An AMC orders 2,500 appraisals in a calendar year for federally regulated financial institutions. Based on Dodd-Frank requirements, what must this AMC do?
Correct Answer
D) Register with states where they operate and meet the national registry threshold
Why this is correct: Under the Dodd-Frank Act, an Appraisal Management Company (AMC) that provides appraisal services to federally regulated financial institutions and meets or exceeds the national volume threshold (which is 250 or more appraisals per year) must register with the appraiser regulatory agency in each state where it operates. Why the other choices are wrong: Registration is not solely federal through the Appraisal Subcommittee (ASC). The 2,500 appraisals are well above the typical 250 threshold. Registering only in the state of the main office is insufficient if operating in multiple states. Exam tip: For AMC registration, think: 250+ appraisals + state registration where they do business.
Why This Is the Correct Answer
Option C is correct because 2,500 appraisals far exceeds the national registry threshold of approximately 250 appraisals annually. Under Dodd-Frank requirements, AMCs meeting this threshold must register with state regulatory agencies in every state where they conduct business with federally regulated financial institutions. The registration requirement applies to all states of operation, not just the home state, and involves both meeting the threshold and registering with appropriate state authorities.
Why the Other Options Are Wrong
State-by-State Registration Rule
Remember 'STAR': State Threshold Appraisal Registration - when AMCs hit 250+ appraisals with federally regulated institutions, they must register with States in All Regions where they operate.
How to use: When you see AMC registration questions, think STAR: check if they exceed 250 appraisals with federally regulated institutions, then remember registration is with States in All Regions of operation, not federal or home-state only.
Exam Tip
Look for the volume number first - anything significantly above 250 appraisals with federally regulated institutions triggers registration requirements, and remember it's always state-level registration in all operating states.
Common Mistakes to Avoid
- -Thinking registration is only required in the home state
- -Believing registration is handled federally through the ASC
- -Not recognizing that 2,500 appraisals exceeds the threshold
Concept Deep Dive
Analysis
This question tests knowledge of Dodd-Frank Act requirements for Appraisal Management Companies (AMCs) that work with federally regulated financial institutions. The Dodd-Frank Act established a national registry threshold system where AMCs conducting a certain volume of business must register with state regulatory agencies. The threshold is typically around 250 appraisals annually, making 2,500 appraisals significantly above this requirement. AMCs must register in each state where they conduct business, not just their home state, and registration is handled at the state level rather than federal level.
Background Knowledge
The Dodd-Frank Wall Street Reform Act established regulatory requirements for AMCs working with federally regulated financial institutions, including a national registry system administered through state agencies. AMCs meeting the threshold (typically 250+ appraisals annually) must register with state regulators in each state where they conduct business.
Real-World Application
An AMC based in California that orders appraisals in California, Nevada, and Arizona would need to register with regulatory agencies in all three states if they exceed the threshold, ensuring compliance across their entire service area.
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