OCC 2000-33
Subject: Statement on Appraisal Standards for Federally
Related Transactions
Description: Real Estate Appraisals
Date: December 26, 2000

TO: Chief Executive Officers of All National Banks,
Departments and Division Heads, and All Examining
Personnel

The Appraisal Standards Board (ASB) of The Appraisal
Foundation recently released the attached STATEMENT
ON APPRAISAL STANDARDS NO. 10 (SMT-10), SUBJECT:
"Assignments for Use by a Federally Insured Depository
Institution in a Federally Related Transaction."  The
statement was issued in response to indications that
some appraisers are not following the Uniform Standards
of Professional Appraisal Practice (USPAP) and the
agencies' appraisal regulations (Office of the
Comptroller of the Currency (OCC), Federal Reserve
Board, Federal Deposit Insurance Corporation, and the
Office of Thrift Supervision) when conducting
appraisals for federally regulated institutions.  Most
of the identified practices involved appraisals for
commercial real estate properties, residential tract
development projects, appraiser independence,
and appraisal reviews.  The attached ASB statement
provides additional guidance on these issues.   

Each national bank should review the issues raised
in Statement No. 10 and confirm that their appraisal
function complies with the OCC's appraisal regulation,
12 CFR 34, Subpart C, the Interagency Appraisal and
Evaluation Guidelines (October 1994) (Originally issued
as OCC 94-55.  Incorporated as appendix E in the
"Commercial Real Estate and Construction Lending"
booklet of the Comptroller's Handbook, November 1995)
and USPAP.  An institution's internal controls must
promote compliance with the OCC's appraisal regulation,
the guidelines, and industry appraisal standards and
ensure that the institution engages competent and
ethical appraisers. When utilizing appraisal services,
if management determines that a state-licensed or
certified appraiser violates USPAP, applicable laws or
regulations, or engages in unethical or unprofessional
conduct, the institution should make a referral to the
appropriate state appraiser regulatory authority.   

The ASB periodically issues statements on appraisal
standards to clarify, interpret, explain, or elaborate
on USPAP.  This statement will be incorporated along
with other revisions into the USPAP 2001 edition,
effective January 1, 2001.  The USPAP 2001 edition can
be ordered from The Appraisal Foundation at
(202) 347-7722 or through its Web site:
http://www.appraisalfoundation.org.

If you have any questions about this statement or the
OCC's appraisal regulation or Guidelines, please contact
Thomas Watson, national bank examiner, Credit Risk
Division, at (202) 874-5170, or your supervisory office. 




____________________________
David D. Gibbons
Deputy Comptroller for Credit Risk

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