The Oregon Appraisal Certification and Licensure Board has been hit with a lawsuit asserting that it is flouting federal law by requiring full appraisals for real estate transactions smaller than $250,000.

At issue is an Oregon law passed in 1991 that requires licensing or certification by the state appraisal board to render an "opinion of value of property."

Chicago Title-Market Intelligence, based in Hopkinton, Mass., contends that the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 preempts Oregon's law.

Under the federal law, the four banking agencies in 1994 adopted regulations requiring only evaluations for transactions under $250,000. Chicago Title, which has been giving evaluations in Oregon for several years, argues that evaluations cost substantially less than appraisals - $70 versus $400 to $500 - and that the Oregon law is being used by the local board to line the pockets of the state's appraisers.

"The state appraisal board is a self-interested group of appraisers that is masquerading as a state-sanctioned agency," said Mark Sennott, president and chief executive officer of Chicago Title. Mr. Sennott said the board is made up mostly of appraisers and that its administrator, Linda Riddell, is president of the Association of Appraiser Regulatory Officials, "a radical group of appraisers that has a mission to overturn, on a state-by-state basis, the federal exemption."

Steve Corson, a board spokesman, called Mr. Sennott's charges "perplexing." He said Ms. Riddell, whose term lasts through November, is the administrator of board but not a member of the board, which "has its own conscience and votes and ability to evaluate the issues that come before it.''

"It's a commonly accepted practice to include representatives of an industry who clearly know that industry and the work that is involved and who can clarify and assert the qualifications necessary to perform the work," Mr. Corson said.

The board oversees appraisers in Oregon and comprises five appraisers, two banking industry officials, two members of the public, and the director of Department of Consumer and Business Services, which oversees the board.

Heightening tensions, on April 11 the board slapped Chicago Title with a $444,500 proposed penalty for 445 "field asset verifications" that were conducted by nonlicensed people. The company has 30 days from the proposal of the penalty to respond and request a hearing.

Officials at Chicago Title and its attorneys insist that the lawsuit and the penalty are "separate and distinct" issues. "It is our view that Oregon does not have the authority to require an appraisal where federal law has specifically said that no appraisal is required," said Thomas A. Balmer, an attorney for the company. "Because Congress and banking agencies have said there is no need for an appraisal under $250,000, we feel that law preempts Oregon law."

The board argues that the federal act set minimum standards but encouraged states to regulate appraisals. "There is no expressed preemption, no implied preemption; indeed, there is the implication that states will regulate appraisals," the spokesman said.

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