Real Estate Appraisals

Published date17 April 2020
Citation85 FR 21312
Record Number2020-08216
SectionRules and Regulations
CourtFederal Deposit Insurance Corporation,The Comptroller Of The Currency Office
Federal Register, Volume 85 Issue 75 (Friday, April 17, 2020)
[Federal Register Volume 85, Number 75 (Friday, April 17, 2020)]
                [Rules and Regulations]
                [Pages 21312-21318]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-08216]
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                DEPARTMENT OF THE TREASURY
                Office of the Comptroller of the Currency
                12 CFR Part 34
                [Docket No. OCC-2020-0014]
                RIN 1557-AE86
                FEDERAL RESERVE SYSTEM
                12 CFR Part 225
                [Docket No. R-1713]
                RIN 7100-AF87
                FEDERAL DEPOSIT INSURANCE CORPORATION
                12 CFR Part 323
                RIN 3064-AF48
                Real Estate Appraisals
                AGENCY: Office of the Comptroller of the Currency, Treasury (OCC);
                Board of Governors of the Federal Reserve System (Board); and the
                Federal Deposit Insurance Corporation (FDIC).
                ACTION: Interim final rule with request for comments.
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                SUMMARY: The OCC, Board, and FDIC (collectively, the agencies) are
                adopting an interim final rule to amend the agencies' regulations
                requiring appraisals of real estate for certain transactions. The
                interim final rule defers the requirement to obtain an appraisal or
                evaluation for up to 120 days following the closing of a transaction
                for certain residential and commercial real estate transactions,
                excluding transactions for acquisition, development, and construction
                of real estate. Regulated institutions should make best efforts to
                obtain a credible valuation of real property collateral before the loan
                closing, and otherwise underwrite loans consistent with the principles
                in the agencies' Standards for Safety and Soundness and Real Estate
                Lending Standards. The agencies are providing this relief to allow
                regulated institutions to expeditiously extend liquidity to
                creditworthy households and businesses in light of recent strains on
                the U.S. economy as a result of the National Emergency declared in
                connection with coronavirus disease 2019 (COVID-19).
                DATES: The interim final rule is effective April 17, 2020 through
                December 31, 2020. Comments on the interim final rule must be received
                no later than June 1, 2020.
                ADDRESSES: Interested parties are encouraged to submit written comments
                [[Page 21313]]
                jointly to all of the agencies. Commenters are encouraged to use the
                title ``Real Estate Appraisals'' to facilitate the organization and
                distribution of comments among the agencies. Comments should be
                directed to:
                 OCC: Commenters are encouraged to submit comments through the
                Federal eRulemaking Portal or email, if possible. Please use the title
                ``Real Estate Appraisals'' to facilitate the organization and
                distribution of the comments. You may submit comments by any of the
                following methods:
                 Federal eRulemaking Portal--Regulations.gov Classic or
                Regulations.gov Beta:
                 Regulations.gov Classic: Go to https://www.regulations.gov/. Enter
                ``Docket ID OCC-2020-0014'' in the Search Box and click ``Search.''
                Click on ``Comment Now'' to submit public comments. For help with
                submitting effective comments please click on ``View Commenter's
                Checklist.'' Click on the ``Help'' tab on the Regulations.gov home page
                to get information on using Regulations.gov, including instructions for
                submitting public comments.
                 Regulations.gov Beta: Go to https://beta.regulations.gov/ or click
                ``Visit New Regulations.gov Site'' from the Regulations.gov Classic
                homepage. Enter ``Docket ID OCC-2020-0014'' in the Search Box and click
                ``Search.'' Public comments can be submitted via the ``Comment'' box
                below the displayed document information or by clicking on the document
                title and then clicking the ``Comment'' box on the top-left side of the
                screen. For help with submitting effective comments please click on
                ``Commenter's Checklist.'' For assistance with the Regulations.gov Beta
                site, please call (877) 378-5457 (toll free) or (703) 454-9859 Monday-
                Friday, 9 a.m.-5 p.m. ET or email [email protected].
                 Email: [email protected].
                 Mail: Chief Counsel's Office, Attention: Comment
                Processing, Office of the Comptroller of the Currency, 400 7th Street
                SW, Suite 3E-218, Washington, DC 20219.
                 Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218,
                Washington, DC 20219.
                 Fax: (571) 465-4326.
                 Instructions: You must include ``OCC'' as the agency name and
                ``Docket ID OCC-2020-0014'' in your comment. In general, the OCC will
                enter all comments received into the docket and publish the comments on
                the Regulations.gov website without change, including any business or
                personal information provided such as name and address information,
                email addresses, or phone numbers. Comments received, including
                attachments and other supporting materials, are part of the public
                record and subject to public disclosure. Do not include any information
                in your comment or supporting materials that you consider confidential
                or inappropriate for public disclosure.
                 You may review comments and other related materials that pertain to
                this rulemaking action by any of the following methods:
                 Viewing Comments Electronically--Regulations.gov Classic
                or Regulations.gov Beta:
                 Regulations.gov Classic: Go to https://www.regulations.gov/. Enter
                ``Docket ID OCC-2020-0014'' in the Search box and click ``Search.''
                Click on ``Open Docket Folder'' on the right side of the screen.
                Comments and supporting materials can be viewed and filtered by
                clicking on ``View all documents and comments in this docket'' and then
                using the filtering tools on the left side of the screen. Click on the
                ``Help'' tab on the Regulations.gov home page to get information on
                using Regulations.gov. The docket may be viewed after the close of the
                comment period in the same manner as during the comment period.
                 Regulations.gov Beta: Go to https://beta.regulations.gov/ or click
                ``Visit New Regulations.gov Site'' from the Regulations.gov Classic
                homepage. Enter ``Docket ID OCC-2020-0014'' in the Search Box and click
                ``Search.'' Click on the ``Comments'' tab. Comments can be viewed and
                filtered by clicking on the ``Sort By'' drop-down on the right side of
                the screen or the ``Refine Results'' options on the left side of the
                screen. Supporting materials can be viewed by clicking on the
                ``Documents'' tab and filtered by clicking on the ``Sort By'' drop-down
                on the right side of the screen or the ``Refine Results'' options on
                the left side of the screen.'' For assistance with the Regulations.gov
                Beta site, please call (877) 378-5457 (toll free) or (703) 454-9859
                Monday-Friday, 9 a.m.-5 p.m. ET or email
                [email protected].
                 The docket may be viewed after the close of the comment period in
                the same manner as during the comment period.
                 Board: You may submit comments, identified by Docket No. R-1713;
                RIN 7100-AF87, by any of the following methods:
                 Agency website: http://www.federalreserve.gov. Follow the
                instructions for submitting comments at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm.
                 Email: [email protected]. Include docket
                and RIN numbers in the subject line of the message.
                 FAX: (202) 452-3819 or (202) 452-3102.
                 Mail: Ann E. Misback, Secretary, Board of Governors of the
                Federal Reserve System, 20th Street and Constitution Avenue NW,
                Washington, DC 20551.
                 All public comments will be made available on the Board's website
                at http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as
                submitted, unless modified for technical reasons or to remove
                personally identifiable information at the commenter's request.
                Accordingly, comments will not be edited to remove any identifying or
                contact information. For security reasons, the Board requires that
                visitors make an appointment to inspect comments. You may do so by
                calling (202) 452-3684.
                 FDIC: You may submit comments, identified by RIN 3064-AF48, by any
                of the following methods:
                 Agency Website: https://www.fdic.gov/regulations/laws/federal/. Follow the instructions for submitting comments on the Agency
                website.
                 Email: [email protected]. Include the RIN 3064-AF48 in the
                subject line of the message.
                 Mail: Robert E. Feldman, Executive Secretary, Attention:
                Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th
                Street NW, Washington, DC 20429.
                 Instructions: Comments submitted must include ``FDIC'' and ``RIN
                3064-AF48.'' Comments received will be posted without change to https://www.fdic.gov/regulations/laws/federal/, including any personal
                information provided.
                FOR FURTHER INFORMATION CONTACT:
                 OCC: G. Kevin Lawton, Appraiser (Real Estate Specialist), (202)
                649-6670; Mitchell Plave, Special Counsel, (202) 649-5490; or Joanne
                Phillips, Counsel, Chief Counsel's Office (202) 649-5500; Office of the
                Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219.
                For persons who are deaf or hearing impaired, TTY users may contact
                (202) 649-5597.
                 Board: Anna Lee Hewko, Associate Director, (202) 530-6260; Teresa
                A. Scott, Manager, Policy Development Section, (202) 973-6114; Carmen
                Holly, Lead Financial Institution Policy Analyst, (202) 973-6122,
                Division of Supervision and Regulation; Laurie Schaffer, Deputy General
                Counsel, (202) 452-2272; Derald Seid, Senior Counsel, (202) 452-2246;
                Trevor Feigleson,
                [[Page 21314]]
                Senior Attorney, (202) 452-3274; David Imhoff Legal Assistant/Attorney,
                (202) 452-2249, Legal Division, Board of Governors of the Federal
                Reserve System, 20th and C Streets NW, Washington, DC 20551. For the
                hearing impaired only, Telecommunications Device for the Deaf (TDD)
                users may contact (202) 263-4869.
                 FDIC: Beverlea S. Gardner, Senior Examination Specialist, Division
                of Risk Management and Supervision, (202) 898-3640, [email protected];
                Benjamin K. Gibbs, Counsel, Legal Division, (202) 898-6726; Mark
                Mellon, Counsel, Legal Division, (202) 898-3884; or, Lauren Whitaker,
                Senior Attorney, Legal Division, (202) 898-3872, Federal Deposit
                Insurance Corporation, 550 17th Street NW, Washington, DC 20429. For
                the hearing impaired only, TDD users may contact (202) 925-4618.
                SUPPLEMENTARY INFORMATION:
                Table of Contents
                I. Introduction
                 A. Background
                 B. Summary of the Interim Final Rule
                II. The Interim Final Rule
                III. Effective Date
                IV. Administrative Law Matters
                 A. Administrative Procedure Act
                 B. Congressional Review Act
                 C. Paperwork Reduction Act
                 D. Regulatory Flexibility Act Analysis
                 E. Riegle Community Development and Regulatory Improvement Act
                of 1994
                 F. Solicitation of Comments on Use of Plain Language
                 G. OCC Unfunded Mandates Reform Act of 1995 Determination
                I. Introduction
                A. Background
                 Impact of COVID-19 on appraisals and evaluations. Due to the impact
                of COVID-19, businesses and individuals have a heightened need for
                additional liquidity. Being able to quickly access equity in real
                estate could help address this need. However, government restrictions
                on non-essential movement and health and safety advisories in response
                to the National Emergency declared in connection with COVID-19,\1\
                including those relating to social distancing, have led to
                complications with respect to performing and completing real property
                appraisals and evaluations needed to comply with federal appraisal
                regulations. As a result, some borrowers may experience delays in
                obtaining funds needed to meet immediate and near-term financial needs.
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                 \1\ Proclamation 9994, 85 FR 15337 (March 18, 2020).
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                 Title XI and the appraisal regulations. Title XI directs each
                Federal financial institutions regulatory agency to publish appraisal
                regulations for federally related transactions within its
                jurisdiction.\2\ The purpose of Title XI is to protect federal
                financial and public policy interests \3\ in real estate-related
                transactions by requiring that real estate appraisals used in
                connection with federally related transactions (Title XI appraisals)
                are performed in writing, in accordance with uniform standards, by
                individuals whose competency has been demonstrated and whose
                professional conduct will be subject to effective supervision.\4\
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                 \2\ The term ``Federal financial institutions regulatory
                agencies'' means the Board, the FDIC, the OCC, the National Credit
                Union Administration, and, formerly, the Office of Thrift
                Supervision. 12 U.S.C. 3350(6).
                 \3\ These interests include those stemming from the federal
                government's roles as regulator and deposit insurer of financial
                institutions that engage in real estate lending and investment,
                guarantor or lender on mortgage loans, and as a direct party in real
                estate-related financial transactions. These federal financial and
                public policy interests have been described in predecessor
                legislation and accompanying Congressional reports. See Real Estate
                Appraisal Reform Act of 1988, H.R. Rep. No. 100-1001, pt. 1, at 19
                (1988); 133 Cong. Rec. 33047-33048 (1987).
                 \4\ 12 U.S.C. 3331.
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                 Title XI directs the agencies to prescribe appropriate standards
                for Title XI appraisals under the agencies' respective
                jurisdictions.\5\ At a minimum, the statute provides that a Title XI
                appraisal must be: (1) Performed in accordance with the Uniform
                Standards of Professional Appraisal Practice (USPAP); (2) a written
                appraisal, as defined by the statute; and (3) subject to appropriate
                review for compliance with USPAP.\6\ While appraisals are ordinarily
                completed before a lender and borrower close a real estate transaction,
                there is no specific requirement in USPAP that appraisals be completed
                at a specific time relative to the closing of a transaction.
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                 \5\ 12 U.S.C. 3339.
                 \6\ Id.
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                 All federally related transactions must have Title XI appraisals.
                Title XI defines a federally related transaction as a real estate-
                related financial transaction \7\ that the agencies or a financial
                institution regulated by the agencies engages in or contracts for, that
                requires the services of an appraiser.\8\ The agencies have authority
                to determine those real estate-related financial transactions that do
                not require the services of an appraiser and thus are not required to
                have Title XI appraisals.\9\ The agencies have exercised this authority
                by exempting certain categories of real estate-related financial
                transactions from the agencies' appraisal requirements.\10\
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                 \7\ 12 U.S.C. 3350(5). A real estate-related financial
                transaction is defined as any transaction that involves: (i) The
                sale, lease, purchase, investment in or exchange of real property,
                including interests in property, or financing thereof; (ii) the
                refinancing of real property or interests in real property; and
                (iii) the use of real property or interests in property as security
                for a loan or investment, including mortgage-backed securities.
                 \8\ 12 U.S.C. 3350(4).
                 \9\ Real estate-related financial transactions that the agencies
                have exempted from the appraisal requirement are not federally
                related transactions under the agencies' appraisal regulations.
                 \10\ See OCC: 12 CFR 34.43(a); Board: 12 CFR 225.63(a); FDIC: 12
                CFR 323.3(a). The agencies have determined that these categories of
                transactions do not require appraisals by state certified or state
                licensed appraisers in order to protect federal financial and public
                policy interests or to satisfy principles of safe and sound banking.
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                 The agencies have used their safety and soundness authority to
                require evaluations for a subset of transactions for which an appraisal
                is not required.\11\ Under the appraisal regulations, for these
                transactions, financial institutions that are subject to the agencies'
                appraisal regulations (regulated institutions) must obtain an
                appropriate evaluation of real property collateral that is consistent
                with safe and sound banking practices.\12\
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                 \11\ See OCC: 12 CFR 34.43(b); Board: 12 CFR 225.63(b); and
                FDIC: 12 CFR 323.3(b). Evaluations are required for exempt
                residential and commercial loans below the thresholds; exempt
                business loans; exempt subsequent transactions; and transactions
                subject to the rural residential exemption.
                 \12\ The agencies have provided guidance on appraisals and
                evaluations through the Interagency Guidelines on Appraisals and
                Evaluations. See 75 FR 77450 (December 10, 2010), available at
                https://occ.gov/news-issuances/federal-register/2010/75fr77450.pdf.
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                 Authority to defer appraisals and evaluations. In general, the
                agencies require that Title XI appraisals for federally related
                transactions occur prior to closing of a federally related
                transaction.\13\ The Interagency Guidelines on Appraisals and
                Evaluations provide similar information about evaluations.\14\ Under
                the interim final rule, deferrals of appraisals and evaluations will
                allow for expeditious access to credit. The deferrals, which will be
                temporary, are offered in response to a National Emergency. Regulated
                institutions that defer receipt of an appraisal or evaluation are still
                expected to conduct their lending
                [[Page 21315]]
                activity consistent with the underwriting principles in the agencies'
                Standards for Safety and Soundness \15\ and Real Estate Lending
                Standards \16\ that focus on the ability of a borrower to repay a loan
                and other relevant laws and regulations. These deferrals are not an
                exercise of the agencies' waiver authority, because appraisals and
                evaluations are being deferred, not waived. The deferrals are also not
                a waiver of USPAP requirements, given that (1) USPAP does not address
                the completion of an appraisal assignment with the timing of a lending
                decision; and (2) the deferred appraisal must be conducted in
                compliance with USPAP.
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                 \13\ See OCC: 12 CFR 34.43(a), 34.44(b)&(e); Board: 12 CFR
                225.63(a), 225.64(b)&(e); FDIC: 12 CFR 323.3(a), 323.4(b)&(e)
                (requiring an appraisal to (1) contain sufficient information and
                analysis to support the institution's decision to engage in the
                transaction, and (2) be based on the definition of market value in
                the regulation, which takes into account a specified closing date
                for the transaction).
                 \14\ See 75 FR 77450 (December 10, 2010), available at https://occ.gov/news-issuances/federal-register/2010/75fr77450.pdf.
                 \15\ OCC: 12 CFR part 30, Appendix A; Board: 12 CFR 208,
                Appendix D-1; and FDIC: 12 CFR part 364, Appendix A.
                 \16\ OCC: 12 CFR part 34, subpart D, Appendix A; Board: 12 CFR
                208, Subpart E, Appendix C; and FDIC: 12 CFR part 365, subpart A,
                Appendix A. Financial institutions should have a program for
                establishing the market value of real property to comply with these
                real estate lending standards, which require financial institutions
                to determine the value used in loan-to-value calculations based in
                part on a value set forth in an appraisal or an evaluation.
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                 The deferral of evaluations reflects the same considerations
                relating to the impact of COVID-19 as the deferral of appraisals. The
                agencies require evaluations for certain exempt transactions as a
                matter of safety and soundness. Evaluations do not need to comply with
                USPAP, but must be sufficiently robust to support a valuation
                conclusion. An evaluation can be less complex than an appraisal and
                usually takes less time to complete than an appraisal, but it also
                commonly involves physical property inspections. For these reasons, the
                agencies also are using their safety and soundness authority \17\ to
                allow for deferral of evaluations.
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                 \17\ See 12 U.S.C. 1831p-1.
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                 By the end of the deferral period, regulated institutions must
                obtain appraisals or evaluations that are consistent with safe and
                sound banking practices, as required by the agencies' appraisal
                regulations.
                B. Summary of the Interim Final Rule
                 The interim final rule allows a temporary deferral of the
                requirements for appraisals and evaluations under the agencies'
                appraisal regulations. The deferrals apply to both residential and
                commercial real estate-related financial transactions, excluding
                transactions for acquisition, development, and construction of real
                estate. The agencies are excluding transactions for acquisition,
                development, and construction of real estate because these loans
                present heightened risks not associated with financing existing real
                estate.
                 Under the interim final rule, regulated institutions may close a
                real estate loan without a contemporaneous appraisal or evaluation,
                subject to a requirement that institutions obtain the appraisal or
                evaluation, as would have been required under the appraisal regulations
                without the deferral, within a grace period of 120 days after closing
                of the transaction. While appraisals and evaluations can be deferred,
                the agencies expect institutions to use best efforts and available
                information to develop a well-informed estimate of the collateral value
                of the subject property. For purposes of risk-weighting of residential
                mortgage exposures, an institution's prudent underwriting estimation of
                the collateral value of the subject property will be considered to meet
                the agencies' appraisal and evaluation requirements during the deferral
                period.\18\ In addition, the agencies continue to expect regulated
                institutions to adhere to internal underwriting standards for assessing
                borrowers' creditworthiness and repayment capacity, and to develop
                procedures for estimating the collateral's value for the purposes of
                extending or refinancing credit. Transactions for acquisition,
                development, and construction of real estate are being excluded because
                repayment of those transactions is generally dependent on the
                completion or sale of the property being held as collateral as opposed
                to repayment generated by existing collateral or the borrower. The
                agencies also expect institutions to develop an appropriate risk
                mitigation strategy if the appraisal or evaluation ultimately reveals a
                market value significantly lower than the expected market value. An
                institution's risk mitigation strategy should consider safety and
                soundness risk to the institution, balanced with mitigation of
                financial harm to COVID-19-affected borrowers. The temporary provision
                permitting regulated institutions to defer an appraisal or evaluation
                for eligible transactions will expire on December 31, 2020 (a
                transaction closed on or before December 31, 2020 is eligible for a
                deferral), unless extended by the agencies. The agencies believe that
                the limited timeframe for the deferral will in some respects help to
                manage potential risk by balancing the need for immediate relief due to
                the National Emergency with safety and soundness concerns for risk to
                lenders.
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                 \18\ See OCC: 12 CFR 3.32(g); Board: 12 CFR 217.32(g); FDIC: 12
                CFR 324.32(g).
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                II. Revisions to the Title XI Appraisal Regulations
                 The interim final rule adds a new, temporary provision to the
                appraisal regulations that provides a 120-day deferral of appraisal and
                evaluation requirements for all transactions secured by commercial or
                residential real estate during the COVID-19 pandemic, excluding
                transactions for acquisition, development, and construction of real
                estate. The interim final rule does not revise any of the existing
                appraisal exceptions or any other requirements with respect to the
                performance of evaluations.
                 The interim final rule will allow regulated institutions to quickly
                provide liquidity to owners of commercial and residential property. The
                temporary provision allowing regulated institutions to defer appraisals
                or evaluations for covered transactions will expire on December 31,
                2020, unless extended by the agencies.
                III. Effective Date
                 The interim final rule is effective April 17, 2020.
                IV. Administrative Law Matters
                A. Administrative Procedure Act
                 The agencies are issuing this interim final rule without prior
                notice and the opportunity for public comment and the 30-day delayed
                effective date ordinarily prescribed by the Administrative Procedure
                Act (APA).\19\ Pursuant to section 553(b)(B) of the APA, general notice
                and the opportunity for public comment are not required with respect to
                a rulemaking when an ``agency for good cause finds (and incorporates
                the finding and a brief statement of reasons therefor in the rules
                issued) that notice and public procedure thereon are impracticable,
                unnecessary, or contrary to the public interest.'' \20\
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                 \19\ 5 U.S.C. 553.
                 \20\ 5 U.S.C. 553(b)(B).
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                 The agencies believe that the public interest is best served by
                implementing the interim final rule as soon as possible. As discussed
                above, recent events have suddenly and significantly affected global
                economic activity, increasing businesses' and households' need to have
                timely access to liquidity from real estate equity. In addition, the
                spread of COVID-19 has greatly increased the difficulty of performing
                real estate appraisals and evaluations in a timely manner. This relief
                will allow regulated institutions to better focus on supporting lending
                to creditworthy households and businesses in light of recent strains on
                the U.S. economy as a
                [[Page 21316]]
                result of COVID-19, while reaffirming the safety and soundness
                principle that valuation of collateral is an essential part of the
                lending decision. For these reasons, the agencies find that there is
                good cause consistent with the public interest to issue the rule
                without advance notice and comment.\21\
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                 \21\ 5 U.S.C. 553(b)(B); 553(d)(3)
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                 The APA also requires a 30-day delayed effective date, except for
                (1) substantive rules which grant or recognize an exemption or relieve
                a restriction; (2) interpretative rules and statements of policy; or
                (3) as otherwise provided by the agency for good cause.\22\ Because the
                rules relieve a restriction, the interim final rule is exempt from the
                APA's delayed effective date requirement.\23\ Additionally, the
                agencies find good cause to publish the interim final rule with an
                immediate effective date for the same reasons set forth above under the
                discussion of section 553(b)(B) of the APA.
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                 \22\ 5 U.S.C. 553(d).
                 \23\ 5 U.S.C. 553(d)(1).
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                 While the agencies believe that there is good cause to issue the
                rule without advance notice and comment and with an immediate effective
                date, the agencies are interested in the views of the public and
                request comment on all aspects of the interim final rule.
                B. Congressional Review Act
                 For purposes of Congressional Review Act, the Office of Management
                and Budget (OMB) makes a determination as to whether a final rule
                constitutes a ``major'' rule.\24\ If a rule is deemed a ``major rule''
                by the OMB, the Congressional Review Act generally provides that the
                rule may not take effect until at least 60 days following its
                publication.\25\
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                 \24\ 5 U.S.C. 801 et seq.
                 \25\ 5 U.S.C. 801(a)(3).
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                 The Congressional Review Act defines a ``major rule'' as any rule
                that the Administrator of the Office of Information and Regulatory
                Affairs of the OMB finds has resulted in or is likely to result in (A)
                an annual effect on the economy of $100,000,000 or more; (B) a major
                increase in costs or prices for consumers, individual industries,
                Federal, State, or local government agencies or geographic regions, or
                (C) significant adverse effects on competition, employment, investment,
                productivity, innovation, or on the ability of United States-based
                enterprises to compete with foreign-based enterprises in domestic and
                export markets.\26\
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                 \26\ 5 U.S.C. 804(2).
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                 For the same reasons set forth above with respect to APA
                requirements, the agencies are adopting the interim final rule without
                the delayed effective date generally prescribed under the Congressional
                Review Act. The delayed effective date required by the Congressional
                Review Act does not apply to any rule for which an agency for good
                cause finds (and incorporates the finding and a brief statement of
                reasons therefor in the rule issued) that notice and public procedure
                thereon are impracticable, unnecessary, or contrary to the public
                interest.\27\ In light of households' and businesses' immediate need to
                access liquidity from real estate equity, combined with the difficulty
                of obtaining appraisals during the ongoing COVID-19 outbreak, the
                agencies believe that delaying the effective date of the rule would be
                contrary to the public interest.
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                 \27\ 5 U.S.C. 808(2).
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                 As required by the Congressional Review Act, the agencies will
                submit the final rule and other appropriate reports to Congress and the
                Government Accountability Office for review.
                C. Paperwork Reduction Act
                 In accordance with the requirements of the Paperwork Reduction Act
                of 1995 \28\ (PRA), the agencies may not conduct or sponsor, and a
                respondent is not required to respond to, an information collection
                unless it displays a currently valid OMB control number. The agencies
                have reviewed this final rule and determined that it would not
                introduce any new or revise any collection of information pursuant to
                the PRA. Therefore, no submissions will be made to OMB for review.
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                 \28\ 44 U.S.C. 3501-3521.
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                D. Regulatory Flexibility Act
                 The Regulatory Flexibility Act (RFA) \29\ generally requires that
                an agency to consider whether the rule it proposes will have a
                significant economic impact on a substantial number of small
                entities.\30\ The RFA applies only to rules for which an agency
                publishes a general notice of proposed rulemaking pursuant to 5 U.S.C.
                553(b).\31\ As discussed previously, consistent with section 553(b)(B)
                of the APA, the agencies have determined for good cause that general
                notice and opportunity for public comment is unnecessary, and therefore
                the agencies are not issuing a notice of proposed rulemaking.
                Accordingly, the agencies have concluded that the RFA's requirements
                relating to initial and final regulatory flexibility analysis do not
                apply.
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                 \29\ 5 U.S.C. 601 et seq.
                 \30\ 5 U.S.C. 604. Under regulations issued by the Small
                Business Administration, a small entity includes a depository
                institution, bank holding company, or savings and loan holding
                company with total assets of $600 million or less and trust
                companies with total assets of $41.5 million or less. See 13 CFR
                121.201.
                 \31\ 5 U.S.C. 604(a).
                ---------------------------------------------------------------------------
                 Nevertheless, the agencies seek comment on whether, and the extent
                to which, the interim final rule would affect a significant number of
                small entities.
                E. Riegle Community Development and Regulatory Improvement Act of 1994
                 Pursuant to section 302(a) of the Riegle Community Development and
                Regulatory Improvement Act (RCDRIA),\32\ in determining the effective
                date and administrative compliance requirements for new regulations
                that impose additional reporting, disclosure, or other requirements on
                insured depository institutions (IDIs), each Federal banking agency
                must consider, consistent with the principle of safety and soundness
                and the public interest, any administrative burdens that such
                regulations would place on depository institutions, including small
                depository institutions, and customers of depository institutions, as
                well as the benefits of such regulations. In addition, section 302(b)
                of RCDRIA requires new regulations and amendments to regulations that
                impose additional reporting, disclosure, or other new requirements on
                IDIs generally to take effect on the first day of a calendar quarter
                that begins on or after the date on which the regulations are published
                in final form, with certain exceptions, including for good cause.\33\
                The interim final rule would not impose any additional reporting,
                disclosure, or other new requirements on IDIs. Therefore, for the
                reasons described above, the agencies find good cause exists under
                section 302 of RCDRIA to publish this interim final rule with an
                immediate effective date. As such, the interim final rule will be
                effective on April 17, 2020. Nevertheless, the agencies seek comment on
                RCDRIA.
                ---------------------------------------------------------------------------
                 \32\ 12 U.S.C. 4802(a).
                 \33\ 12 U.S.C. 4802.
                ---------------------------------------------------------------------------
                F. Use of Plain Language
                 Section 722 of the Gramm-Leach-Bliley Act \34\ requires the Federal
                banking agencies to use plain language in all proposed and final rules
                published after January 1, 2000. The agencies have sought to present
                the final rule in a simple and straightforward manner and invite
                comments on whether there are additional steps the
                [[Page 21317]]
                agencies could take to make the rule easier to understand. For example:
                ---------------------------------------------------------------------------
                 \34\ 12 U.S.C. 4809.
                ---------------------------------------------------------------------------
                 Have the agencies organized the material to suit your
                needs? If not, how could this material be better organized?
                 Are the requirements in the regulation clearly stated? If
                not, how could the regulation be more clearly stated?
                 Does the regulation contain language or jargon that is not
                clear? If so, which language requires clarification?
                 Would a different format (grouping and order of sections,
                use of headings, paragraphing) make the regulation easier to
                understand? If so, what changes to the format would make the regulation
                easier to understand?
                 What else could we do to make the regulation easier to
                understand?
                G. OCC Unfunded Mandates Reform Act of 1995 Determination
                 As a general matter, the Unfunded Mandates Reform Act of 1995
                (UMRA), 2 U.S.C. 1531 et seq., requires the preparation of a budgetary
                impact statement before promulgating a rule that includes a Federal
                mandate that may result in the expenditure by State, local, and tribal
                governments, in the aggregate, or by the private sector, of $100
                million or more in any one year. However, the UMRA does not apply to
                final rules for which a general notice of proposed rulemaking was not
                published.\35\ Therefore, because the OCC has found good cause to
                dispense with notice and comment for this interim final rule, the OCC
                has not prepared an economic analysis of the rule under the UMRA.
                ---------------------------------------------------------------------------
                 \35\ See 2 U.S.C. 1532(a).
                ---------------------------------------------------------------------------
                List of Subjects
                12 CFR Part 34
                 Appraisal, Appraiser, Banks, Banking, Consumer protection, Credit,
                Mortgages, National banks, Reporting and recordkeeping requirements,
                Savings associations, Truth in lending.
                12 CFR Part 225
                 Administrative practice and procedure, Banks, banking, Federal
                Reserve System, Capital planning, Holding companies, Reporting and
                recordkeeping requirements, Securities, Stress testing
                12 CFR Part 323
                 Banks, banking, Mortgages, Reporting and recordkeeping
                requirements, Savings associations.
                DEPARTMENT OF THE TREASURY
                Office of the Comptroller of the Currency
                12 CFR Chapter I
                Authority and Issuance
                 For the reasons set forth in the joint preamble, the OCC amends
                part 34 of chapter I of title 12 of the Code of Federal Regulations as
                follows:
                PART 34--REAL ESTATE LENDING AND APPRAISALS
                0
                1. The authority citation for part 34 continues to read as follows:
                 Authority: 12 U.S.C. 1, 25b, 29, 93a, 371, 1462a, 1463, 1464,
                1465, 1701j-3, 1828(o), 3331 et seq., 5101 et seq., and
                5412(b)(2)(B), and 15 U.S.C. 1639h.
                0
                2. Section 34.43 is amended by adding paragraph (f) to read as follows:
                Sec. 34.43 Appraisals required; transactions requiring a State
                certified or licensed appraiser.
                * * * * *
                 (f) Deferrals of appraisals and evaluations for certain residential
                and commercial transactions--(1) 120-day grace period. The completion
                of appraisals and evaluations required under paragraphs (a) and (b) of
                this section may be deferred up to 120 days from the date of closing.
                 (2) Covered transactions. The deferrals authorized under paragraph
                (f)(1) of this section apply to all residential and commercial real
                estate-secured transactions, excluding transactions for acquisition,
                development, and construction of real estate.
                 (3) Sunset. The appraisal and evaluation deferrals authorized by
                this paragraph (f) will expire for transactions closing after December
                31, 2020.
                FEDERAL RESERVE BOARD
                12 CFR Chapter II
                Authority and Issuance
                 For the reasons set forth in the joint preamble, the Board amends
                part 225 of chapter II of title 12 of the Code of Federal Regulations
                as follows:
                PART 225--BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL
                (REGULATION Y)
                0
                 3. The authority citation for part 225 continues to read as follows:
                 Authority: 12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 1831p-1,
                1843(c)(8), 1844(b), 1972(l), 3106, 3108, 3310, 3331 et seq., 31206,
                31207, and 31209; 15 U.S.C. 1681s, 1681w, 6801 and 6805.
                0
                4. Section 225.63 is amended by adding paragraph (f) to read as
                follows:
                Sec. 225.63 Appraisals required; transactions requiring a State
                certified or licensed appraiser.
                * * * * *
                 (f) Deferrals of appraisals and evaluations for certain residential
                and commercial transactions--(1) 120-day grace period. The completion
                of appraisals and evaluations required under paragraphs (a) and (b) of
                this section may be deferred up to 120 days from the date of closing.
                 (2) Covered transactions. The deferrals authorized under paragraph
                (f)(1) of this section apply to all residential and commercial real
                estate-secured transactions, excluding transactions for acquisition,
                development, and construction of real estate.
                 (3) Sunset. The appraisal and evaluation deferrals authorized by
                this paragraph (f) will expire for transactions closing after December
                31, 2020.
                FEDERAL DEPOSIT INSURANCE CORPORATION
                12 CFR Chapter III
                Authority and Issuance
                 For the reasons set forth in the joint preamble, the FDIC amends
                part 323 of chapter III of title 12 of the Code of Federal Regulations
                as follows:
                PART 323--APPRAISALS
                0
                5. The authority citation for part 323 continues to read as follows:
                 Authority: 12 U.S.C. 1818, 1819(a) (``Seventh'' and ``Tenth''),
                1831p-1 and 3331 et seq.
                0
                6. Section 323.3 is amended by adding paragraph (g) to read as follows:
                Sec. 323.3 Appraisals required; transactions requiring a State
                certified or licensed appraiser.
                * * * * *
                 (g) Deferrals of appraisals and evaluations for certain residential
                and commercial transactions--(1) 120-day grace period. The completion
                of appraisals and evaluations required under paragraphs (a) and (b) of
                this section may be deferred up to 120 days from the date of closing.
                 (2) Covered transactions. The deferrals authorized under paragraph
                (g)(1) of this section apply to all residential and commercial real
                estate-secured transactions, excluding transactions for acquisition,
                development, and construction of real estate.
                 (3) Sunset. The appraisal and evaluation deferrals authorized by
                this
                [[Page 21318]]
                paragraph (g) will expire for transactions closing after December 31,
                2020.
                Brian P. Brooks,
                First Deputy Comptroller of the Currency.
                 By order of the Board of Governors of the Federal Reserve
                System, April 10, 2020.
                Ann Misback,
                Secretary of the Board.
                Federal Deposit Insurance Corporation.
                 By order of the Board of Directors.
                 Dated at Washington, DC, on or about April 10, 2020.
                Robert E. Feldman,
                Executive Secretary.
                [FR Doc. 2020-08216 Filed 4-16-20; 8:45 am]
                BILLING CODE 4810-33-P; 6210-01-P; 6714-01-P
                

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