Last year, Florida real estate brokers and appraisers expended a tremendous amount of energy, effort and human capital to ensure HB 303 passed the Florida Legislature and was signed into law by the Governor. It was clear that Appraisal Management Companies were endangering the public, improperly influencing appraisers, utilizing appraisers lacking the necessary competence, and jeopardizing transactions. As part of the negotiations, sponsors agreed to an implementation date of July 1, 2011.
The United States’ Congress recognized the same potential for danger to the public, and included a requirement for states to regulate Appraisal Management Companies in the Dodd-Frank Wall Street Reform and Consumer Protection Act. The minimum requirements in the Dodd-Frank Act are virtually identical to those in the Florida law passed last year.
Unfortunately, the Florida Legislature, in their quest to avoid what they view to be unnecessary regulation, has several bills that seek to delay implementation of Appraisal Management Company registration until July 1, 2014. Of course, this is not explicitly stated in the several bills under consideration, and making their way through the committee process. Among them is CS/HB 5007. The language to delay implementation looks like this:
Section 58. (1) Effective upon this act becoming a law, section 10 of chapter 2010-84, Laws of Florida, is amended to read:
Section 10. This act shall take effect July 1, 2014
(2) If this act becomes a law after June 30, 2011, this section shall operate retroactively to June 30, 2011.
The rationale provided in staff analysis is that it is wise for Florida to wait until the affected Federal Agencies adopt their rules and regulations for the states to follow. I believe this is faulty reasoning for several reasons. Among them are:
• Florida is a leader, and should not be waiting for Federal Agencies to tell us how to protect our citizens, conduct our business, or toe their line.
• There is no significant conflict between the language of HB 303 and what is required by Dodd-Frank.
• All the reasons the Florida Legislature and their committees cited in support of the law are true now; in some cases even more so.
• Delay in implementation will assist Appraisal Management Companies in transferring hundreds of thousands of dollars from Florida to other states.
• Delay in implementation will allow unscrupulous individuals with criminal records and administrative sanctions to continue to operate appraisal management companies in our state.
If real estate brokers and appraisers are serious about the immediate need to regulate appraisal management companies, it’s time to do something about it.
UPDATE - Bills to delay implementation of AMC Registration until July, 2014 are moving in both the House and the Senate.
House - CS/HB 5007
Senate - CS/CS/SB 1824
....and in the meantime, Appraisal Management Companies are routinely interfering with appraiser independence.