In September 2020, the Federal Reserve Board, Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation (federal bank regulatory agencies) finalized two rules, which are either identical or substantially similar to interim final rules currently in effect and issued earlier this year. They include:

• A final rule that temporarily defers appraisal and evaluation requirements for up to 120 days after the closing of certain residential and commercial real estate transactions.

• In general, the agencies require appraisals for federally related transactions that occur prior to the closing of a federally regulated transaction.

  • These rules (OCC at 12 CFR 34; Federal Reserve at 12 CFR 225; FDIC at 12 CFR 323) are commonly referred to as the “appraisal regulations” and are further supplemented by the Interagency Guidelines on Appraisals and Evaluations.
  • The final rule is substantially similar to the interim final rule issued in April 2020.
  • The rule allowed individuals and businesses to more quickly access real estate equity to help address needs for liquidity as a result of the coronavirus.
  • In response to comments, the final rule clarified the scope of “acquisition, development, and construction” transactions which are excluded from the interim final rule.
  • The final rule expired on December 31, 2020.

The rule is available at: content/pkg/FR-2020-10-16/ pdf/2020-21563.pdf.

• A final rule that neutralizes—due to the lack of credit and market risk—the regulatory capital and liquidity effects for banks that participate in certain Federal Reserve liquidity facilities.

  • The final rule pertaining to Federal Reserve liquidity facilities adopts, without change, three interim final rules issued earlier this year (March, April, and May, 2020) in which the Federal Reserve launched several lending facilities to support the economy in light of the coronavirus response.
  • The final rule neutralizes the regulatory capital and liquidity coverage ratio effects of participating in the Money Market Mutual Fund Liquidity Facility and Paycheck Protection Program Liquidity Facility because there is no credit or market risk in association with exposures pledged to these facilities.
  • As a result, the final rule will support the flow of credit to households and businesses affected by the coronavirus.
  • The effective date of the final rule is December 28, 2020.


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