HCS HB 2152 -- MISSOURI APPRAISAL MANAGEMENT COMPANY REGISTRATION
AND REGULATION ACT

SPONSOR:  Cunningham (Hobbs)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Financial
Institutions by a vote of 12 to 0.

This substitute establishes the Missouri Appraisal Management
Company Registration and Regulation Act to regulate real estate
appraisal management companies.  In its main provisions, the
substitute:

(1)  Makes it unlawful for any person to act as a real estate
appraisal management company, to directly or indirectly engage or
attempt to engage in the business of real estate appraisal
management, or to advertise or hold himself or herself out as
engaging in or conducting the business of real estate appraisal
management without being registered with the Missouri Real Estate
Appraisers Commission within the Department of Insurance,
Financial Institutions and Professional Registration;

(2)  Allows the commission to adopt the necessary rules to
implement, administer, and enforce the provisions of the
substitute;

(3)  Requires an appraisal management company to make written
application to the commission for the registration of the company
with the required fee as established by rule.  No more than 10%
of any company applying for a registration may be owned by a
person or entity who has had an appraiser license or certificate
refused, denied, canceled, revoked, or surrendered in lieu of a
pending revocation in any state.  Anyone with more than 10%
ownership in an appraisal management company must be of good
moral character and submit to a background investigation;

(4)  Prohibits an appraisal management company from employing or
contracting with a person who has had a license or certificate in
Missouri or in any other state refused, denied, canceled,
revoked, or surrendered in lieu of a pending revocation;

(5)  Requires an appraisal management company to verify before
assigning an appraisal to an appraiser that it holds a credential
in good standing with the State of Missouri and that the letters
of engagement include instructions to the appraiser to decline
the assignment in the event the appraiser is not geographically
competent or the assignment falls outside his or her scope of
practice restrictions.  Each registered company must certify
biannually that it has a system in place to verify that the
appraisers are licensed in good standing, that the appraisals are
being conducted in accordance with Uniform Standards of
Professional Appraisal Practice (USPAP), and that it maintains
detailed records for at least five years of all appraisal
services in Missouri.  A company is required to report to the
commission the results of any appraisal reviews in which an
appraisal is found to be substantially noncompliant with USPAP or
state or federal laws;

(6)  Requires an appraisal management company to separately state
to the client all fees paid to an appraiser and the fees charged
by the company for services associated with the management of the
appraisal process.  Fees must be paid to the appraiser within 30
days of the date the appraisal is transmitted with certain
exceptions;

(7)  Requires each appraisal management company to designate one
compliance manager who will be the main contact for all
communications between the commission and the company and to
contact the commission when its controlling principal, agent of
record, or ownership composition changes;

(8)  Prohibits an employee, director, officer, or agent of an
appraisal management company from influencing or attempting to
influence the development, reporting, or review of an appraisal
through coercion, extortion, collusion, compensation,
instruction, inducement, intimidation, bribery, or any other
manner as specified in the substitute;

(9)  Requires the commission to issue a unique registration
number to each appraisal management company and to publish a list
of all companies that have registered and have been issued a
number;

(10)  Requires a surety bond of $20,000 to accompany each
registration;

(11)  Allows the commission to censure an appraisal management
company, conditionally or unconditionally suspend or revoke any
registration issued under Sections 339.1100 - 339.1240, RSMo, or
impose civil penalties of up to $2,500 for each offense.  Each
day of a continued violation constitutes a separate offense, with
a maximum penalty of $25,000.  In determining the amount of the
penalty to be imposed, the commission may consider if a company
is:

(a)  Knowingly committing any act in violation of Sections
339.1100 - 339.1240;

(b)  Violating any rule adopted by the commission; or

(c)  Procuring a license by fraud, misrepresentation, or deceit;
and

(13)  Requires the commission before censuring any registrant or
suspending or revoking any registration to notify the registrant
in writing of any charges made at least 20 days before the
hearing and afford the registrant an opportunity to be heard in
person or by counsel.  Written notice will be satisfied by
personal service on the controlling person of the registrant or
the registrant's agent for service of process in this state or by
sending the notice by certified mail, return receipt requested to
the controlling person of the registrant to the registrant's
address on file with the commission.

The substitute becomes effective January 1, 2011.

FISCAL NOTE:  No impact on General Revenue Fund in FY 2011, FY
2012, and FY 2013.  Estimated Effect on Other State Funds of a
cost of $6,708 in FY 2011, an income of $2,778 in FY 2012, and an
income of $2,969 in FY 2013.

PROPONENTS:  Supporters say that the bill will provide a standard
of conduct for Missouri appraisers, further protect the consumer,
and bring greater accountability.  These changes will help to
eliminate conflicts of interest on mortgage appraisals.

Testifying for the bill were Representative Hobbs; Missouri
Appraisers Advisory Council; David Doering, Missouri Property
Appraisal, Incorporated; Sharon Lowman; Kenneth Nicholson;
Missouri Association of Relators; Jeffrey Lowman; Lee Price;
Loren and Carole Woodard, Appraisal Research Consultants; Ann
Nunn Jones; and Roland Hudson.

OPPONENTS:  Those who oppose the bill say that it is not
consistent with other bills throughout the country and needs to
be evaluated to avoid unintended consequences.

Testifying against the bill was Timothy O'Brien.

OTHERS:  Others testifying on the bill support registration of
appraisal management companies but not under the Division of
Finance.  The bill needs to be reworked to make it practical
regulatory legislation.

Testifying on the bill were Mortgage Bankers Association of
Missouri; and Missouri Bankers Association.

Missouri House of Representatives
95th General Assembly, 2nd Regular Session
Last Updated September 14, 2010 at 3:13 pm