Under FIRREA, which federal agency is responsible for overseeing the activities of state appraiser regulatory agencies?
Correct Answer
B) Appraisal Subcommittee (ASC)
The Appraisal Subcommittee (ASC) was created under FIRREA to monitor and review the practices, procedures, and adherence to standards of state appraiser regulatory agencies. The ASC ensures states maintain effective appraiser regulation programs.
Why This Is the Correct Answer
The Appraisal Subcommittee (ASC) was specifically created under Title XI of FIRREA to serve as the federal oversight body for state appraiser regulatory agencies. The ASC monitors state compliance with minimum criteria for appraiser certification and licensing, reviews state regulatory programs, and maintains the National Registry of appraisers. This federal oversight ensures uniformity and effectiveness in appraiser regulation across all states. The ASC also has the authority to remove a state's recognition if it fails to maintain adequate regulatory standards.
Why the Other Options Are Wrong
Option A: Federal Reserve Board
The Federal Reserve Board, while involved in banking regulation and some aspects of appraisal oversight for federally regulated financial institutions, is not the primary federal agency responsible for overseeing state appraiser regulatory agencies under FIRREA.
Option C: Federal Deposit Insurance Corporation (FDIC)
The FDIC regulates and supervises certain banks and provides deposit insurance, but it does not have the primary responsibility for overseeing state appraiser regulatory agencies under FIRREA, though it may have some involvement in appraisal-related banking regulations.
Option D: Office of the Comptroller of the Currency (OCC)
The OCC supervises national banks and federal savings associations, and while it has some role in appraisal regulations for institutions it supervises, it is not the federal agency responsible for overseeing state appraiser regulatory agencies under FIRREA.
ASC = Appraiser State Checker
Remember ASC as 'Appraiser State Checker' - the ASC checks on state appraiser programs. Also use the phrase 'FIRREA created ASC to see' (ASC = A-S-C = Appraisal Subcommittee)
How to use: When you see questions about federal oversight of state appraiser regulation under FIRREA, immediately think 'ASC = Appraiser State Checker' to recall that the Appraisal Subcommittee is the correct answer.
Exam Tip
Look for key phrases like 'state appraiser regulatory agencies,' 'FIRREA oversight,' or 'monitoring state programs' - these typically point to ASC as the answer rather than other federal banking agencies.
Common Mistakes to Avoid
- -Confusing ASC with other federal banking regulators like FDIC or OCC
- -Thinking the Federal Reserve has primary oversight responsibility
- -Not understanding that ASC oversees state agencies rather than individual appraisers directly
Concept Deep Dive
Analysis
This question tests knowledge of the regulatory structure established by the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989. FIRREA created a federal oversight system for real estate appraisers following the savings and loan crisis, establishing both federal oversight and state-level regulation. The law created the Appraisal Subcommittee (ASC) as the federal body responsible for monitoring state appraiser regulatory programs to ensure they meet minimum standards. Understanding this hierarchical regulatory structure is crucial for appraisers, as it affects licensing, continuing education, and professional standards compliance.
Background Knowledge
FIRREA was enacted in 1989 in response to the savings and loan crisis, which was partly attributed to poor real estate appraisals. The law established a dual system of federal oversight and state regulation for real estate appraisers, creating uniform minimum standards nationwide while allowing states to implement and enforce these standards.
Real-World Application
When appraisers apply for licensing or certification, they work with their state regulatory agency, but that state agency must meet ASC standards. If an appraiser moves to another state, the ASC's National Registry helps ensure their credentials are recognized because all states follow ASC-monitored minimum standards.
More Report Writing Questions
Under FIRREA, which federal agency has the authority to set minimum standards for real estate appraisals in federally related transactions?
What is the minimum transaction threshold for requiring a state licensed or certified appraiser under Title XI for most federally related transactions?
The Dodd-Frank Act established which requirement specifically related to appraisal independence?
Which of the following is NOT a responsibility of the Appraisal Subcommittee (ASC)?
State appraiser regulatory agencies are primarily responsible for which of the following functions?
People Also Study
Valuation Principles & Procedures
25% of exam
Property Description & Analysis
20% of exam
Market Analysis & Highest/Best Use
15% of exam
Appraisal Math & Statistics
15% of exam
USPAP (Ethics & Standards)
15% of exam
Related Tools
Previous Question
An appraiser receives a request to modify a completed appraisal report to remove mention of needed repairs that reduce the property value by $15,000. The request comes from the loan officer who states it will help the borrower qualify for the loan. The appraiser should:
Next Question
Which federal agency has primary oversight responsibility for the Appraisal Subcommittee (ASC)?