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Who cares
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Sponsors
No co-sponsors yet.
History
- Referred to finance
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
Title of bill
An act to amend the executive law, in relation to the registration of real estate appraisal management companies by the department of state
Purpose of the bill
This proposal would amend the Executive Law to authorize the Department of State to license appraisal management companies.
Summary of specific provisions
Section 1 would add a new Article 6-H (sections 160-aaaa through 160-xxxx) to the Executive Law to require that each business corporation or entity that undertakes appraisal management services on behalf of a lender, financial institution, client, or any other person in conjunction with a consumer credit transaction that is secured by a consumers real property must first obtain a license. The new Article sets forth exemptions, fees for licensure, and provisions necessary for the proper administration and enforcement of the statute. State agencies and authorities are specifically exempted from licensure.
Section 2 would set forth the effective date.
Existing law
Currently, a person must obtain a license from the State of New York prior to appraising real estate. However, companies that order and review such appraisals on behalf of lending institutions and other clients are not regulated by the State.
Legislative history
This is a new proposal.
Statement in support
The Appraisal Subcommittee (ASC) is the federal agency that oversees, among other things, the real estate appraisal industry. In August 2015, the ASC adopted regulations that required each state to decide whether to license and regulate appraisal management companies. If a state chooses not to do so, these companies will not be able to operate in that state after August 2018.
In the wake of the 2008 mortgage crisis, appraisal management companies have become a part of the way banks do business. Rather than maintaining staff to review appraisals, banks now contract with appraisal management companies. Besides the obvious issue that banks would need to reconsider the way they conduct their lending practices in New York if the State does not act, regulation of appraisal management companies would protect consumers and, indeed, real estate appraiser licensees. Appraisal management companies are in a position to exert undue influence on these licensees because the vast majority of appraisal work now flows through them at a cost that they set.
Budget implications
The Federal government notes that there are only approximately 600 appraisal management companies nationwide and that no more than 200 operate in any one state. Given the fee structure set forth in this proposal, it is likely that it would result in State revenue of between $50,000 and $200,000 per annum.
Local impact
None noted.
Effective date
This act would take effect on the 120th day after it becomes law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.