Order Terminating Temporary Waiver Relief for the Commonwealth of the Northern Mariana Islands and Request for Comments

FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL

Appraisal Subcommittee

[Docket No. AS94-2]

Order Terminating Temporary Waiver Relief for the Commonwealth of

the Northern Mariana Islands and Request for Comments

AGENCY: Appraisal Subcommittee, Federal Financial Institutions

Examination Council.

ACTION: Order terminating temporary waiver relief and request for

comments.

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SUMMARY: The Appraisal Subcommittee (``ASC'') of the Federal Financial

Institutions Examination Council (``FFIEC'') is issuing an order

finding that a scarcity of certified or licensed appraisers resulting

in significant delays in obtaining the services of such appraisers no

longer exists in the Commonwealth of the Northern Mariana Islands

(``CNMI''). Therefore, the ASC is terminating the temporary waiver

relief from State appraiser certification and licensing requirements

granted CNMI in the ASC's Final Order Granting Commonwealth of the

Northern Mariana Islands Temporary Waiver Relief (``Relief Order''),

which was adopted on February 17, 1993, and published at 58 FR 11235

(February 24, 1993). In accordance with ASC rules and regulations, the

ASC is requesting comments from interested members of the public on

this action, and, in the absence of ASC action to the contrary, this

finding of waiver termination automatically will become final 21

calendar days after the close of the comment period. The ASC also is

extending the February 28, 1994 termination date stated in the Relief

Order to the final termination date specified below.

DATES: Comments must be submitted on or before April 18, 1994. This

Order will become final on May 9, 1994, unless the ASC takes further

action to the contrary.

ADDRESSES: Persons wishing to submit written comments should file them

with Edwin W. Baker, Executive Director, Appraisal Subcommittee, 2100

Pennsylvania Avenue, NW., suite 200, Washington, DC 20037. All comment

letters should refer to Docket No. AS94-2. All comments received will

be available for public inspection and copying at the above location.

FOR FURTHER INFORMATION CONTACT:

Edwin W. Baker, Executive Director, or Marc L. Weinberg, General

Counsel, at (202) 634-6520, Appraisal Subcommittee, 2100 Pennsylvania

Avenue, NW., suite 200, Washington, DC 20037.

SUPPLEMENTARY INFORMATION:

I. Background

A. Relevant Statutory Provisions and Regulations

As of January 1, 1993, Title XI of the Financial Institutions

Reform, Recovery, and Enforcement Act of 1989 (``FIRREA''), as

amended,\1\ required all federally regulated financial institutions to

use State licensed or certified real estate appraisers, as appropriate,

to perform appraisals in federally related transactions. See Section

1119(a) of Title XI, 12 U.S.C. 3348(a). Thus, each State, territory and

the District of Columbia (``State'') should have had in place at that

time its entire regulatory scheme for certifying, licensing and

supervising real estate appraisers.

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\1\Pub. L. 101-73, 103 Stat. 183 (1989), as amended by Pub. L.

102-233, 105 Stat. 1761, 1792, (1991), Pub. L. 102-242, 105 Stat.

2330, 2386 (1991), Pub. L. 102-550, 106 Stat. 3672 (1992), and Pub.

L. 102-485, 106 Stat. 2771 (1992).

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Section 1119(b) of Title XI, 12 U.S.C. 3348(b), provides the ASC

and the States with a degree of flexibility in dealing with

extraordinary circumstances that may occur. The Section enables the ASC

to waive, on a temporary basis and with the FFIEC's concurrence, any

State certification or licensing requirement on a written finding that:

(1) ``There is a scarcity of certified or licensed appraisers to

perform appraisals in connection with federally related transactions'';

and (2) that the scarcity is ``leading to significant delays in the

performance of such appraisals.'' Temporary waivers terminate when the

ASC ``determines that such * * * delays have been eliminated.''

ASC Rule 1102.2, 12 CFR 1102.2 (1993), requires a State appraiser

regulatory agency (``State agency'') to address seven informational

areas when requesting temporary waiver relief. The ASC then must

publish a notice in the Federal Register respecting the received

request and must give interested persons 30 calendar days from its

publication in which to submit written comments. The ASC must grant or

deny a waiver in whole, in part, or upon specific terms and conditions,

within 45 calendar days of the date of publication of the notice in the

Federal Register. The ASC retains significant flexibility in the case

of an emergency.

Rule 1102.7, 12 CFR 1102.7 (1993), relates to the termination of

temporary waiver orders. The ASC at any time may terminate such an

order on a finding that: (1) The ``significant delays in obtaining''

certified or licensed appraiser services ``no longer exist''; or (2)

the ``terms and conditions of the waiver order are not being

satisfied.'' The ASC is required under the Rule to publish its waiver

termination finding in the Federal Register and to solicit public

comments on the finding for at least 30 calendar days. Absent further

ASC action, the finding becomes final automatically 21 calendar days

after the end of the commend period.\2\

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\2\Rule 1102.6, 12 CFR 1102.6, allows the ASC to initiate an

extension of temporary waiver relief and enables a State agency to

request such an extension in writing. Such a request is subject to

all the requirements of 12 CFR part 1102, subpart A, and therefore

is processed in the same manner as an initial temporary waiver

request. CNMI has not requested such an extension.

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B. Procedural Status

On December 21, 1992, the ASC received a letter of December 16,

1992, from CNMI's Governor requesting a one-year waiver, from January 1

through December 31, 1993, of the requirement to use certified or

licensed real estate appraisers within CNMI. Because of the immediacy

of the January 1, 1993 implementation date of Title XI and the facts

represented in the Governor's letter, the ASC, on December 31, 1992,

issued an order both granting CNMI emergency interim temporary waiver

relief and soliciting public comment on the request. The interim order

was published in the Federal Register on January 6, 1993 at 58 FR 551.

No comments were received, and the ASC approved the issuance of the

Relief Order on February 17, 1993. The next day, the Chairman of the

FFIEC, pursuant to delegated authority, concurred in the ASC's

determination, and the Relief Order was published in the Federal

Register on February 24, 1993. The ASC found that a scarcity of State

certified and licensed appraisers existed on CNMI and that significant

delays in obtaining the services of such appraisers were being

experienced. Accordingly, the ASC ordered temporary waiver relief for

CNMI for the period of February 22, 1993, through February 28, 1994,

subject to three conditions described below.

During the period of temporary waiver relief, the federally

regulated lenders specified in Section 1120 of Title XI, 12 U.S.C.

3349, could use appraisers who are not licensed or certified so long as

appraisals are performed in a manner that is consistent with the

appraisal regulations, requirements, guidelines and standards of the

appropriate Federal financial institutions regulatory agency, as

defined in section 1122(6) of Title XI, 12 U.S.C. 3350(6).

III. Compliance With the Relief Order

CNMI, through its Board of Professional Licensing (``Board''), has

fully complied with the three conditions of the Relief Order.

Specifically, CNMI has taken appropriate steps during the temporary

waiver period to alleviate the scarcity of State certified and licensed

appraisers in CNMI and the significant delays in obtaining the services

of those appraisers and has provided the ASC the three required

monitoring reports on a timely basis. In addition, CNMI undertook to

notify the ASC promptly of any circumstances that might adversely

affect CNMI's compliance with the Relief Order.

According to CNMI's monitoring reports and other contacts between

the ASC and the Board, the Board contracted with a firm on March 26,

1993, to provide appropriate prelicensure/certification education

meeting Appraiser Qualification Board standards to persons desiring to

become CNMI licensed or certified real estate appraisers. As of January

12, 1994, the Board reported that it has issued credentials to two

licensed appraisers, one certified residential appraiser and six

certified general appraisers, and eight more persons have become

qualified to take the next-scheduled Certified General Real Estate

Appraiser Examination. CNMI's Board also reported that it has requested

the same firm to submit a proposal to offer appropriate continuing

education courses to CNMI licensed or certified appraisers. In short,

CNMI believes that a scarcity of certified or licensed appraisers

leading to significant delays in the performance of appraisals in

connection with federally related transactions no longer exists.

IV. Conclusion

On the basis of the foregoing, the ASC finds that a scarcity of

certified or licensed appraisers leading to significant delays in the

performance of appraisals in connection with federally related

transactions no longer exists on CNMI. The ASC requests comment on this

finding for a 30 calendar day period and orders the termination of

temporary waiver relief to be effective on a final basis 21 calendar

days after the close of the comment period, absent further ASC action

in the interim. The ASC also orders an extension of the original

February 28, 1994 termination date to coincide with the final date of

temporary waiver termination as determined under this Order.

Thereafter, federally regulated lenders will be required to use real

estate appraisers who are temporarily or permanently licensed or

certified by CNMI to perform appraisals in connection with federally

related transactions.

Dated: March 10, 1994.

By the Appraisal Subcommittee of the Federal Financial

Institutions Examination Council.

Diana L. Garmus,

Acting Chairperson.

[FR Doc. 94-6303 Filed 3-17-94; 8:45 am]

BILLING CODE 6210-01-M