Thursday, 29 September 2022 | The Latest Buzz for the Appraisal Industry

Appraisers Have a PAL on the Hill

Last year, bipartisan legislation (HR 7688) introduced by Reps. David Kustoff (R-Tenn.) and Earl Perlmutter (D-Colo.) proposed to ease regulatory burdens on appraisers by creating a new mechanism for completing or processing appraisal license applications. The Portal for Appraisal Licensure, or “PAL Act,” would authorize the Appraisal Subcommittee to work with state appraiser regulatory agencies to create a central portal for appraisers to submit and manage their state license and certification applications. This tool is envisioned to streamline tedious application processes facing many appraisers today such as the completion of background checks and submission of education records.

In recent years, many states and financial institutions have imposed layers of background check obligations on appraisers. Some of these requirements are not necessarily targeted at the appraisal community, but more generally toward third-party “vendors” of financial services institutions. Bank and consumer regulators have wanted to ensure banks are working with vetted professionals. Still, the effect is an increased regulatory burden on appraisers, who can find themselves having to submit to multiple background check processes from both state regulatory agencies and clients (banks and appraisal management companies).

Under the PAL Act, the Appraisal Subcommittee would establish a pass-through for a centralized FBI level background check that states could utilize in their review of applications by appraisers. This would function similarly to the Nationwide Multistate Licensing System administered by the Conference of State Bank Supervisors for the mortgage origination community. In sum, the PAL Act would lay the foundation for “one stop shopping” for background check information for appraisers. But it would not stop there – the PAL Act would also have the additional benefit of satisfying obligations regulated financing institutions have in complying with the third-party oversight imposed by federal bank and consumer regulatory agencies. This provision alone would streamline one of the most challenging aspects of license renewal and client relations processes facing appraisers.

Another benefit involves the central clearinghouse for appraiser education completion records so that states can pull down and review education records from across the country. Right now, this process is conducted piecemeal or on a state-by-state basis and wholly on the shoulders of appraisers and education providers. By offering a clearinghouse of this information for states to access and review, the PAL Act would be positioned to be the end-to-end solution for all parties to the license application process (appraisers, regulators, education providers, etc.) to maintain information. This is increasingly important as recent statistics have shown that the practice areas for appraisers are more frequently crossing state lines.

While the PAL Act has the potential to benefit appraisers with multi-state licenses, these provisions would be beneficial to all appraisal practitioners. The Appraisal Institute expects several appraisal related provisions that were introduced or considered in the last two years to be re-introduced in the 117th Congress. All indications are that the PAL Act will be part of that combination of bills. Considering the bipartisan nature of the bill, and the logical advancements of the appraisal regulatory structure, we believe the PAL Act will garner strong interest and support of members of Congress and the new Biden administration.

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  1. The writing in the article is great, but the substance sounds like GASLIGHTING horseshit to me.

    “The Portal for Appraisal Licensure, or “PAL Act,” would authorize the Appraisal Subcommittee to work with state appraiser regulatory agencies to create a central portal for appraisers to submit and manage their state license and certification applications. This tool is envisioned to streamline tedious application processes facing many appraisers today such as the completion of background checks and submission of education records.”

    Tedious? Tedious?! ???? Wtf? No, I don’t think it was tedious at all. It felt correct. After 16 years of schooling, concentrated in real estate, a third-generation real estate appraiser, I was quite proud to show off the achievements I had earned during the application process. And I use the term application process loosely. I fill out my application, I submit a fingerprint card, I write a check. How tedious is that?

    This sounds like The Fed wants to take control of appraisers in each state and federalize appraisers. Which is a mistake! By far! I’m biting my tongue here, I’ll try and keep this family friendly. Do you think Appraisals in Miami, FL are anything similar to Podunk, KY? They are not. I can testify to that first hand. Each state has different nuances, which would be lost in a generalization of a new “federal appraisal license“.

    The federal government is too fat and over bloated as it is. Leave the licensure alone. ????????

  2. For reference, HERE is the link to the Bill H.R. 7688 – Portal for Appraisal Licensing Act of 2020

    This is coming from the Appraisal Subcommittee / ASC.
    1. The ASC will be responsible;
    “The Appraisal Subcommittee shall establish and maintain a cloud-based system to be called the ‘Portal for Appraiser Credentialing and AMC Registration Information’”

    2. This portal will not only be a central place for appraisers to pay renewal fees and renew licenses, it will connect to your state agency and include all your information;

    “shall provide connectivity with State appraiser certifying and licensing agencies for their access to all application and renewal information, including completed qualifying and continuing education, experience logs, examination results, background check information, where applicable, and ANY OTHER INFORMATION THE APPRAISAL SUBCOMMITTEE DETERMINES APPROPRIATE (after consideration of any advice from the advisory committee established under paragraph (6));” *Emphasis mine.

    3. Regarding a centralized background check location;
    “To the extent FBI criminal history background checks are required under the laws of a State, appraisers and any other person that may require such a background check shall SUBMIT FINGERPRINTS TO THE PORTAL and authorize the Appraisal Subcommittee to process a criminal background check with the Federal Bureau of Investigation.” *Emphasis mine.

    4. Appraisers will be given a unique identifier;
    UNIQUE IDENTIFIERS.—The Appraisal Subcommittee shall use a unique identifier to identify each individual who submits an application through the Portal or otherwise makes use of the Portal.”

    5. Appraisers will pay a user fee for this portal;
    “USER FEES.—For the sole purpose of paying for the cost of establishing and maintaining the Portal and carrying out the background checks required under paragraph (2)(A), the Appraisal Subcommittee may charge a reasonable fee to individuals and appraisal management companies making use of the Portal. The fee shall be revenue neutral to the costs of developing and maintaining the Portal.”

    So, let me see if I’m getting this…WE pay additional fees above our states fees to have a place where all of our data is stored and maintained, that will basically be used for the convenience of OTHERS. And most likely will eventually REPLACE our individual state agencies, and will definitely turn into another federal agency to regulate us, that we will NOT have nearly as much access to OR INFLUENCE ON as our individual state legislators.

    6. IMO…this will lead to the eventual ending of state regulations and licensing laws as well as end state Professional Appraisal Organizations who have worked so hard to influence their state’s laws as they relate to Appraisers.

    7. The premise that this will be for the good of Appraisers is bull. WE don’t NEED a national, federal, centralized agency. The ones looking to CONTROL us do. Once it’s all in the hands of a federal agency, can you imagine how corrupt it could become? Geeeeez.

    Remember; The Professional Appraiser is the ONLY party in a mortgage transaction that is UNBIASED, NEUTRAL, and has no direct benefit or interest in the mortgage loan. For a long time now, WE have been considered to be an obstacle to be overcome by those who DO benefit directly from a loan closing.

    BUT….WE PROTECT THE PUBLIC. Appraisers need to really get a hold of that fact and start acting like it.

    But hey….maybe that’s just me. ¯\_(ツ)_/¯


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