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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
12 CFR Part 34
[Docket No. OCC-2020-0014]
RIN 1557-AE86
FEDERAL RESERVE SYSTEM
12 CFR Part 225
Docket No. R-1713
RIN 7100-AF87
FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 323
RIN 3064-AF48
Real Estate Appraisals
AGENCY: The Office of the Comptroller of the Currency, Treasury (OCC); the Board of
Governors of the Federal Reserve System (Board); and the Federal Deposit Insurance
Corporation (FDIC).
ACTION: Final rule.
SUMMARY: The OCC, Board, and FDIC (collectively, the agencies) are adopting as final the
interim final rule published by the agencies on April 17, 2020, making temporary amendments to
the agencies’ regulations requiring appraisals for certain real estate-related transactions. The
final rule adopts the deferral of the requirement to obtain an appraisal or evaluation for up to 120
days following the closing of certain residential and commercial real estate transactions,
excluding transactions for acquisition, development, and construction of real estate. Regulated
institutions should make best efforts to obtain a credible estimate of the value of real property
collateral before closing the loan and otherwise underwrite loans consistent with the principles in
the agencies’ Standards for Safety and Soundness and Real Estate Lending Standards. The

1

agencies’ final rule allows regulated institutions to expeditiously extend liquidity to creditworthy
households and businesses in light of recent strains on the U.S. economy as a result of the
coronavirus disease 2019 (COVID event). The final rule adopts the interim final rule with one
revision in response to comments received by the agencies on the interim final rule.
DATES: The final rule is effective [INSERT DATE OF PUBLICATION IN FEDERAL
REGISTER] through December 31, 2020.
FOR FURTHER INFORMATION CONTACT:
OCC: G. Kevin Lawton, Appraiser (Real Estate Specialist), (202) 649-6670; Mitchell Plave,
Special Counsel, (202) 649-5490; or Joanne Phillips, Counsel, Chief Counsel’s Office (202) 6495500; Office of the Comptroller of the Currency, 400 7th Street, SW, Washington, DC 20219.
For persons who are deaf or hearing impaired, TTY users may contact (202) 649-5597.
Board: Anna Lee Hewko, Associate Director, (202) 530-6260; Teresa A. Scott, Manager,
Policy Development Section, (202) 973-6114; Carmen Holly, Lead Financial Institution Policy
Analyst, (202) 973-6122; Devyn Jeffereis, Senior Financial Institution Policy Analyst, (202)
365-2467, Division of Supervision and Regulation; Laurie Schaffer, Deputy General Counsel,
(202) 452-2272; Derald Seid, Senior Counsel, (202) 452-2246; Trevor Feigleson, Counsel, (202)
452-3274; David Imhoff, Attorney, (202) 452-2249, Legal Division, Board of Governors of the
Federal Reserve System, 20th and C Streets NW, Washington, DC 20551. For the hearing
impaired only, Telecommunications Device for the Deaf (TDD) users may contact (202) 2634869.
FDIC: Beverlea S. Gardner, Senior Examination Specialist, Division of Risk Management and
Supervision, (202) 898-3640, BGardner@FDIC.gov; Mark Mellon, Counsel, Legal Division,
(202) 898-3884; or, Lauren Whitaker, Senior Attorney, Legal Division, (202) 898-3872, Federal

2

Deposit Insurance Corporation, 550 17th Street, NW, Washington, DC 20429. For the hearing
impaired only, TDD users may contact (202) 925-4618.

SUPPLEMENTARY INFORMATION:
Table of Contents
I.

Introduction

II.

Background

III.

Overview of the Interim Final Rule and Comments
A. Overview of the Interim Final Rule
B. Public Comments

IV.

Summary of the Final Rule

V.

Administrative Law Matters
A. Administrative Procedure Act
B. Congressional Review Act
C. Paperwork Reduction Act
D. Regulatory Flexibility Act
E. Riegle Community Development and Regulatory Improvement Act of 1994
F. Use of Plain Language
G. OCC Unfunded Mandates Reform Act of 1995 Determination

3

I.

Introduction
Impact of the COVID event on appraisals and evaluations. Due to the impact of the

COVID event 1 and the need for businesses and individuals to quickly access additional liquidity,
the agencies published an interim final rule in the Federal Register on April 17, 2020 (interim
final rule), 2 that deferred the requirement to obtain an appraisal or evaluation for up to 120 days
following the closing of a transaction for certain residential and commercial real estate
transactions, excluding transactions for acquisition, development, and construction of real estate.
The interim final rule allows businesses and individuals to quickly access liquidity from real
estate equity during the COVID event.
The agencies are adopting the interim final rule as final, with one revision in response to
comments. The amendments to the agencies’ appraisal regulations allow for the deferral of
appraisals and evaluations for qualifying transactions through December 31, 2020, as detailed
further below.
II. Background

Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989
(Title XI) 3 directs each Federal financial institutions regulatory agency to publish appraisal
regulations for federally related transactions within its jurisdiction. 4 The purpose of Title XI is

1

The coronavirus disease 2019 outbreak was declared a national emergency under Proclamation
No. 9994, 85 FR 15337 (Mar. 18, 2020).
2
85 FR 21312.
3
12 U.S.C. 3331 et seq.; Pub. L. No. 101-73, 103 Stat. 183 (1989).
4
The term “Federal financial institutions regulatory agencies” means the Board, the FDIC, the
OCC, the National Credit Union Administration, and, formerly, the Office of Thrift Supervision.
12 U.S.C. 3350(6).

4

to protect federal financial and public policy interests 5 in real estate-related transactions by
requiring that real estate appraisals used in connection with federally related transactions (Title
XI appraisals) are performed in writing, in accordance with uniform standards, by individuals
whose competency has been demonstrated and whose professional conduct will be subject to
effective supervision. 6
Title XI directs the agencies to prescribe appropriate standards for Title XI appraisals
under the agencies’ respective jurisdictions. 7 At a minimum, Title XI provides that a Title XI
appraisal must be: (1) performed in accordance with the Uniform Standards of Professional
Appraisal Practice (USPAP); (2) a written appraisal, as defined by Title XI; and (3) subject to
appropriate review for compliance with USPAP. 8 While appraisals ordinarily are completed
before a lender and borrower close a real estate transaction, there is no specific requirement in
USPAP that appraisals be completed at a specific time relative to the closing of a transaction.
All federally related transactions must have Title XI appraisals. Title XI defines a
federally related transaction as a real estate-related financial transaction 9 that the agencies or a

5

These federal financial and public policy interests include those stemming from the federal
government’s roles as regulator and deposit insurer of financial institutions that engage in real
estate lending and investment, guarantor or lender on mortgage loans, and as a direct party in real
estate-related financial transactions. These interests have been described in predecessor
legislation and accompanying Congressional reports. See Real Estate Appraisal Reform Act of
1988, H.R. Rep. No. 100-1001, pt. 1, at 19 (1988); 133 Cong. Rec. 33047-33048 (1987).
6
12 U.S.C. 3331.
7
12 U.S.C. 3339.
8
Id.
9
12 U.S.C. 3350(5). A real estate-related financial transaction is defined as any transaction that
involves: (i) the sale, lease, purchase, investment in or exchange of real property, including
interests in property, or financing thereof; (ii) the refinancing of real property or interests in real
property; and (iii) the use of real property or interests in property as security for a loan or
investment, including mortgage-backed securities.

5

financial institution regulated by the agencies engages in or contracts for, that requires the
services of an appraiser. 10 The agencies have authority to determine those real estate-related
financial transactions that do not require the services of an appraiser and thus are not required to
have Title XI appraisals. 11 The agencies have exercised this authority by exempting certain
categories of real estate-related financial transactions from the agencies’ appraisal
requirements. 12
The agencies have used their safety and soundness authority to require evaluations for a
subset of transactions for which an appraisal is not required. 13 Under the appraisal regulations,
for these transactions, financial institutions that are subject to the agencies’ appraisal regulations
(regulated institutions) must obtain an appropriate evaluation of real property collateral that is
consistent with safe and sound banking practices. 14
Authority to defer appraisals and evaluations. In general, the agencies require that Title
XI appraisals for federally related transactions occur prior to the closing of a federally related

10

12 U.S.C. 3350(4).
Real estate-related financial transactions that the agencies have exempted from the appraisal
requirement are not federally related transactions under the agencies’ appraisal regulations.
12
See OCC: 12 CFR 34.43(a); Board: 12 CFR 225.63(a); FDIC: 12 CFR 323.3(a). The agencies
have determined that these categories of transactions do not require appraisals by state certified
or state licensed appraisers in order to protect federal financial and public policy interests or to
satisfy principles of safe and sound banking.
13
See OCC: 12 CFR 34.43(b); Board: 12 CFR 225.63(b); and FDIC: 12 CFR 323.3(b).
Evaluations are required for exempt residential and commercial loans below the dollar value
thresholds for requiring an appraisal; exempt business loans; exempt subsequent transactions;
and transactions subject to the rural residential exemption.
14
The agencies have provided guidance on appraisals and evaluations through the Interagency
Guidelines on Appraisals and Evaluations. See 75 FR 77450 (Dec. 10, 2010), available at
https://occ.gov/news-issuances/federal-register/2010/75fr77450.pdf.
11

6

transaction. 15 The Interagency Guidelines on Appraisals and Evaluations provide similar
guidance about evaluations. 16 Under the interim final rule, deferrals of appraisals and
evaluations allow for expeditious access to credit. The agencies authorized the deferrals, which
are temporary, in response to the COVID event. Regulated institutions that defer receipt of an
appraisal or evaluation are still expected to conduct their lending activity consistent with the
underwriting principles in the agencies’ Standards for Safety and Soundness 17 and Real Estate
Lending Standards 18 that focus on the ability of a borrower to repay a loan and other relevant
laws and regulations. These deferrals are not an exercise of the agencies’ waiver authority,
because appraisals and evaluations are being deferred, not waived. The deferrals also are not a
waiver of USPAP requirements, given that (1) USPAP does not address the completion of an
appraisal assignment with the timing of a lending decision; and (2) the deferred appraisal must
be conducted in compliance with USPAP.
The deferral of evaluations reflects the same considerations relating to the impact of the
COVID event as the deferral of appraisals. The agencies require evaluations for certain exempt

15

See OCC: 12 CFR 34.42(a), 34.44(b)&(e); Board: 12 CFR 225.62(a), 225.64(b)&(e); and
FDIC: 12 CFR 323.2(a), 323.4(b)&(e) (requiring an appraisal to (1) contain sufficient
information and analysis to support the institution’s decision to engage in the transaction, and (2)
be based on the definition of market value in the regulation, which takes into account a specified
closing date for the transaction).
16
See 75 FR 77450 (Dec. 10, 2010), available at https://occ.gov/news-issuances/federalregister/2010/75fr77450.pdf.
17
OCC: 12 CFR part 30, appendix A; Board: 12 CFR part 208, appendix D-1; and FDIC: 12
CFR part 364, appendix A.
18
OCC: 12 CFR part 34, subpart D, appendix A; Board: 12 CFR part 208, subpart E, appendix
C; and FDIC: 12 CFR part 365, subpart A, appendix A. Financial institutions should have a
program for establishing the market value of real property to comply with these real estate
lending standards, which require financial institutions to determine the value used in loan-tovalue calculations based in part on a value set forth in an appraisal or an evaluation.

7

transactions as a matter of safety and soundness. Evaluations do not need to comply with
USPAP but must be sufficiently robust to support a valuation conclusion. An evaluation can be
less complex than an appraisal and usually takes less time to complete than an appraisal, and
commonly involves a physical property inspection. For these reasons, the agencies also are
using their safety and soundness authority 19 to allow for deferral of evaluations.
By the end of the 120-day appraisal and evaluation deferral period provided by the final
rule, regulated institutions must obtain appraisals or evaluations that are consistent with safe and
sound banking practices, as required by the agencies’ appraisal regulations.
III. Overview of the Interim Final Rule and Comments
A. Overview of the Interim Final Rule
The interim final rule allows a temporary deferral of the requirements for appraisals and
evaluations under the agencies’ appraisal regulations. The deferrals apply to both residential and
commercial real estate-related financial transactions, excluding transactions for acquisition,
development, and construction of real estate. The agencies are excluding these transactions
because these loans present heightened risks not associated with the financing of existing real
estate.
Under the interim final rule, regulated institutions may close a real estate loan without a
contemporaneous appraisal or evaluation, subject to a requirement that the institution obtain the
appraisal or evaluation, as would have been required under the appraisal regulations without the
deferral, within a period of 120 days after the closing of the transaction. While appraisals and
evaluations can be deferred, the agencies expect regulated institutions to use best efforts and
available information to develop a well-informed estimate of the collateral value of the subject

19

See 12 U.S.C. 1831p-1.
8

property. For purposes of the risk-weighting of residential mortgage exposures, an institution’s
prudent underwriting estimation of the collateral value of the subject property will be considered
to meet the agencies’ appraisal and evaluation requirements during the deferral period. 20 In
addition, the agencies continue to expect regulated institutions to adhere to internal underwriting
standards for assessing borrowers’ creditworthiness and repayment capacity, and to develop
procedures for estimating the collateral’s value for the purposes of extending or refinancing
credit. Transactions for acquisition, development, and construction of real estate are excluded
because repayment of those transactions is generally dependent on the completion or sale of the
property being held as collateral as opposed to repayment generated by existing collateral or the
borrower. The agencies also expect regulated institutions to develop an appropriate risk
mitigation strategy if the appraisal or evaluation ultimately reveals a market value significantly
lower than the expected market value. A regulated institution’s risk mitigation strategy should
consider all risks that affect the institution’s safety and soundness, balanced with mitigation of
financial harm to COVID event affected borrowers. The temporary provision permitting
regulated institutions to defer an appraisal or evaluation for eligible transactions will expire
on December 31, 2020 (a transaction closed on or before December 31, 2020, is eligible for a
deferral), unless extended by the agencies. The agencies believe that the limited timeframe for
the deferral strikes the right balance between safety and soundness and the need for immediate
relief due to the COVID event.
B. Public Comments
The agencies collectively received eleven comments from trade associations representing
banks, appraisers, and from individuals in response to the interim final rule. The majority of

20

See OCC: 12 CFR 3.32(g); Board: 12 CFR 217.32(g); and FDIC: 12 CFR 324.32(g).
9

commenters supported the agencies’ action and stated that appraisal and evaluation deferrals
would be helpful to businesses and consumers during the COVID event. Commenters also
requested clarification of certain aspects of the interim final rule. Two commenters requested
that the agencies add a definition of acquisition, development, and construction transactions for
purposes of this rule and that the agencies clarify risk management practices after the deferral
period. Two commenters asked the agencies to reconsider the interim final rule, mainly over
concern that delayed appraisals and evaluations might not support the related credit extensions
and the loans would give rise to excessive leverage. One commenter asked the agencies to
describe how appraisers should date deferred appraisals. One commenter asked the agencies to
make the deferral permanent as a way to address the ongoing problem of appraiser shortages in
rural areas.
Commenters in support of the interim final rule stated that it would provide households
and businesses with needed relief during the COVID event. Several commenters stated the
interim final rule would provide consumers with quick access to liquidity from real estate equity.
Another commenter stated that flexibilities shown by the agencies in response to the COVID
event, including the temporary amendment implemented by the interim final rule, would help
community banks serve their clients and would not compromise safety and soundness or credit
quality. Another commenter indicated the interim final rule would alleviate a bottleneck or
freeze of appraisal and evaluation services in certain geographical areas. Another commenter
stated that the interim final rule would allow banks to complete real estate transactions within the
normal timeframes. A commenter stated that banks would use the deferral prudently, for
creditworthy borrowers. Commenters also expressed support for the agencies making the
interim final rule effective immediately.

10

Commenters who opposed the interim final rule expressed concern that the deferred
appraisals and evaluations might not support the loan amount and that after the 120-day deferral
period, loans would give rise to excessive leverage. Another expressed concern about sudden
defaults and potential miscalculation of collateral values. Commenters also were concerned
about professionalism in valuations, stating that insured professionals should be involved from
the outset of real estate lending. Commenters also stated that a well-informed estimate of
collateral value, as required by the interim final rule, may be difficult to develop for complex
commercial real estate transactions.
Definition of Acquisition, Development, and Construction.
Two commenters requested the agencies provide clarity about the scope of “acquisition,
development, and construction” transactions that are excluded from the interim final rule. One
commenter stated there is confusion in the industry about the meaning of the term. Another
commenter asked the agencies to confirm that the definition found in the instructions to the
Federal Financial Institutions Examination Council (FFIEC) Schedule RC-C, Part I, “Loan and
Leases,” 21 of the Consolidated Reports of Condition and Income (Call Report), for the three
versions of the Call Report (FFIEC 031, FFIEC 041, and FFIEC 051), is the definition that
should apply to real estate appraisals for purposes of “acquisition, development, and
construction” in the interim final rule.
After consideration of these comments, the agencies are clarifying that transactions for
the “acquisition, development, and construction” of real estate excluded from the 120-day
deferral period mean, for purposes of this rule, those loans described in the Instructions for

21

See https://www.ffiec.gov/pdf/FFIEC_forms/FFIEC031_FFIEC041_202006_i.pdf. See also
https://www.ffiec.gov/pdf/FFIEC_forms/FFIEC051_202006_i.pdf.
11

Schedule RC-C, “Loans and Lease Financing Receivables,” Part I, “Loans and Leases,” item 1.a,
“Construction, land development, and other land loans,” of the Call Report. The instructions for
Schedule RC-C describe such loans as loans secured by real estate made to finance (a) land
development (i.e., the process of improving land – laying sewers, water pipes, etc.) preparatory
to erecting new structures, (b) the on-site construction of industrial, commercial, residential, or
farm buildings (including not only construction of new structures, but also additions or
alterations to existing structures and the demolition of existing structures to make way for new
structures), (c) loans secured by vacant land, except land known to be used or useable for
agricultural purposes, such as crop and livestock production, (d) loans secured by real estate the
proceeds of which are to be used to acquire and improve developed and undeveloped property,
and (e) loans made under Title I or Title X of the National Housing Act that conform to the
definition of construction stated above and that are secured by real estate. This is consistent with
the agencies’ intent in excluding certain “acquisition, development, and construction”
transactions from the 120-day deferral period, and reflects institutions’ routine reporting of such
assets for purposes of the Call Report.
Managing Loans Using COVID event Flexibilities.
One commenter requested that the agencies clarify post-crisis expectations for managing
loans for which regulatory flexibilities have been used. Generally, the agencies expect that, after
the COVID event, banks should continue to adhere to practices consistent with the established
safety and soundness standards and should refer to risk management guidance for managing
loans that have been issued during the COVID event. Existing flexibilities in appraisal standards
and the interagency appraisal regulations are described in the Interagency Statement on
Appraisals and Evaluations for Real Estate Related Financial Transactions Affected by the

12

Coronavirus. 22 Institutions should also consider the Joint Statement on Additional Loan
Accommodations Related to COVID-19 23 (Joint Statement), issued by the FFIEC member
agencies. 24 The Joint Statement provides guidance on managing loans as they approach the end
of COVID event-related accommodation periods. The Joint Statement also provides guidance on
offering additional accommodations.
Commenters also requested that the agencies provide a remedy for loans with deferred
appraisals when the appraised value is lower than expected. The agencies did not prescribe
methods or documentation standards for valuations estimated during the deferral period, but
prudent institutions should retain information that was used to support a best estimate.
Institutions should continue to develop a loan-to-value estimate in accordance with real estate
lending standards and overall standards for safety and soundness. Some examples of information
that may help to develop an informed estimate are existing appraisals, tax assessed values,
comparable sales, and lender estimates. As stated in the interim final rule, the agencies expect
each institution to develop an appropriate risk mitigation strategy if the appraisal or evaluation
ultimately determines a market value for a property that is significantly lower than expected
when the loan was made. Appropriate risk mitigation strategies may vary based on
circumstances and borrower. The Joint Statement clarifies that a reasonable accommodation
may not necessarily result in an adverse risk rating solely because of a decline in the value of

22

See Interagency Statement on Appraisals and Evaluations for Real Estate Related
Transactions Affected by the Coronavirus (Apr. 14, 2020), available at
https://www.occ.gov/news-issuances/news-releases/2020/nr-ia-2020-54.html.
23
Joint Statement on Additional Loan Accommodations Related to COVID-19, OCC Bulletin
2020-72; Board SR Letter 20-18; FDIC Financial Institution Letter FIL-74-2020.
24
The FFIEC is composed of the following: a member of the Board, appointed by the Chairman
of the Board; the Chairman of the FDIC; the Chairman of the National Credit Union
Administration; the Comptroller of the OCC; the Director of the Bureau of Consumer Financial
Protection; and, the Chairman of the State Liaison Committee.
13

underlying collateral, provided that the borrower has the ability to perform according to the
terms of the loan. However, institutions should recognize a heightened degree of risk if the
subsequently obtained appraisal or evaluation ultimately reveals a market value significantly
lower than the expected market value and take appropriate action to mitigate the risk.
Other Expectations for Deferred Appraisals.
A commenter requested guidance on what effective date appraisers should use for
appraisals that are deferred for 120 days. The agencies continue to leave the effective dates for
these transactions to the discretion of the bank as established by the scope of work of the
appraisal engagement. Another commenter suggested the agencies tailor the interim final rule to
different types of real estate or based on the price of the property. Another commenter requested
the agencies make the changes in the interim final rule and the Interagency Statement on
Appraisals and Evaluations for Real Estate Related Transactions Affected by the Coronavirus 25
permanent. The agencies have no plans to extend or change the interim final rule at this time but
will continue to consider flexibilities as needed while supporting safe and sound collateral
valuation practices during and after the COVID event.
IV.

Summary of the Final Rule
For the reasons discussed above, the agencies are adopting as final the interim final rule

with one revision, which is the clarification of the meaning of “acquisition, development, and
construction loans.” Accordingly, under the final rule, regulated institutions may defer required
appraisals and evaluations for up to 120 days for all residential and commercial real estatesecured transactions, excluding transactions for acquisition, development, and construction of

25

Press Release: Interagency Statement on Appraisals and Evaluations for Real Estate Related
Transactions Affected by the Coronavirus (Apr. 14, 2020).
14

real estate, which mean, for purposes of this rule, loans secured by real estate made to finance (a)
land development (i.e., the process of improving land – laying sewers, water pipes, etc.)
preparatory to erecting new structures, (b) the on-site construction of industrial, commercial,
residential, or farm buildings (including not only construction of new structures, but also
additions or alterations to existing structures and the demolition of existing structures to make
way for new structures), (c) loans secured by vacant land, except land known to be used or
useable for agricultural purposes, such as crop and livestock production, (d) loans secured by real
estate the proceeds of which are to be used to acquire and improve developed and undeveloped
property, and (e) loans made under Title I or Title X of the National Housing Act that conform to
the definition of construction stated above and that are secured by real estate.
The temporary provision allowing regulated institutions to defer appraisals or evaluations
for covered transactions will expire on December 31, 2020, unless extended by the agencies. As
with the interim final rule, this final rule does not revise any of the existing appraisal exceptions
or any other requirements with respect to the performance of evaluations. The agencies expect
all appraisals, including deferred appraisals, to comply with USPAP, as issued by the Appraisal
Standards Board of the Appraisal Foundation.
V. Administrative Law Matters
A. Administrative Procedure Act
The Administrative Procedure Act (APA) generally requires that a final rule be published
in the Federal Register no less than 30 days before its effective date except for (1) substantive
rules, which grant or recognize an exemption or relieve a restriction; (2) interpretative rules and
statements of policy; or (3) as otherwise provided by the agency for good cause. 26 Because the
26

5 U.S.C. 553(d).
15

final rule relieves a restriction, the final rule is exempt from the APA’s delayed effective date
requirement. 27 Additionally, the agencies find good cause to publish the final rule with an
immediate effective date. The agencies believe that the public interest is best served by
implementing the final rule as soon as possible. As discussed above, recent events have
suddenly and significantly affected global economic activity, increasing businesses’ and
households’ need to have timely access to liquidity from real estate equity. In addition, the
spread of COVID-19 has greatly increased the difficulty of performing real estate appraisals and
evaluations in a timely manner. The relief provided by the final rule will continue to allow
regulated institutions to better focus on supporting lending to creditworthy households and
businesses in light of recent strains on the U.S. economy as a result of COVID-19, while
reaffirming the safety and soundness principle that valuation of collateral is an essential part of
the lending decision. Finally, the agencies believe that implementing the final rule as soon as
possible, with its clarifying language, is consistent with the agencies’ intent to continue to grant
expedited relief to the regulated entities. Therefore, the final rule will become effective
[INSERT DATE OF PUBLICATION IN FEDERAL REGISTER] through December 31, 2020.
B. Congressional Review Act
For purposes of Congressional Review Act, the Office of Management and Budget
(OMB) makes a determination as to whether a final rule constitutes a “major” rule. 28 If a rule is
deemed a “major rule” by the OMB, the Congressional Review Act generally provides that the
rule may not take effect until at least 60 days following its publication. 29

27
28
29

5 U.S.C. 553(d)(1).
5 U.S.C. 801 et seq.
5 U.S.C. 801(a)(3).
16

The Congressional Review Act defines a “major rule” as any rule that the Administrator
of the Office of Information and Regulatory Affairs of the OMB finds has resulted in or is likely
to result in (A) an annual effect on the economy of $100,000,000 or more; (B) a major increase
in costs or prices for consumers, individual industries, Federal, State, or local government
agencies or geographic regions; or (C) significant adverse effects on competition, employment,
investment, productivity, innovation, or on the ability of United States-based enterprises to
compete with foreign-based enterprises in domestic and export markets. 30
As required by the Congressional Review Act, the agencies will submit the final rule and
other appropriate reports to Congress and the Government Accountability Office for review.
C. Paperwork Reduction Act
In accordance with the requirements of the Paperwork Reduction Act of 1995 31 (PRA),
the agencies may not conduct or sponsor, and a respondent is not required to respond to, an
information collection unless it displays a currently valid OMB control number. The agencies
have reviewed this final rule and determined that it would not introduce any new or revise any
collection of information pursuant to the PRA. Therefore, no submissions will be made to OMB
for review.
D. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) requires an agency to consider whether the rules it
proposes will have a significant economic impact on a substantial number of small entities. The
RFA applies only to rules for which an agency publishes a general notice of proposed
rulemaking pursuant to 5 U.S.C. 553(b). Since the agencies were not required to issue a general

30
31

5 U.S.C. 804(2).
44 U.S.C. 3501-3521.
17

notice of proposed rulemaking associated with the interim final rule or this final rule, no RFA is
required. Accordingly, the agencies have concluded that the RFA’s requirements relating to
initial and final regulatory flexibility analysis do not apply.
E. Riegle Community Development and Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the Riegle Community Development and Regulatory
Improvement Act (RCDRIA), 32 in determining the effective date and administrative compliance
requirements for new regulations that impose additional reporting, disclosure, or other
requirements on insured depository institutions (IDIs), each Federal banking agency must
consider, consistent with the principle of safety and soundness and the public interest, any
administrative burdens that such regulations would place on depository institutions, including
small depository institutions, and customers of depository institutions, as well as the benefits of
such regulations. In addition, section 302(b) of RCDRIA requires new regulations and
amendments to regulations that impose additional reporting, disclosure, or other new
requirements on IDIs generally to take effect on the first day of a calendar quarter that begins on
or after the date on which the regulations are published in final form. 33 Each Federal banking
agency has determined that the final rule would not impose any additional reporting, disclosure,
or other new requirements on IDIs, and thus the requirements of the RCDRIA do not apply.
F. Use of Plain Language
Section 722 of the Gramm-Leach-Bliley Act 34 requires the Federal banking agencies to
use plain language in all proposed and final rules published after January 1, 2000. The agencies

32
33
34

12 U.S.C. 4802(a).
12 U.S.C. 4802.
12 U.S.C. 4809.
18

have sought to present the final rule in a simple and straightforward manner and did not receive
any comments on the use of plain language.
G. OCC Unfunded Mandates Reform Act of 1995 Determination
Under the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531 et seq., the
OCC prepares a budgetary impact statement before promulgating a rule that includes a Federal
mandate that may result in the expenditure by State, local, and tribal governments, in the
aggregate, or by the private sector, of $100 million or more in any one year. However, the
UMRA does not apply to final rules for which a general notice of proposed rulemaking was not
published. 35 Therefore, because the OCC found good cause to dispense with notice and
comment for the interim final rule, the OCC has not prepared an economic analysis of the final
rule under the UMRA.
List of Subjects
12 CFR Part 34
Appraisal, Appraiser, Banks, Banking, Consumer protection, Credit, Mortgages, National banks,
Reporting and recordkeeping requirements, Savings associations, Truth in lending.
12 CFR Part 225
Administrative practice and procedure, Banks, banking, Federal Reserve System, Capital
planning, Holding companies, Reporting and recordkeeping requirements, Securities, Stress
testing.
12 CFR Part 323
Banks, banking, Mortgages, Reporting and recordkeeping requirements, Savings associations.
DEPARTMENT OF THE TREASURY

35

See 2 U.S.C. 1532(a).
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Office of the Comptroller of the Currency
12 CFR Chapter I
Authority and Issuance
For the reasons set forth in the joint preamble, the OCC amends part 34 of chapter I of title
12 of the Code of Federal Regulations as follows:
PART 34—REAL ESTATE LENDING AND APPRAISALS
1. The authority citation for part 34 continues to read as follows:
Authority: 12 U.S.C. 1, 25b, 29, 93a, 371, 1462a, 1463, 1464, 1465, 1701j-3, 1828(o),
3331 et seq., 5101 et seq., and 5412(b)(2)(B), and 15 U.S.C. 1639h.
2. Section 34.43 is amended by revising paragraph (f) to read as follows:
§ 34.43 Appraisals required; transactions requiring a State certified or licensed appraiser.
*****
(f) Deferrals of appraisals and evaluations for certain residential and commercial transactions.
(1) 120-day grace period. The completion of appraisals and evaluations required under
paragraphs (a) and (b) of this section may be deferred up to 120 days from the date of closing.
(2) Covered transactions. The deferrals authorized under paragraph (f)(1) of this section
apply to all residential and commercial real estate-secured transactions, excluding transactions
for the acquisition, development, and construction of real estate which, for purposes of this rule,
mean those loans described in this paragraph (f)(2)(A) – (D). The term “construction” as used in
this paragraph (f)(2) includes not only construction of new structures, but also additions or
alterations to existing structures and the demolition of existing structures to make way for new
structures. The following loan transactions are excluded from the deferrals authorized under
paragraph (f)(1) of this section:

20

(i) Loans secured by real estate made to finance:
(A) Land development (such as the process of improving land – laying sewers, water
pipes, etc.) preparatory to erecting new structures; or
(B) The on-site construction of industrial, commercial, residential, or farm
buildings;
(ii) Loans secured by vacant land (except land known to be used or usable for
agricultural purposes);
(iii) Loans secured by real estate to acquire and improve developed or undeveloped
property; and
(iv) Loans made under Title I or Title X of the National Housing Act that:
(A) Conform to the definition of “construction” as defined in paragraph (f)(2) of
this section; and
(B) Are secured by real estate.
(3) Sunset. The appraisal and evaluation deferrals authorized by paragraph (f) of this
section will expire for transactions closing after December 31, 2020.
*****

Federal Reserve Board
12 CFR Chapter II
Authority and Issuance
For the reasons set forth in the joint preamble, the Board amends part 225 of chapter II of
title 12 of the Code of Federal Regulations as follows:
PART 225—BANK HOLDING COMPANIES AND CHANGE IN BANK CONTROL
(REGULATION Y)
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3. The authority citation for part 225 continues to read as follows:
Authority: 12 U.S.C. 1817(j)(13), 1818, 1828(o), 1831i, 1831p-1, 1843(c)(8), 1844(b),
1972(l), 3106, 3108, 3310, 3331 et seq., 31206, 31207, and 31209; 15 U.S.C. 1681s, 1681w,
6801 and 6805.
4. Section 225.63 is amended by revising paragraph (f) to read as follows:
§ 225.63 Appraisals required; transactions requiring a State certified or licensed appraiser.
*****
(f) Deferrals of appraisals and evaluations for certain residential and commercial transactions.
(1) 120-day grace period. The completion of appraisals and evaluations required under
paragraphs (a) and (b) of this section may be deferred up to 120 days from the date of closing.
(2) Covered transactions. The deferrals authorized under paragraph (f)(1) of this section
apply to all residential and commercial real estate-secured transactions, excluding transactions
for the acquisition, development, and construction of real estate which, for purposes of this rule,
mean those loans described in this paragraph (f)(2)(A) – (D). The term “construction” as used in
this paragraph (f)(2) includes not only construction of new structures, but also additions or
alterations to existing structures and the demolition of existing structures to make way for new
structures. The following loan transactions are excluded from the deferrals authorized under
paragraph (f)(1) of this section:
(i) Loans secured by real estate made to finance:
(A) Land development (such as the process of improving land – laying sewers, water
pipes, etc.) preparatory to erecting new structures; or
(B) The on-site construction of industrial, commercial, residential, or farm
buildings;

22

(ii) Loans secured by vacant land (except land known to be used or usable for
agricultural purposes);
(iii) Loans secured by real estate to acquire and improve developed or undeveloped
property; and
(iv) Loans made under Title I or Title X of the National Housing Act that:
(A) Conform to the definition of “construction” as defined in paragraph (f)(2) of
this section; and
(B) Are secured by real estate.
(3) Sunset. The appraisal and evaluation deferrals authorized by paragraph (f) of this
section will expire for transactions closing after December 31, 2020.
*****

Federal Deposit Insurance Corporation
12 CFR Chapter III
Authority and Issuance
For the reasons set forth in the joint preamble, the FDIC amends part 323 of chapter III
of title 12 of the Code of Federal Regulations as follows:
9. The authority citation for part 323 continues to read as follows:
Authority: 12 U.S.C. 1818, 1819(a) (“Seventh” and “Tenth”), 1831p–1 and 3331 et seq.
10. Section 323.3 is amended by revising paragraph (g) to read as follows:
§ 323.3 Appraisals required; transactions requiring a State certified or licensed
appraiser.
*****
(g) Deferrals of appraisals and evaluations for certain residential and commercial transactions.

23

(1) 120-day grace period. The completion of appraisals and evaluations required under
paragraphs (a) and (b) of this section may be deferred up to 120 days from the date of closing.
(2) Covered transactions. The deferrals authorized under paragraph (g)(1) of this section
apply to all residential and commercial real estate-secured transactions, excluding transactions
for the acquisition, development, and construction of real estate which, for purposes of this rule,
mean those loans described in this paragraph (g)(2)(A) – (D). The term “construction” as used in
this paragraph (g)(2) includes not only construction of new structures, but also additions or
alterations to existing structures and the demolition of existing structures to make way for new
structures. The following loan transactions are excluded from the deferrals authorized under
paragraph (g)(1) of this section:
(i) Loans secured by real estate made to finance:
(A) Land development (such as the process of improving land – laying sewers, water
pipes, etc.) preparatory to erecting new structures; or
(B) The on-site construction of industrial, commercial, residential, or farm
buildings;
(ii) Loans secured by vacant land (except land known to be used or usable for
agricultural purposes);
(iii) Loans secured by real estate to acquire and improve developed or undeveloped
property; and
(iv) Loans made under Title I or Title X of the National Housing Act that:
(A) Conform to the definition of “construction” as defined in paragraph (g)(2) of
this section; and
(B) Are secured by real estate.

24

(3) Sunset. The appraisal and evaluation deferrals authorized by this paragraph (g) will
expire for transactions closing after December 31, 2020.
*****

Brian P. Brooks
Acting Comptroller of the Currency
Office of the Comptroller of the Currency
Board of Governors of the Federal Reserve System.
Ann E. Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.
Dated at Washington, DC, on or about September 15, 2020.
By order of the Board of Directors.
James P. Sheesley,
Assistant Executive Secretary.

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