Gruenberg: Agencies Revisiting Thresholds for Appraisal Rules

The banking agencies are revisiting the dollar thresholds for their appraisal requirements, FDIC Chairman Martin Gruenberg said in Arlington, Va., today at the final outreach meeting for the decennial Economic Growth and Regulatory Paperwork Reduction Act review. “Based largely on comments we have received during these outreach sessions, we have formed an interagency working group to review the appropriateness of dollar thresholds for transactions requiring appraisals and other requirements of the interagency appraisal regulations,” he said.

The interagency rules require appraisals for real estate transactions valued at over $250,000 and business loans valued at over $1 million when not dependent on real estate income as a source of repayment.

Gruenberg also highlighted actions by the FDIC to clarify the process of applying for deposit insurance and — as advocated by ABA — to clarify how the agency handles requests for exceptions to limits on dividends paid by S-corporation banks. The exceptions help to address, and in some cases remedy, a disadvantage for S-corp banks in Basel III’s capital buffer provision. “We will continue to look for other ways to reduce or eliminate outdated or unnecessary requirements as we move forward with this review,” he said. “As you can see, we still have a lot of work to do.”