in connection with covered transactions;

(b) A federally regulated appraisal management company operating in the District must report to the Department the information required to be submitted by the District to the Appraisal Subcommittee, pursuant to the Appraisal Subcommittee’s policies regarding the determination of ENROLLED ORIGINAL the appraisal management company National Registry fee.

106,106. Appraisal management company requirements.

Appraisal management company requirements.

(b) An appraisal management company that has a reasonable basis to believe an appraiser has materially failed to comply with applicable laws or rules or has materially violated the ENROLLED ORIGINAL USPAP shall refer the matter to the Department in conformance with applicable federal laws and regulations.

§ 1639e), including the requirement that a customary and reasonable fee be paid to an independent appraiser who ENROLLED ORIGINAL completes an appraisal in connection with a consumer credit transaction secured by a principal dwelling.

(a)(1) Procure or attempt to procure a registration or renewal by knowingly making a false statement, submitting false information or refusing to provide complete information in response to a question in an application for registration or renewal;

(b)(2) Willfully violate this act or rules of the Department pertaining to this act;

(c)(3) Improperly influence or attempt to improperly influence the development, reporting, result, or review of an appraisal through intimidation, coercion, extortion, bribery, or any other manner, including:

(1)(A) Withholding payment for appraisal services;

(2)(B) Threatening to exclude an appraiser from future work or threatening to demote or terminate the appraiser in order to improperly obtain a desired result;

(3)(C) Conditioning payment of an appraisal fee upon the opinion, conclusion, or valuation to be reached by the appraiser;

or (4)(D) Requesting that an appraiser report a predetermined opinion, conclusion, or valuation, or the desired valuation of any person or entity;

(d)(4) Alter, amend, or change an appraisal report submitted by an appraiser without the appraiser's knowledge and written consent;

(e)(5) Except within the first 90 days after an independent appraiser is added to an appraiser panel, remove an independent appraiser from an appraiser panel without prior written notice to the appraiser, with the prior written notice including evidence of the following, if applicable:

(1)(A) The appraiser's illegal conduct;

(2)(B) A violation of USPAP, this act, or the rules adopted by the Department pursuant to this act;

(3)(C) Improper or unprofessional conduct;

or (4)(D) Substandard performance or other substantive deficiencies;

(f)(6) Require an appraiser to sign any indemnification agreement that would require the appraiser to defend and hold harmless the appraisal management company or any of its agents or employees for any liability, damage, losses, or claims arising out of the services ENROLLED ORIGINAL performed by the appraisal management company or its agents, employees, or independent contractors and not the services performed by the appraiser;

(g)(7) Prohibit lawful communications between the appraiser and any other person whom the appraiser, in the appraiser’s professional judgment, believes possesses information that would be relevant;

(h)(8) Fail to timely respond to any subpoena or any other request for information;

(i)(9) Fail to timely obey an administrative order of the Department;