I've always been under the impression that a financial institution must provide the applicant with a notice of right to receive a copy of appraisal, even if the financial institution never made it to the point of ordering an appraisal. To me, it seems a little crazy offering a copy of an appraisal if you don't have one to begin with. Does anyone have any insight on this matter?

Our mortgage application forms all include this disclosure, so it is not a separate form/disclousre. I think it is understood that if no appraisal was ordered or used, there is nothing to receive.

I agree there is no exemption stating "if no appraisal was ordered you don't have to give the disclosure". It only says "if you have a 1-4 family dwelling as collateral, you must give the disclosure (or give a copy of the appraisal)". But (forgive me) it's only common sense.

Assume:
I give you the disclosure.
You ask me of a copy of the appraisal.
I tell you I didn't order an appraisal.
You ask "why did you give me this disclosure then?"
I say "because federal regulations require me to give it to you"

I've never seen a bank cited or heard of a bank being criticized for not giving the disclosure if an appraisal is not used.

Ooops, I meant the disclosure is on the GFE, not the application. My bad!

The definition of appraisal, as it applies to this requirement, is basically whatever the bank uses to determine a value. This can be a conforming appsl, non-conforming, market value estimate by a realtor, in-house evaluation, etc.
This comes from 202.14(c) & says "...appraisal report means the document(s) relied upon by a creditor in evaluating the value of the dwelling."
And FWIW, I agree with David, if the customer withdraws or you deny before you "evaluate the value" ; even an examiners common sense kicks in & says no determination = no notice needed.