Bill Text: IA HF2436 | 2015-2016 | 86th General Assembly | Enrolled
Bill Title: A bill for an act relating to real estate appraisal, including by requiring the superintendent of banking to regulate appraisal management companies and supervise the Iowa real estate appraiser board, making penalties applicable, and including effective date provisions. (Formerly HF 2393) (Formerly HSB 596)
Spectrum: Committee Bill
Status: (Enrolled - Dead) 2016-05-04 - Sent to Governor. H.J. 999. [HF2436 Detail]
Download: Iowa-2015-HF2436-Enrolled.html
House File 2436 - Enrolled
HOUSE FILE
BY COMMITTEE ON WAYS AND
MEANS
(SUCCESSOR TO HF 2393)
(SUCCESSOR TO HSB 596)
\5
A BILL FOR
\1
House File 2436
AN ACT
RELATING TO REAL ESTATE APPRAISAL, INCLUDING BY REQUIRING THE
SUPERINTENDENT OF BANKING TO REGULATE APPRAISAL MANAGEMENT
COMPANIES AND SUPERVISE THE IOWA REAL ESTATE APPRAISER
BOARD, MAKING PENALTIES APPLICABLE, AND INCLUDING EFFECTIVE
DATE PROVISIONS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
DIVISION I
APPRAISAL MANAGEMENT COMPANIES
Section 1. NEW SECTION. 543E.1 Short title.
This chapter shall be known and may be cited as the "Iowa
Appraisal Management Company Registration and Supervision Act".
Sec. 2. NEW SECTION. 543E.2 Purpose and scope.
The purpose of this chapter is to protect the independence
and integrity of the appraisal process when an appraisal is
provided through an appraisal management company in connection
with a consumer credit transaction secured by the principal
dwelling of an Iowa consumer or securitization of such a
transaction.
Sec. 3. NEW SECTION. 543E.3 Definitions.
Unless the context otherwise requires, the definitions
contained in section 543D.2 shall apply to this chapter. In
addition, the following definitions shall apply for purposes of
this chapter:
1. "Administrator" means the superintendent of the
division of banking of the department of commerce or the
superintendent's designee.
2. "Appraisal management company" means a person that
oversees an appraiser panel of more than fifteen certified
appraisers in this state or twenty=five or more certified
or licensed appraisers nationally within a year, and that
directly or indirectly performs appraisal management services
for creditors or secondary mortgage market participants in
connection with consumer credit transactions secured by the
principal dwellings of Iowa consumers or securitizations of
those transactions.
3. "Appraisal management company national registry" means the
registry of state=registered appraisal management companies and
federally regulated appraisal management companies maintained
by the appraisal subcommittee.
4. "Appraisal management services" means any of the
following:
a. Recruiting, selecting, and retaining appraisers.
b. Contracting with state certified or licensed appraisers
to perform appraisal assignments.
c. Managing the process of having an appraisal performed,
including providing administrative services such as receiving
appraisal orders and appraisal reports, submitting completed
appraisal reports to creditors and secondary mortgage market
participants, collecting fees from creditors and secondary
mortgage market participants for services provided, and paying
appraisers for services performed.
d. Reviewing and verifying the work of appraisers.
5. "Appraisal review" means developing and communicating an
opinion under the uniform standards of professional appraisal
practice review standards regarding the quality of another
appraiser's work product prepared as part of an appraisal
assignment. An "appraisal review" does not include quality
control solely to assure an appraisal report is complete, or to
correct grammatical, typographical, or other similar errors.
6. "Appraisal subcommittee" means the appraisal subcommittee
of the federal financial institutions examination council.
7. "Appraiser" means a person who holds a certificate as a
certified real estate appraiser issued under chapter 543D.
8. "Appraiser panel" means a network, list, or roster of
certified appraisers who are independent contractors with
an appraisal management company and who have been selected
and approved by the appraisal management company to perform
appraisals directly for the appraisal management company or
for persons that have ordered appraisals through the appraisal
management company. Appraisers on an appraisal management
company's appraiser panel may include both appraisers engaged
to perform one or more appraisals for covered transactions or
for secondary mortgage market participants in connection with
covered transactions, and appraisers accepted by the appraisal
management company for consideration for future appraisal
assignments for such purposes, as the administrator may further
provide by rule.
9. "Associate real estate appraiser" means a person who is
registered with the Iowa real estate appraiser examining board
under section 543D.20.
10. "Consumer credit" means credit offered or extended to a
consumer primarily for personal, family, or household purposes.
11. "Controlling person" means any of the following:
a. An owner, officer, or director of an appraisal management
company.
b. An individual employed, appointed, or authorized by
an appraisal management company who has the authority to
enter into a contractual relationship with other persons for
the performance of appraisal management services and has the
authority to enter into agreements with appraisers for the
performance of appraisals.
c. An individual who possesses, directly or indirectly, the
power to direct or cause the direction of the management or
policies of an appraisal management company.
12. "Covered transaction" means any consumer credit
transaction secured by the consumer's principal dwelling.
13. "Creditor" means a person who regularly extends consumer
credit that is subject to a finance charge or is payable by
written agreement in more than four installments, not including
a down payment, and to whom the obligation is initially
payable, either on the face of the note or contract, or by
agreement when there is no note or contract. For purposes of
this subsection, a person "regularly extends consumer credit"
if the person extended credit, other than credit subject to
the requirements of 12 C.F.R. {1026.32, more than five times
in the preceding calendar year for transactions secured by a
dwelling. If a person did not meet those numerical standards
in the preceding calendar year, the numerical standards
shall be applied to the current calendar year. A person also
"regularly extends consumer credit" if, in any twelve=month
period, the person originates more than one credit extension
that is subject to the requirements of 12 C.F.R. {1026.32 or
one or more such credit extensions through a mortgage broker.
14. "Dwelling" means a residential structure that contains
one to four units, whether or not that structure is attached to
real property. "Dwelling" includes an individual condominium
unit, cooperative unit, mobile home, and trailer, if it is used
as a residence.
15. "Federally regulated appraisal management company" means
an appraisal management company that is owned and controlled
by an insured depository institution, as defined in 12 U.S.C.
{1813 and regulated by the office of the comptroller of the
currency, the board of governors of the federal reserve system,
or the federal deposit insurance corporation.
16. "Federally related transaction regulations" means
regulations established by the comptroller of the currency, the
board of governors of the federal reserve system, the federal
deposit insurance corporation, or the national credit union
administration pursuant to sections 1112, 1113, and 1114 of
Tit. XI of the federal Financial Institutions Reform, Recovery,
and Enforcement Act, 12 U.S.C. {{3341=3343.
17. "Nonsubstantive reason" means a reason for imposing
discipline against a certified appraiser that is not described
in section 543D.17 or a substantially similar provision in the
jurisdiction that imposed the discipline, including but not
limited to the failure to pay appropriate fees.
18. "Person" means as defined in section 4.1.
19. "Principal dwelling" means the primary residence of a
consumer. For purposes of this chapter, a consumer may have
only one "principal dwelling". A vacation or other second home
shall not be considered a "principal dwelling". However, if
a consumer buys or builds a new dwelling that will become the
consumer's primary residence within a year or upon completion
of the construction, the new residence is considered the
"principal dwelling" for purposes of this chapter.
20. "Secondary mortgage market participant" means a guarantor
or insurer of mortgage=backed securities, or an underwriter
or issuer of mortgage=backed securities. "Secondary mortgage
market participant" only includes an individual investor in a
mortgage=backed security if that investor also serves in the
capacity of a guarantor, insurer, underwriter, or issuer for
the mortgage=backed security.
21. "States" means the fifty states of the United States,
the District of Columbia, and the territories of American
Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the
United States Virgin Islands.
22. "Substantive reason" means a reason for imposing
discipline against a certified appraiser that is described in
section 543D.17 or a substantially similar provision in the
jurisdiction that imposed the discipline.
23. "Uniform standards of professional appraisal practice"
means the uniform standards promulgated by the appraisal
standards board of the appraisal foundation.
Sec. 4. NEW SECTION. 543E.4 Registration required.
A person shall not directly or indirectly engage in or
attempt to engage in business as an appraisal management
company or advertise or hold itself out as engaging in or
conducting business as an appraisal management company in this
state without first registering with the administrator.
Sec. 5. NEW SECTION. 543E.5 Exemptions.
This chapter shall not apply to any of the following:
1. A person that exclusively employs appraisers on an
employer and employee basis for the performance of appraisals.
2. A government body, as defined in section 22.1, subsection
1, that performs appraisals or retains appraisers on behalf of
the government body.
3. A federally regulated appraisal management company.
4. A department or division of an entity that provides
appraisal management services only to that entity.
Sec. 6. NEW SECTION. 543E.6 Ownership == restrictions and
requirements.
1. An appraisal management company registered or applying
for registration in this state shall not be directly or
indirectly owned in whole or in part by a person who has had a
license or certificate to act as an appraiser refused, denied,
canceled, revoked, or surrendered in lieu of revocation in
any state for a substantive reason. An appraisal management
company may be directly or indirectly owned in whole or in part
by a person who has had a license or certificate to act as an
appraiser refused, denied, canceled, revoked, or surrendered
in lieu of revocation in a state for a nonsubstantive reason
if the license or certificate was subsequently granted or
reinstated.
2. A person who directly or indirectly owns more than ten
percent of an appraisal management company in this state shall
be of good moral character, as prescribed by rules adopted by
the administrator consistent with applicable federal law and
regulations, and shall submit to a background investigation,
as prescribed by rules adopted by the administrator consistent
with applicable federal law and regulations.
Sec. 7. NEW SECTION. 543E.7 Designation of controlling
person.
1. An appraisal management company registered or applying
for registration in this state shall designate a controlling
person who shall be the main contact for all communications
between the administrator and the appraisal management company,
and who shall be responsible for assuring the appraisal
management company complies with the provisions of this chapter
when performing appraisal management services in connection
with real estate located in this state.
2. The designated controlling person shall not have had a
license or certificate to act as an appraiser refused, denied,
canceled, revoked, or surrendered in lieu of revocation in
any state for a substantive reason. A designated controlling
person may have had a license or certificate to act as an
appraiser refused, denied, canceled, revoked, or surrendered
in lieu of revocation in a state for a nonsubstantive reason
if the license or certificate was subsequently granted or
reinstated.
3. The designated controlling person shall be of good moral
character, as prescribed by rules adopted by the administrator
consistent with applicable federal law and regulations, and
shall submit to a background investigation, as prescribed by
rules adopted by the administrator consistent with applicable
federal law and regulations.
Sec. 8. NEW SECTION. 543E.8 Registration == application
requirements.
1. An application for registration as an appraisal
management company shall be submitted on a form prescribed by
the administrator.
2. An application shall at a minimum include the following:
a. The name, form of business entity, contact information,
and official domicile of the applicant.
b. The names and contact information for all persons
who directly or indirectly own more than ten percent of the
applicant and for the controlling person designated pursuant
to section 543E.7, and such additional information the
administrator may need to enforce section 543E.6, subsection 1.
c. Information as reasonably necessary to establish the size
of the applicant's nationwide and Iowa appraiser panels, in
accordance with rules adopted by the administrator.
d. Certification that the applicant does all of the
following:
(1) Verifies that appraisers who will perform appraisal
assignments concerning real estate located in this state hold a
valid, unexpired certificate in good standing as a real estate
appraiser issued under chapter 543D.
(2) Requires that appraisals provided or coordinated by the
applicant comply with the uniform standards of professional
appraisal practice and has a system in place to monitor such
compliance.
(3) Maintains a system to assure that appraisal
management services are performed independently and free from
inappropriate influence and coercion pursuant to the appraisal
independence standards established under section 129E of the
federal Truth in Lending Act, including the requirements for
the payment of reasonable and customary fees, and pursuant to
section 543D.18, subsections 1 and 2, and section 543D.18A.
(4) Maintains a system to retain detailed records of all
appraisal management services to be performed in this state.
(5) Maintains a system to assure that the appraiser selected
for an appraisal assignment is independent of the transaction
and has the requisite education, expertise, and experience
necessary to competently complete the appraisal assignment for
the particular market and property type.
e. If the applicant is not domiciled in this state, the name
and contact information for the applicant's agent for service
of process in this state and consent to service of process upon
the secretary of state in any action or proceeding against the
applicant arising out of a transaction or operation connected
with or incidental to services performed by the applicant as
a registered appraisal management company in this state or
involving real property located in this state.
f. Any additional information that is reasonably needed for
the administrator to implement the provisions of this chapter
and assure that the applicant is eligible for registration
under this chapter.
Sec. 9. NEW SECTION. 543E.9 Registration renewal and annual
certification.
1. A registration issued under this chapter shall be valid
for one year as provided by rule.
2. An application to renew registration shall be submitted
in the form and in the manner prescribed by the administrator.
The administrator may further require periodic disclosures of
changes impacting registration, such as a change in ownership
or the designated controlling person.
3. An application to renew registration shall contain the
information described in section 543E.8, subsection 2.
4. A registration issued under this chapter shall lapse if
not timely renewed, in accordance with rules adopted by the
administrator.
5. A person holding a lapsed registration shall not directly
or indirectly engage in or attempt to engage in business as an
appraisal management company or advertise or hold itself out as
engaging in or conducting business as an appraisal management
company in this state until the registration has been
reinstated under the process prescribed by the administrator
by rule.
Sec. 10. NEW SECTION. 543E.10 Fees.
1. The administrator shall by rule establish fees for
registration, renewal, reinstatement, and such additional fees
as are reasonably necessary for the administration of this
chapter. The fees shall be established in consideration of
the costs of administering this chapter and the actual cost
of the specific service to be provided or performed. The
administrator shall periodically review and adjust the schedule
of fees as needed to cover projected expenses.
2. Except as provided in subsection 3, all fees collected
under this chapter shall be deposited into the department of
commerce revolving fund created in section 546.12 and are
appropriated to the administrator to be used to administer
this chapter including but not limited to purposes such as
examinations, investigations, and administrative staffing.
Notwithstanding section 8.33, moneys appropriated pursuant to
this subsection are not subject to reversion to the general
fund of the state.
3. The administrator shall also collect the appraisal
management company national registry fee from each appraisal
management company seeking to register in this state and from
federally regulated appraisal management companies operating
in this state. The administrator shall transfer all appraisal
management company national registry fees collected by the
administrator to the appraisal subcommittee.
Sec. 11. NEW SECTION. 543E.11 Appraiser, appraisal review,
and employee restrictions.
1. The following individuals shall not have had a license or
certificate to act as an appraiser refused, denied, canceled,
revoked, or surrendered in lieu of revocation in any state
for a substantive reason, but may have had a license or
certificate to act as an appraiser refused, denied, canceled,
revoked, or surrendered in lieu of revocation in a state for
a nonsubstantive reason if the license or certificate was
subsequently granted or reinstated:
a. An appraiser in an appraisal management company's
appraiser panel who performs or may perform appraisals of real
estate located in this state.
b. An employee, independent contractor, or other agent of an
appraisal management company who performs an appraisal review
of an appraisal of real estate located in this state.
c. An employee, independent contractor, or other agent of an
appraisal management company who, with respect to real estate
located in this state, has any responsibility for assigning
appraisers to specific appraisal assignments, providing quality
control for appraisal reports, or communicating with appraisers
regarding potential appraisal report deficiencies.
2. An appraiser who on behalf of an appraisal management
company performs an appraisal review of an appraisal of a
dwelling located in this state shall comply with the review
provisions of the uniform standards of professional appraisal
practice, and shall be certified as an appraiser under the laws
of any state, except that a review appraiser shall be certified
under chapter 543D if such certification is required by any
applicable state or federal law, rule, or regulation, or to the
extent the review appraiser provides the review appraiser's own
opinion of value, concurs with the original appraiser's opinion
of value, or disagrees with the original appraiser's opinion of
value.
3. An appraisal management company may rely on the national
registry of appraisers of the appraisal subcommittee for
purposes of verifying compliance with this section.
Sec. 12. NEW SECTION. 543E.12 Adherence to standards ==
mandatory reporting.
1. An appraisal management company shall direct all
appraisers it requests to perform appraisal assignments
involving real estate located in this state to comply with the
uniform standards of professional appraisal practice, including
the competency rule.
2. An appraisal management company shall have an appraisal
review system in place to monitor compliance with subsection 1.
3. An appraisal management company that has a reasonable
basis to believe an appraiser has materially failed to
comply with the uniform standards of professional appraisal
practice or has otherwise materially violated chapter 543D or
this chapter shall refer the matter to the administrator in
conformance with applicable federal law and regulations. An
appraisal management company that has a reasonable basis to
believe another appraisal management company is failing to
comply with the provisions of this chapter shall refer the
matter to the administrator in conformance with section 272C.9,
subsection 2.
4. An appraiser who is employed by or is on the appraiser
panel of an appraisal management company registered under this
chapter who has a reasonable basis to believe the appraisal
management company is in violation of this chapter shall refer
the matter to the administrator.
Sec. 13. NEW SECTION. 543E.13 Recordkeeping == payment.
1. An appraisal management company shall maintain a
detailed record of each service request the appraisal
management company receives involving real estate located in
this state and the identity of the appraiser who performs the
appraisal assignment. All such records shall be maintained for
at least five years after the request is sent by the appraisal
management company to the appraiser or the completion of the
appraisal report, whichever period expires later. An appraisal
management company shall maintain such additional records
regarding appraisal management services performed in this state
as the administrator may specify by rule.
2. An appraisal management company shall, except in the
case of breach of contract or substandard performance of
an appraisal service, make payment to an appraiser for the
completion of an appraisal service within forty=five days
of the date on which the appraiser transmits or otherwise
provides the results of the completed appraisal service to the
appraisal management company. An appraisal management company
shall maintain detailed records to verify that all payments to
appraisers have been made in compliance with this section. All
such records shall be maintained for at least five years after
payment is made or the completion of the appraisal service,
whichever is later.
Sec. 14. NEW SECTION. 543E.14 Appraiser independence ==
compensation.
1. An appraisal management company registered under
this chapter shall take all reasonable steps to assure
that appraisals are conducted independently and free from
inappropriate influence or coercion pursuant to the appraisal
independence standards established under section 129E of the
federal Truth in Lending Act, including the requirements for
the payment of reasonable and customary fees, and in compliance
with the independence, objectivity, and impartiality provisions
of section 543D.18, subsections 1 and 2, and section 543D.18A.
2. An appraisal management company shall compensate
appraisers at a rate that is reasonable and customary for
appraisal services being performed in the market area of the
property being appraised in accordance with federal law.
Sec. 15. NEW SECTION. 543E.15 Prohibited acts.
An appraisal management company registered under this
chapter, or an employee, owner, director, controlling person,
or other agent of an appraisal management company, shall not
do any of the following:
1. Require an appraiser to indemnify an appraisal
management company or hold an appraisal management company
harmless for any liability, damage, losses, or claims arising
out of the services performed by the appraisal management
company, and not the services performed by the appraiser.
2. Alter, modify, or otherwise change a completed appraisal
report submitted by an appraiser without the appraiser's
written consent.
3. Require that an appraiser provide the appraisal
management company with the appraiser's digital or electronic
signature, seal, or certification, or any password or other
form of security intended to prevent persons other than the
appraiser from affixing the appraiser's digital or electronic
signature, seal, or certification on a completed appraisal
report.
4. Remove an appraiser from an appraiser panel without prior
written notice that identifies the basis for removal. Upon
request or in conjunction with an examination, an appraisal
management company shall forward to the administrator copies
of such notices issued to an appraiser located or certified in
Iowa.
5. Require an appraiser to modify any aspect of an appraisal
report other than through a request permitted under section
543D.18A, subsection 4.
6. Require an appraiser to perform an appraisal assignment
if the appraiser has notified the appraisal management company
that, in the appraiser's own professional judgment, any of the
following apply:
a. The appraiser does not have the necessary competence or
expertise for the specific geographic area or type of property
to be appraised.
b. The timeframe under which the appraisal assignment is
to be performed is insufficient for the appraiser to meet all
relevant legal and professional obligations.
7. Require, either knowingly or through lack of reasonable
diligence, an appraiser to take any action that would violate
the uniform standards of professional appraisal practice, or
any provision of chapter 543D or rule adopted pursuant thereto.
8. Prohibit an appraiser from disclosing the fee paid to the
appraiser for appraisal services in the appraisal report.
9. Prohibit or inhibit lawful communications between the
appraiser and the lender, a real estate salesperson or broker,
or any other person from whom the appraiser, in the appraiser's
own professional judgment, believes information obtained would
be relevant to the appraisal assignment.
10. Condition payment of all or any part of an appraiser's
fee or the appraisal management company's fee on a particular
outcome, including but not limited to any of the following
outcomes:
a. A loan closing.
b. A specific dollar amount in an appraisal report.
c. An outcome that would violate section 543D.18, subsection
2, or section 543D.18A, subsection 1.
11. Engage in any acts or practices that violate section
543E.14.
Sec. 16. NEW SECTION. 543E.16 Display of registration
number.
An appraisal management company registered under this
chapter shall be issued a unique registration number and shall
include its registration number in any record, such as an
engagement letter, order, or agreement, in which the appraisal
management company contracts with an appraiser to perform an
appraisal assignment involving real estate located in this
state.
Sec. 17. NEW SECTION. 543E.17 Grounds for disciplinary
action.
1. After notice and hearing, the administrator may
revoke, suspend, or refuse to issue, renew, or reinstate
a registration; reprimand, censure, or limit the scope of
practice of any registrant; impose a civil penalty not to
exceed ten thousand dollars per violation; require remedial
action; or place any registrant on probation; all with or
without terms, conditions, or in combinations of remedies, for
any one or more of the following reasons:
a. Fraud or deceit in obtaining registration, which may also
result in permanent revocation of the registration.
b. Dishonesty, fraud, or gross negligence in the provision
of appraisal management services.
c. A violation of this chapter or implementing rules by
the appraisal management company or by an employee, owner,
director, controlling person, or other agent of the appraisal
management company.
d. Conviction of a felony or other indictable offense, any
element of which is dishonesty, deception, or fraud, or is
otherwise related to the performance of appraisal management
services, under the laws of any state or the United States.
e. Cancellation, revocation, suspension, or refusal to renew
the authority to practice as an appraisal management company,
or the acceptance of the voluntary surrender of a registration
to practice as an appraisal management company to conclude a
disciplinary investigation or action, by any other state, a
federal agency, or foreign authority for any cause other than
failure to pay appropriate fees in the other jurisdiction.
f. A violation of section 272C.10.
2. When determining whether to initiate a disciplinary
proceeding against an appraisal management company based
on actions or omissions by an employee, owner, director,
controlling person, or other agent of the appraisal management
company, the administrator shall take into consideration all
of the following:
a. Whether the appraisal management company took reasonable
steps to prevent the violation.
b. Whether the violation was or could have been discovered
by the appraisal management company upon reasonable inquiry.
c. What steps the appraisal management company took upon
discovering the violation.
d. Whether the violation could have been avoided had the
appraisal management company established the systems or other
procedures required under this chapter.
e. Whether the violation is an isolated matter or more
systemic to the appraisal management company's performance.
Sec. 18. NEW SECTION. 543E.18 Unlawful practice ==
complaints and investigations == remedies and penalties.
1. If, as the result of a complaint or otherwise, the
administrator believes that a person has engaged, or is about
to engage, in an act or practice that constitutes or will
constitute a violation of this chapter, the administrator may
make application to the district court for an order enjoining
such act or practice. Upon a showing by the administrator that
such person has engaged, or is about to engage, in any such act
or practice, an injunction, restraining order, or other order
as may be appropriate shall be granted by the district court.
2. The administrator may investigate a complaint or
initiate a complaint against a person who is not registered
under this chapter to determine whether grounds exist to make
application to the district court pursuant to subsection 1 or
to issue an order pursuant to subsection 3, and in connection
with such complaint or investigation may issue subpoenas to
compel witnesses to testify or persons to produce evidence
consistent with the provisions of section 272C.6, subsection
3, as needed to determine whether probable cause exists to
initiate a proceeding under this section or to make application
to the district court for an order enjoining a violation of
this chapter.
3. In addition to or as an alternative to making application
to the district court for an injunction, the administrator may
issue an order to a person who is not registered under this
chapter to require compliance with this chapter and may impose
a civil penalty against such person for any violation specified
in subsection 4 in an amount up to ten thousand dollars for
each violation. All civil penalties collected pursuant to this
section shall be deposited in the housing trust fund created
in section 16.181. An order issued pursuant to this section
may prohibit a person from applying for registration under this
chapter or certification or registration under chapter 543D.
4. The administrator may impose a civil penalty against a
person who is not registered under this chapter for any of the
following:
a. A violation of section 543E.4.
b. A violation of section 543D.18A, subsection 1.
c. Fraud, deceit, or deception, through act or omission,
in connection with an application for registration under this
chapter.
5. The administrator, before issuing an order under
this section, shall provide the person written notice and
the opportunity to request a hearing. The hearing must be
requested within thirty days after receipt of the notice
and shall be conducted in the same manner as provided for
disciplinary proceedings involving a registrant under this
chapter.
6. A person aggrieved by the imposition of a civil penalty
under this section may seek judicial review pursuant to section
17A.19.
7. If a person fails to pay a civil penalty within thirty
days after entry of an order imposing the civil penalty, or
if the order is stayed pending an appeal, within ten days
after the court enters a final judgment in favor of the
administrator, the administrator shall notify the attorney
general. The attorney general may commence an action to
recover the amount of the penalty, including reasonable
attorney fees and costs.
8. An action to enforce an order under this section may be
joined with an action for an injunction.
Sec. 19. NEW SECTION. 543E.19 Surety bond.
1. The administrator shall require that an appraisal
management company be covered by a surety bond in the amount of
twenty=five thousand dollars.
2. The surety bond shall be in a form as prescribed by
the administrator. The administrator may, pursuant to rule,
determine requirements for such surety bonds as are necessary
to accomplish the purposes of this chapter. The requirements
for a surety bond shall only relate to liabilities, damages,
losses, or claims arising out of the appraisal management
services performed by the appraisal management company
involving real estate located in this state. The bond shall
provide that a person having a claim against an appraisal
management company may bring suit directly on the bond or the
administrator may bring suit on behalf of such person.
Sec. 20. NEW SECTION. 543E.20 Additional administrator
authority.
1. The administrator is vested with broad administrative
authority to administer, interpret, and enforce this chapter
and to promulgate rules implementing this chapter.
2. In addition to the duties and powers conferred upon the
administrator in this chapter, the administrator shall have
the authority to adopt such rules as are reasonably necessary
to assure the administrator's registration and supervision
of appraisal management companies comply with the minimum
requirements of 12 U.S.C. {3352 and related federal laws and
regulations, with respect to any of the following:
a. Reviewing and approving or denying an appraisal
management company's application for initial or renewal
registration.
b. Examining the books and records of an appraisal
management company operating in the state and requiring the
appraisal management company to submit reports, information,
and documents.
c. Verifying that the appraisers on an appraisal management
company's appraiser panel who perform appraisal assignments in
this state hold valid certificates issued under chapter 543D.
d. Conducting investigations of appraisal management
companies to assess potential violations of applicable
appraisal=related laws, regulations, rules, or orders.
e. Disciplining, suspending, terminating, or denying renewal
of the registration of an appraisal management company that
violates applicable appraisal=related laws, regulations, rules,
or orders.
f. Notwithstanding section 272C.6, subsection 4, reporting
an appraisal management company's violation of applicable
appraisal=related laws, regulations, rules, or orders, as well
as disciplinary and enforcement investigations and actions
and other relevant information about an appraisal management
company's operations, to the appraisal subcommittee.
g. Imposing requirements on appraisal management companies
that are mandated by federal law and regulations applicable
to appraisal management companies that are not exempt under
federal law, including any of the following:
(1) Registration and supervision requirements.
(2) Ownership limitations.
(3) Engaging only certified appraisers for federally
related transactions in conformity with all applicable
federally related transaction regulations.
(4) Establishing systems for engaging appraisers who are
competent and independent, and who are suited for the appraisal
assignments to which they are assigned based on education,
expertise, and experience.
(5) Directing appraisers to perform appraisal assignments
in accordance with the uniform standards of professional
appraisal practice.
(6) Establishing and complying with processes and controls
reasonably designed to ensure appraisal management companies
conduct appraisal management services in accordance with the
requirements of section 129E(a)=(i) of the federal Truth
in Lending Act, 15 U.S.C. {1639e(1)=(i), and regulations
thereunder including but not limited to the requirement that
appraisers who complete an appraisal in connection with a
consumer credit transaction secured by the principal dwelling
of the consumer be compensated with a customary and reasonable
fee.
h. Assessing, collecting, and forwarding to the appraisal
subcommittee appraisal management company national registry
fees from appraisal management companies registered under this
chapter and from federally regulated appraisal management
companies.
3. The administrator may conduct periodic examinations of
applicants or registrants under this chapter as reasonably
necessary to assure compliance with all or specific provisions
of this chapter. All papers, documents, examination reports,
and other records relating to such examinations shall be
confidential as provided in section 272C.6, subsection 4,
except as provided in this section.
4. The administrator may adopt rules governing an
appraiser's use of associate real estate appraisers while
performing appraisal assignments subject to this chapter.
Associate real estate appraisers may provide appraisal services
under the supervision of a certified appraiser as provided
in chapter 543D and associated rules, but shall not be on an
appraiser panel of an appraisal management company.
5. The administrator may require a national criminal
history check through the federal bureau of investigation or,
if authorized by federal law or regulation, the nationwide
mortgage licensing system and registry, as defined in section
535D.3, when conducting background investigations under
this chapter. Except as inconsistent with the registry, the
following shall apply:
a. The administrator may require owners and controlling
persons who are subject to the background investigation
provisions of sections 543E.6 and 543E.7 to provide a full
set of fingerprints, in a form and manner prescribed by the
administrator. Such fingerprints, if required, shall be
submitted to the federal bureau of investigation through the
state criminal history repository for purposes of the national
criminal history check.
b. The administrator may also request and obtain,
notwithstanding section 692.2, subsection 5, criminal history
data for owners and controlling persons who are subject to the
background investigation provisions of sections 543E.6 and
543E.7. A request for criminal history data shall be submitted
to the department of public safety, division of criminal
investigation, pursuant to section 692.2, subsection 1.
c. The administrator shall inform such owners and
controlling persons of the requirement of a national criminal
history check or request for criminal history data and obtain
a signed waiver from the applicant, certificate holder, or
registrant prior to requesting the check or data.
d. The administrator may, in addition to any other fees,
charge and collect such amounts as may be incurred by the
administrator, the department of public safety, or the
federal bureau of investigation in obtaining criminal history
information. Amounts collected shall be considered repayment
receipts as defined in section 8.2.
e. Criminal history data and other criminal history
information relating to affected owners or controlling
persons, or their appraisal management companies obtained
by the administrator pursuant to this section shall remain
confidential. Such information may, however, be used by
the administrator in a registration denial, enforcement, or
disciplinary proceeding.
Sec. 21. Section 272C.1, subsection 6, Code 2016, is amended
by adding the following new paragraph:
NEW PARAGRAPH. ag. The superintendent of the division
of banking of the department of commerce in registering and
supervising appraisal management companies pursuant to chapter
543E.
DIVISION II
IOWA REAL ESTATE APPRAISER EXAMINING BOARD == SUPERVISION
Sec. 22. Section 543D.2, Code 2016, is amended by adding the
following new subsection:
NEW SUBSECTION. 11. "Superintendent" means the
superintendent of the division of banking of the department of
commerce or the superintendent's designee.
Sec. 23. Section 543D.4, subsection 1, Code 2016, is amended
to read as follows:
1. A real estate appraiser examining board is established
within the professional licensing and regulation bureau of the
banking division of the department of commerce. The board
consists of seven members, two of whom shall be public members
and five of whom shall be certified real estate appraisers.
Sec. 24. Section 543D.5, subsection 1, Code 2016, is amended
to read as follows:
1. The board shall adopt rules establishing uniform
appraisal standards and appraiser certification requirements
and other rules necessary to administer and enforce this
chapter and its responsibilities under chapter 272C, subject to
the superintendent's supervision and authority under section
543D.23. The board shall consider and may incorporate any
standards required or recommended by the appraisal foundation
or by a federal agency with regulatory authority over appraisal
standards or the certification of appraisers for federally
related transactions.
Sec. 25. Section 543D.5, Code 2016, is amended by adding the
following new subsection:
NEW SUBSECTION. 5. Notwithstanding any provision to the
contrary, the provisions in section 546.10, subsections 6
through 12, shall apply to the board and to activities governed
under this chapter.
Sec. 26. Section 543D.6, subsection 2, Code 2016, is amended
to read as follows:
2. Fees collected by the board shall be transmitted
to the treasurer of state who shall deposit the fees in
the general fund of the state. All fees collected by the
board shall be deposited into the department of commerce
revolving fund created in section 546.12 and are appropriated
to the superintendent on behalf of the board to be used to
administer this chapter including but not limited to purposes
such as examinations, investigations, and administrative
staffing. Notwithstanding section 8.33, moneys retained by
the superintendent pursuant to this section are not subject
to reversion to the general fund of the state. However,
the appraisal management company national registry fees the
board collects on behalf of the appraisal subcommittee as
defined in section 543E.3 shall be transmitted to the appraisal
subcommittee in accordance with federal laws and regulations.
Sec. 27. Section 543D.22, subsection 1, Code 2016, is
amended to read as follows:
1. The board may require a national criminal history check
through the federal bureau of investigation for applicants
for certification or registration, or for persons certified
or registered, under this chapter if needed for credibility,
to comply with federal law or regulation, or the policies of
the appraisal qualification board of the appraisal foundation.
The board may alternatively require a national criminal
history check through the nationwide mortgage licensing system
and registry, as defined in section 535D.3, when conducting
background investigations under this section, if authorized by
applicable federal law or regulation.
Sec. 28. NEW SECTION. 543D.23 Superintendent supervision
and authority.
1. The superintendent shall supervise the board and manage
the board's budget and retained fees. The superintendent may
exercise all authority conferred upon the board under this
chapter and shall have access to all records and information
to which the board has access. In supervising the board, the
superintendent shall independently evaluate the substantive
merits of actions recommended or proposed by the board which
may be anticompetitive and shall have the authority to review,
approve, modify, or reject all board actions including but not
limited to those taken in connection with any of the following:
a. Initial or reciprocal certification of real estate
appraisers, registration of associate real estate appraisers,
and temporary practice permits.
b. Disciplinary investigations and proceedings.
c. Investigations and proceedings under section 543D.21.
d. Rulemaking, including orders on petitions for rulemaking.
e. Orders on petitions for declaratory orders or waivers or
variances.
2. A person aggrieved by any final action of the board taken
under this chapter shall not have exhausted administrative
remedies until the person has appealed the action to the
superintendent and the superintendent has issued a final
decision or order.
3. The superintendent shall adopt rules to implement this
section.
Sec. 29. Section 546.3, subsection 1, Code 2016, is amended
to read as follows:
1. The banking division shall regulate and supervise banks
under chapter 524, debt management licensees under chapter
533A, money services under chapter 533C, delayed deposit
services under chapter 533D, mortgage bankers and brokers
under chapter 535B, regulated loan companies under chapter
536, and industrial loan companies under chapter 536A, real
estate appraisers under chapter 543D, and appraisal management
companies under chapter 543E, and shall perform other duties
assigned to the division by law. The division is headed by the
superintendent of banking who is appointed pursuant to section
524.201. The state banking council shall render advice within
the division when requested by the superintendent.
Sec. 30. Section 546.10, subsection 1, paragraph f, Code
2016, is amended by striking the paragraph.
Sec. 31. Section 546.10, subsection 5, Code 2016, is amended
to read as follows:
5. Fees collected under chapters 542, 542B, 543B, 543D,
544A, 544B, and 544C shall be paid to the treasurer of state
and credited to the general fund of the state. All expenses
required in the discharge of the duties and responsibilities
imposed upon the professional licensing and regulation bureau
of the banking division of the department of commerce, the
administrator, and the licensing boards by the laws of this
state shall be paid from moneys appropriated by the general
assembly for those purposes. All fees deposited into the
general fund of the state, as provided in this subsection,
shall be subject to the requirements of section 8.60.
Sec. 32. EFFECTIVE DATE. This Act takes effect on January
1, 2017.
LINDA UPMEYER
Speaker of the House
PAM JOCHUM
President of the Senate
I hereby certify that this bill originated in the House and
is known as House File 2436, Eighty=sixth General Assembly.
CARMINE BOAL
Chief Clerk of the House
Approved , 2016
TERRY E. BRANSTAD
Governor
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