For immediate release

The Federal Reserve Board today requested comment on a proposed amendment to its Appraisal Regulation for bank holding companies to exempt any transaction involving the underwriting or dealing of mortgage-backed securities from the Board's appraisal requirements. Comment is requested by January 8, 1998. The proposed amendment would permit a bank holding company or a nonbank subsidiary of a bank holding company with the authority to underwrite or deal in mortgage-backed securities to do so without demonstrating that the loans underlying the securities are supported by appraisals at origination that meet the Board's appraisal requirements. As the proposal notes, the Board believes the public rating or due diligence that the market requires for mortgage-backed securities provides information that is at least as sufficient for assessing risks as provided by new appraisals for the underlying loans. Additionally, the Board is delegating to the Director of the Division of Banking Supervision and Regulation the Board's existing authority to determine for an individual transaction that the services of an appraiser are not necessary in order to protect federal financial and public policy interests in real estate-related financial transactions or to protect the safety and soundness of the institution. This delegation of authority is effective December 9, 1997, and is intended to aid in the efficient processing of requests for individual exemptions from the Board's appraisal regulation. The Board's notices are attached.

Proposed rule:  Summary only | Full text (18 KB PDF)

Delegation of authority:  Summary only | Full text (8 KB PDF)

1997 Banking and consumer regulatory policy