Legislature(2017 - 2018)SENATE FINANCE 532
02/21/2018 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB155 | |
| HB195 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 155 | TELECONFERENCED | |
| + | HB 195 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 155
"An Act relating to the registration and regulation of
real estate appraisal management companies; relating
to the establishment of fees by the Department of
Commerce, Community, and Economic Development;
relating to the Board of Certified Real Estate
Appraisers; and relating to real estate appraisers."
9:18:14 AM
SENATOR KEVIN MEYER, SPONSOR, explained the legislation:
An Appraisal Management Company, or AMC, is an
independent entity through which mortgage lenders
order residential real estate valuation services for
properties on which they are considering extending
loans to homebuyers. AMCs fulfill an administrative
function in the appraisal process, including selecting
an appraiser and delivering the appraisal report to
the lender. Individual appraisers who work for AMCs
provide the actual property valuation services.
AMCs existed well before the 2008 global financial
crisis, and today they play an increasingly important
role as a third-party service provider in the consumer
mortgage process. AMCs have become increasingly
popular by lenders across the country to ensure
federal and state regulatory compliance and
independence between lenders and appraisers as
required by the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010. Dodd-Frank requires
that states enact comprehensive AMC oversight and
registration programs with an August 2018, deadline.
Senator Meyer believed that the legislation would help to
promote public trust, consumer protection, and establish
oversight and enforcement.
9:20:32 AM
Senator Olson asked whether commercial properties were
affected by the appraisals.
Senator Meyer thought that the appraisals applied only to
residential property but deferred to his staff for a final
answer.
9:21:14 AM
EDRA MORLEDGE, STAFF, SENATOR KEVIN MEYER, affirmed that
the bill applied only to residential real estate. She
discussed the Sectional Analysis (copy on file):
Section 1: Adds a new subsection 'j' to allow the
Dept. of Commerce, Community and Economic Development
to establish a fee for regulatory costs and a
mechanism for reporting those fees.
Section 2: Requires the department to establish a
registry fee as required by the federal government and
permits the department to remit those fees to the
federal government.
Section 3: Amends the powers and duties of the Board
of Certified Real Estate Appraisers to require
regulations for Appraisal Management Companies.
Section 4: Authorizes the Board to examine records of
AMCs, requires those companies to submit information
to the Board, and allows investigations of alleged
violations.
Sections 5 and 6: Adds a new section to the statute
regarding Appraisal Management Companies including
provisions for registration, reporting records
retention, and inspection requirements, exemptions,
prohibited practices, and disciplinary proceedings.
Section 7: Definitions "appraisal management
services," "appraisal panel," "company, controlling
person," and "principal dwelling."
Section 8: Allows for fingerprinting of a controlling
person of an Appraisal Management Company through the
Department of Public Safety.
Section 9: Allows real estate Appraisal Management
Company registry fees to be included in the definition
of program receipts and non-general fund program
receipts.
Section 10: Applicability clause this act applies to
a person offering or providing appraisal.
Co-Chair MacKinnon OPENED public testimony.
9:24:28 AM
MARK SCHIFFMAN, EXECUTIVE DIRECTOR, REAL ESTATE EVALUATION
ADVOCACY ASSOCIATION, (REEVA), MINNEAPOLIS (via
teleconference), spoke in support of the legislation. He
said that the association had supported similar legislation
in other states. He believed that the bill supported
consumer protections in the appraisal process; the
independent third party created a valuable firewall and
addressed undue influence. He said that AMCs were
integrated into the mortgage lending process as well as
secondary markets and the products provided by AMCs insured
proper valuations for the investment marketplace.
9:27:58 AM
Senator Stevens wondered whether a full-time new position
would need to be established to carry out the legislation
requirements.
Mr. Schiffman replied that licensing fees paid for the
program. He said that the need for additional staffing was
not unusual and varied from state to state.
9:29:30 AM
WILLIAM SCOGGIN, REAL ESTATE EVALUATION ADVOCACY
ASSOCIATION, NORTH CAROLINA (via teleconference),
introduced himself and indicated that he was available for
questions.
9:29:56 AM
DAVID DERRY, CHAIR, CERTIFIED REAL ESTATE APPRAISERS, KENAI
(via teleconference), testified in support of the
legislation and indicated that the board was ready to
assume oversight of AMCs. He said that the appraisal board
had been self-funded since 1991. He lamented that the
fingerprinting requirement for AMCs was cumbersome and
should be removed from the bill. He also recommended an
increased bond amount of $150,000. He believed that this
would provide a more fiduciary cushion for the state.
9:34:26 AM
Co-Chair MacKinnon clarified that the board listed in
Section 3 was an existing board; the powers and duties of
that existing board would be modified by the legislation.
Mr. Derry agreed.
Co-Chair MacKinnon asked whether the legislation created
another board in state government.
Mr. Derry replied no.
9:36:49 AM
SARA CHAMBERS, DEPUTY DIRECTOR, DIVISION OF CORPORATIONS,
BUSINESS AND PROFESSIONAL LICENSING, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, testified in
support of the legislation - with certain amendments. She
felt that the federal deadline created a sense of urgency.
She suggested that the authority to set fees in order to
recoup costs should be granted in the legislation. She
added that an extension to the effective date would allow
the board and the department the ability to adopt
regulations and set fees. She said that transitional
language would be needed in advance of the effective date.
She said that the department supported on PCN in the fiscal
note and did not believe that a full-time person would need
to be added to staff. She said that the PCN would be
supporte4d by fees and not general funds.
9:40:20 AM
Co-Chair MacKinnon requested that the department work with
her office on any amendments to the legislation.
9:40:33 AM
Senator Olson wondered about the self-regualtion of the
appraisers and worried that an appraiser could "go rouge."
Ms. Chambers replied that the program would be self-funded
and regulated by the existing Board of Certified Real
Estate Appraisers; self-regualtion was a misnomer, as the
board would be governed by the existing board process.
9:41:27 AM
Senator Stevens understood that the program would require a
half-time position but that the PCN was for a full-time
position. He wondered what the PCN would do for the other
half of their duties.
Ms. Chambers replied that the department would use the PCN
to manage the licensing work of other boards that had
produced more work than had been initially expected.
9:42:44 AM
Senator Micciche wondered how many licensees were expected
and the approximate cost of licensing.
Ms. Chambers responded that the department was working on
developing the licensing fee, 200 new licensees were
expected. This would be the only federally regulated
program for boards under the department and would require
additional scrutiny.
9:43:57 AM
Vice-Chair Bishop wondered what the economic loss to the
state would be if the bill were not passed.
Ms. Chambers thought that the appraisal management
companies that were not federally regulated would not be
able to operate in the state. She said that anything that
required federal oversight would not be able to be
regulated by a non-federally regulated AMC, which would
slow the process in the state.
Co-Chair MacKinnon queried Mr. Derry's thoughts on the
matter.
Mr. Derry shared that it could constrict potential for
financing for home purchases, which would negatively affect
the entire residential market.
9:47:16 AM
Co-Chair MacKinnon understood that 10 to 15 percent of the
mortgages in Alaska were processed through Fanny Mae or
Freddy Mac.
Mr. Derry replied that the mortgage funder was not the
issue, whether the transaction was federally regulated
would be what would impact AMCs under the Dodd-Frank Act.
9:49:00 AM
Co-Chair MacKinnon CLOSED public testimony.
Co-Chair MacKinnon stated that amendments would be due the
following Friday at 5pm.
SB 155 was HEARD and HELD in committee for further
consideration.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 155 AMC Framework - Lexology Article.pdf |
SFIN 2/21/2018 9:00:00 AM |
SB 155 |
| SB 155 AMC Registry Fees - Lexology Article.pdf |
SFIN 2/21/2018 9:00:00 AM |
SB 155 |
| SB 155 Enacted State AMC Laws.pdf |
SFIN 2/21/2018 9:00:00 AM |
SB 155 |
| SB 155 Sponsor Statement.pdf |
SFIN 2/21/2018 9:00:00 AM |
SB 155 |
| SB 155 Support Alaska Bankers Association.pdf |
SFIN 2/21/2018 9:00:00 AM |
SB 155 |
| SB155 Sectional Summary - Sponsor.pdf |
SFIN 2/21/2018 9:00:00 AM |
SB 155 |
| SB 155 Support Wells Fargo.pdf |
SFIN 2/21/2018 9:00:00 AM |
SB 155 |
| SB 155 Support REVAA.pdf |
SFIN 2/21/2018 9:00:00 AM |
SB 155 |
| SB 155 Support Alaska Chamber.pdf |
SFIN 2/21/2018 9:00:00 AM |
SB 155 |
| HB 195 Background Document.pdf |
SFIN 2/21/2018 9:00:00 AM |
HB 195 |
| HB 195 Sectional Analysis.pdf |
SFIN 2/21/2018 9:00:00 AM |
HB 195 |
| HB 195 Support Letters.pdf |
SFIN 2/21/2018 9:00:00 AM |
HB 195 |
| HB 195 Transmittal Letter.pdf |
SFIN 2/21/2018 9:00:00 AM |
HB 195 |
| HB 195 Opposition Lynch.pdf |
SFIN 2/21/2018 9:00:00 AM |
HB 195 |
| HB 195 Letter of Support McCue.pdf |
SFIN 2/21/2018 9:00:00 AM |
HB 195 |
| HB 195 Opposition Opheim.pdf |
SFIN 2/21/2018 9:00:00 AM |
HB 195 |