Under FIRREA, which federal agency is responsible for overseeing the activities of state appraiser regulatory agencies?
Correct Answer
C) Appraisal Subcommittee (ASC)
Why this is correct: The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) established the Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council. As the original explanation notes, the ASC's primary role is to oversee and monitor state appraiser regulatory agencies to ensure they maintain compliant licensing/certification programs and enforce USPAP. Why the other choices are wrong: The 'Federal Reserve Board', 'Federal Deposit Insurance Corporation (FDIC)', and 'Office of the Comptroller of the Currency (OCC)' are federal banking regulators that enforce appraisal requirements for the institutions they supervise, but they do not oversee the state agencies themselves. That specific oversight function belongs to the ASC. Exam tip: FIRREA created the ASC for oversight of the states. The banking agencies (Fed, FDIC, OCC) enforce appraisal rules for banks.
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
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 USPAP Questions
An appraiser is analyzing three comparable sales with the following data: Sale 1: $350,000 with +$10,000 adjustments; Sale 2: $340,000 with -$5,000 adjustments; Sale 3: $360,000 with -$15,000 adjustments. What are the adjusted sale prices?
A lender orders an appraisal for a $300,000 residential loan. After receiving the appraisal, the loan officer contacts the appraiser requesting that certain language be changed to better support the loan approval. This scenario represents a violation of:
How often must appraisers complete continuing education to maintain their license or certification?
Under FIRREA, which federal agency was given the authority to set minimum standards for real estate appraisers performing appraisals in federally related transactions?
How often must licensed and certified appraisers complete continuing education to maintain their credentials according to AQB requirements?
FIRREA was enacted primarily in response to which financial crisis?
In a narrative appraisal report, which section would typically contain the appraiser's analysis of highest and best use?
A narrative appraisal report for a commercial property must include detailed analysis of income, expenses, and capitalization rates. This level of detail is primarily required because:
Under the Dodd-Frank Act, which entity is responsible for establishing appraisal standards for federally related transactions?
In the URAR form, what does the appraiser indicate in the 'Subject' column for site size?
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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:
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