FRHY5_20220624_omb

Supporting Statement for the
Recordkeeping and Disclosure Requirements Associated with Regulation Y for
Minimum Requirements for Appraisal Management Companies
(FR HY-5; OMB No. 7100-0370)
Summary
The Board of Governors of the Federal Reserve System (Board), under authority
delegated by the Office of Management and Budget (OMB), has extended for three years,
without revision, the Recordkeeping and Disclosure Requirements Associated with Regulation Y
for Minimum Requirements for Appraisal Management Companies (FR HY-5; OMB No.
7100-0370). In 2015, the Board and certain other agencies published a final rule 1 implementing
part of section 1473 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (DoddFrank Act),2 which relates to the supervision and regulation of appraisal management companies
(AMCs). An AMC is an entity that serves as an intermediary for, and provides certain appraisalrelated services to, creditors. 3 The Board’s final rule instituted certain recordkeeping and
disclosure requirements for AMCs and U.S. states, which are located in the Board’s
Regulation Y - Bank Holding Companies and Change in Bank Control (12 CFR Part 225).
The estimated total annual burden for the FR HY-5 is 2,508 hours.
Background and Justification
Section 1473 of the Dodd-Frank Act added section 1124 to Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). The new section
required the agencies to establish, by rule, minimum requirements to be applied by states in the
registration and supervision of AMCs. 4 These minimum requirements apply to states that have
elected to establish an appraiser certifying and licensing agency with authority to register and
supervise AMCs (participating states). Participating states must require AMCs to register with
and be subject to supervision by the state’s appraiser certifying and licensing agency. Such
requirements must apply to all AMCs, except that AMCs that are a subsidiary of an insured
depository institution (a federally regulated AMC) are not required to register with a state. States
1

See 80 FR 32657 (June 9, 2015). This final rule was published jointly by the Board with the Office of the
Comptroller of the Currency (OCC), Federal Deposit Insurance Corporation (FDIC), National Credit Union
Administration (NCUA), Consumer Financial Protection Bureau (CFPB), and Federal Housing Finance Agency
(FHFA) (collectively, the agencies).
2
Public Law 111-203, 124 Stat. 1376 (2010).
3
Specifically, the term AMC means, “in connection with valuing properties collateralizing mortgage loans or
mortgages incorporated into a securitization, any external third party authorized either by a creditor of a consumer
credit transaction secured by a consumer’s principal dwelling or by an underwriter of or other principal in the
secondary mortgage markets, that oversees a network or panel of more than 15 certified or licensed appraisers in a
state or 25 or more nationally within a given year (A) to recruit, select, and retrain appraisers, (B) to contract with
licensed and certified appraisers to perform appraisal assignments, (C) to manage the process of having an appraisal
performed, including providing administrative duties such as receiving appraisal orders and appraisal reports,
submitting completed appraisal reports to creditors and underwriters, collecting fees from creditors and underwriters
for services provided, and reimbursing appraisers for services performed, or (D) to review and verify the work of
appraisers.” 12 U.S.C. § 3350(11).
4
See 12 U.S.C. § 3353.

are not required to establish an appraiser certifying and licensing agency with authority to
register and supervise AMCs; however, a non-federally regulated AMC may not provide services
for a federally related transaction in a state that does not establish such a program. 5
Section 1473 of the Dodd-Frank Act also amended Title XI to require the Appraisal
Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC) to
maintain an AMC National Registry, which includes AMCs that are either registered with and
subject to supervision by a state appraiser certifying and licensing agency or are federally
regulated AMCs. It also added a requirement that participating states collect annual registry fees
from AMCs. Further, section 1473 of the Dodd-Frank Act requires the agencies to promulgate
regulations for the reporting of the activities of AMCs to the ASC relating to the determination
of the AMCs’ annual registry fee.
The requirements associated with section 1124 of Title XI were implemented by the
Board, as part of a joint rulemaking with all of the agencies, in 2015. This information is not
available from other sources.
Description of Information Collection
The Board’s recordkeeping and disclosure requirements associated with the minimum
requirements for AMCs are found in sections 225.192, 225.193, 225.195, and 225.196 of the
Board’s Regulation Y, Subpart M. Compliance with the information collections is mandatory for
AMCs and required to obtain a benefit for states.
Recordkeeping Requirements
Registration and Supervision Program. Participating states must have an AMC
registration and supervision program. Pursuant to section 225.193(a), each participating state
must establish and maintain within its appraiser certifying and licensing agency a registration
and supervision program with the legal authority and mechanisms to, among other things, review
and approve or deny an AMC’s application for initial registration; require AMCs to submit
reports, information, and documents; and report violations of appraisal-related laws, regulations,
or orders, and disciplinary and enforcement actions to the ASC.
Disclosure Requirements
Written Notice of Appraiser Removal from Network or Panel. Section 225.192(b)
provides that an appraiser in an AMC’s network or panel is deemed to remain a part of the
AMC’s appraiser panel until the AMC (1) sends a written notice to the appraiser removing the
appraiser with an explanation or (2) receives a written notice from the appraiser asking to be
removed or a notice of the death or incapacity of the appraiser.
State Regulated AMC Reporting Requirements. Section 225.193(b) requires each
participating state to require non-federally regulated AMCs to register with the state appraiser
certifying and licensing agency.
5

12 U.S.C. § 3353(f)(1).

2

Federally Regulated AMC Reporting Requirements. Section 225.195(c) requires a
federally regulated AMC to report to the state or states in which it operates the information
required to be submitted by the state pursuant to the ASC’s policies regarding the determination
of the AMC National Registry fee, including information relating to certain ownership
limitations in the regulation.
State Reporting Requirements to the ASC. Section 225.196 requires that each
participating state submit to the ASC the information required to be submitted by the ASC
regulations or guidance concerning AMCs that operate in the state.
Respondent Panel
The FR HY-5 panel comprises federally regulated and state regulated AMCs and U.S.
states, except that AMCs that oversee 15 or fewer appraisers in a state or less than 25 appraisers
in two or more states are exempt from these recordkeeping and disclosure requirements.
Time Schedule for Information Collection
The Board’s recordkeeping and disclosure requirements associated with minimum
requirements for AMCs are event-generated.
Public Availability of Data
The AMC National Registry is available to the public on the ASC website
(https://www.asc.gov/Home.aspx). No information is collected by or made publicly available by
the Board as part of this information collection.
Legal Status
The FIRREA authorizes the FR HY-5. Agencies must “jointly, by rule, establish
minimum requirements to be applied by a State in the registration of [AMCs]” (12 U.S.C. §
3353(a)). The agencies further must “jointly promulgate regulations for the reporting of the
activities of [AMCs] to the [ASC] in determining the payment of the annual registry fee”
(12 U.S.C. § 3353(e)). Each participating state with an appraiser certifying and licensing agency
must also transmit to the ASC “[1] a roster listing individuals who have received a State
certification or license … [2] reports on the issuance and renewal of licenses and certifications,
sanctions, disciplinary actions, and license and certification revocations, and license and
certification suspensions on a timely basis to the national registry of the [ASC] … [3] including
investigations initiated and disciplinary actions taken” (12 U.S.C. § 3338(a)). The FR HY-5
recordkeeping and disclosure requirements are required to obtain a benefit for states because
AMCs, unless they are owned and controlled by a federally regulated depository institution, are
barred from providing appraisal management services for federally related transactions in a state
that has not adopted the minimum AMC requirements.6 The FR HY-5 recordkeeping and
disclosure requirements are mandatory for an AMC that is (1) an appraisal management
company that is a subsidiary owned and controlled by a financial institution and regulated by a
6

12 U.S.C. § 3353.

3

federal financial institution regulatory agency, 7 or (2) is registered with a state that has a state
appraiser certifying and licensing agency.
The Federal Reserve does not collect information subject to the FR HY-5 recordkeeping
and disclosure requirements. If information subject to the FR HY-5 requirements is obtained as
part of an examination or supervision of a financial institution, it may be considered confidential
under exemption 8 of the Freedom of Information Act (FOIA) (5 U.S.C. § 552(b)(8)).
Information subject to the FR HY-5 requirements may also be kept confidential under the FOIA
exemption 4 if it is confidential commercial or financial information that is both customarily and
actually treated as private (5 U.S.C. § 552(b)(4)).
Consultation Outside the Agency
The Board, OCC, FDIC, and FHFA collaborated in reassessing and confirming their
burden estimates and methodologies for this submission and discussed potential improvements
and evaluations for future submissions.
Public Comments
On December 3, 2021, the Board published an initial notice in the Federal Register (86
FR 68664) requesting public comment for 60 days on the extension, without revision, of the
FR HY-5. The comment period for this notice expired on February 1, 2022. The Board did not
receive any comments. The Board adopted the extension, without revision, of the FR HY-5 as
originally proposed. On April 6, 2022, the Board published a final notice in the Federal Register
(87 FR 19930).
Estimate of Respondent Burden
As shown in the table below, the estimated total annual burden for the FR HY-5 is 2,508
hours. The Board’s estimated number of respondents and burden hours for sections 225.192 (b),
225.193(a), 225.193(b), and 225.195(c) are based on a percentage of the total estimated number
of respondents for the agencies, which all have identical requirements. 8 These recordkeeping and
disclosure requirements represent less than 1 percent of the Board’s total paperwork burden.

7

12 U.S.C. § 3353(c).
The total burden hours and respondents for sections 225.192, 225.193, and 225.195 are split between the Board,
OCC, FDIC, and FHFA in a ratio of 3:3:3:1. The basis for this methodology is explained in full detail in a memo
from the Division of Insurance and Research at the FDIC, which the Board will submit to OMB as part of the
clearance package for this collection of information. The Board accounts for disclosure burden associated with
section 225.196 and the other agencies do not. The Board plans to coordinate with the ASC to confirm that the
burden associated with section 225.196 is accounted for by the ASC’s own information collection (Reporting
Information for the AMC Registry; OMB No. 3139-0009).
8

4

FR HY-5
Recordkeeping
Section 225.193(a)
Registration and supervision
program
Disclosure
Section 225.192(b)
Written notice of appraiser
removal from network or panel
Section 225.193(b)
State regulated AMC
reporting requirements
Section 225.195(c)
Federally regulated AMC
reporting requirements
Section 225.196
State reporting requirements
to the ASC
Total

Estimated
number of
respondents9

Estimated
Estimated
Annual
average hours annual burden
frequency
per response
hours

1

1

40

40

1,239

1

0.08

1,146

2

1

2,292

13

2

1

26

51 10

1

1

51
2,508

99

The estimated total annual cost to the public for the FR HY-5 is $151,609.11
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines, although it is possible that a participating state could ask questions of a
sensitive nature pursuant to its authority to require an application or report from an AMC, or that
a participating state may report sensitive information to the ASC pursuant to the requirement that
the state report violations of appraisal-related laws, regulations, or orders, and disciplinary and
enforcement actions.

9

Using North American Industry Classification System (NAICS) code 531320, of these respondents, none of
section 225.193(a), 964 of section 225.192(b), 891 of section 225.193(b), 9 of section 225.195(c), and none of
section 225.196 are considered small entities as defined by the Small Business Administration (i.e., entities with less
than $8 million in total assets), https://www.sba.gov/document/support--table-size-standards. There are no special
accommodations given to mitigate the burden on small institutions.
10
All 50 states and the District of Columbia are reported as participating states according to the ASC.
11
Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (30% Office & Administrative Support at $21, 45% Financial Managers at
$74, 15% Lawyers at $71, and 10% Chief Executives at $102). Hourly rates for each occupational group a re the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and
Wages, May 2021, published March 31, 2022, https://www.bls.gov/news.release/ocwage.t01.htm. Occupations are
defined using the BLS Standard Occupational Classification System, https://www.bls.gov/soc/.

5

Estimate of Cost to the Federal Reserve System
The estimated cost to the Federal Reserve System for collecting and processing this
information collection is negligible.

6