Final rule follows ICBA calls for relief benefiting local communities
Washington, D.C (April 2, 2018)—The Independent Community Bankers of America® (ICBA) today thanked regulators for heeding community banker concerns in easing real estate appraisal mandates for certain transactions. As advocated by ICBA, the federal banking agencies raised the transaction-value threshold requiring commercial real estate appraisals from $250,000 to $500,000.
“ICBA commends the federal banking regulators for helping to ease regulatory burdens on community banks by allowing more institutions to use evaluations instead of appraisals,” ICBA President and CEO Camden R. Fine said. “The higher thresholds better reflect the rising cost of commercial real estate in urban communities while providing much-needed alternatives in rural areas, where there is a shortage of licensed appraisers and often few comparable sales of similar properties.”
As advocated by ICBA in a March 2016 comment letter, commercial real estate transactions valued at $500,000 or less will now require an evaluation, which can be prepared by trained community bank staff, instead of an appraisal prepared by a licensed appraiser. The threshold implemented in today’s final rule is also higher than the $400,000 threshold proposed by regulators last year. The thresholds have not been updated in many years and will provide relief that will promote lending in local communities.
ICBA and community bankers raised the issue with regulators as part of the agencies’ regulatory review under the Economic Growth and Regulatory Paperwork Reduction Act of 1996. The association continues encouraging the agencies to extend the higher threshold to for all real estate-related loans and to raise the threshold for certain qualifying real estate-secured business loans from $1 million to $2 million.
ICBA looks forward to continuing to work with regulators on these and other excessive regulatory burdens limiting economic and job growth in local communities.
The Independent Community Bankers of America®, the nation’s voice for nearly 5,700 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services. For more information, visit ICBA’s website at www.icba.org.