Why One Background Check Can’t Cover All Needs: Understanding the Separate Requirements for Licensing and AMC Screening.

Every day, we meet with AMCs struggling to maintain borrower trust and safety. The most common question we hear from our partners is how to handle background screening requirements during appraiser onboarding, especially when many professionals assume that holding a license is sufficient. That is because Appraisers often believe that a background check conducted for state licensure can be reused when an Appraisal Management Company (AMC) requests its own screening. However, the two processes serve entirely different regulatory and operational purposes.

For example, Mississippi law (§ 73‑34‑14) requires anyone applying for a real estate appraiser license or certification to submit to a state and FBI criminal history records check.¹ This check is conducted solely by the state licensing board to determine whether the applicant’s background “calls into question public trust.”² Under this statutory scheme, any criminal history information obtained is considered nonpublic and confidential, reserved exclusively for the board’s internal use. The law explicitly prohibits the board from releasing these records to any other person or agency, except in limited circumstances.²

Because the background check is tied to licensure eligibility, not contractor screening or vendor-risk management, its results cannot lawfully be repurposed for an AMC’s private vetting process. Statutory confidentiality and use restrictions mean that the AMC (or any private entity) has no lawful mechanism to obtain or rely on the criminal-history information the board collects.³ As a result, even though an individual is licensed, the background check completed under state law does not legally satisfy a separate background-check request from an AMC.³

As with appraisals, background check “intended use” is key to the validity and utility of the resulting report. Our advice to AMC partners is to apply the proper report for the proper objective. Leveraging a background check that is dated and not derived for the purpose of ongoing risk awareness for onboarding purposes, may not hold up with lender oversight expectations, regulator policies and ultimately client expectations. ShieldHub is purpose-built for independent contractor screening compliance, while giving appraisers secure control over how their background check data is shared.

Know your contractor. Best practices would lean toward leveraging a recent background check with regular updates or monitoring to better ensure proper risk mitigation.

  1. The law explicitly limits dissemination and use of background check information to the board’s licensing decisions. Because the check is legally tied to this specific regulatory purpose, it cannot be lawfully repurposed for external uses — including vendor-screening, AMC panel credentialing, or any private employment verification  https://law.justia.com/codes/mississippi/title-73/chapter-34/real-estate-appraiser-licensing-and-certification-act/section-73-34-14
  2. The statute explicitly designates that “any and all state or national criminal history records information obtained by the board … that is not already a matter of public record shall be deemed nonpublic and confidential information restricted to the exclusive use of the board … in evaluating the applicant’s eligibility or disqualification for licensure.” https://codes.findlaw.com/ms/title-73-professions-and-vocations/ms-code-sect-73-34-14/
  3. Background checks conducted under state licensing statutes are legally limited to the licensing purpose; re-use for unrelated purposes, such as employment or vendor risk, would violate statutory and federal privacy requirements https://le.fbi.gov/cjis-division/cjis-security-policy-resource-center
  4. As part of their onboarding process for appraisers, AMCs verify each appraiser’s state license or certification, confirm their geographic competence, check for valid Errors & Omissions (E&O) insurance, and often run background checks — including a review of disciplinary history with the state appraiser board.https://legalclarity.org/how-appraisal-management-companies-work-with-appraisers/
  5. AMCs typically conduct background checks and other due diligence exercises before appraisers become an approved provider. https://www.asc.gov/sites/default/files/2024-06/REVAA.pdf
About ShieldHub

ShieldHub is dedicated to supporting safe business and personal interactions by empowering users with the information they need to monitor and assess risk. Unlike traditional background checks, ShieldHub’s technology provides continuous criminal monitoring and scoring to ensure that our partners remain in compliance. ShieldHub currently monitors thousands of finance industry professionals and contractors, providing a secure portable background score that can be used at any ShieldHub partner. ShieldHub’s simplified contractor and employee assessment offers a streamlined, cost-effective validation and onboarding experience. Combined with standardized data and scoring, ShieldHub offers unparalleled clarity as to the scope and accuracy of the monitoring.

For Media Contact:

Bill Mohler
EVP Product & Marketing
ShieldHub
e: bill.mohler@shieldhub.com