CFPB Appraisal Fees
ASA has repeatedly stated its belief that the Fed’s interpretation and the massive loophole it created ran contrary to the plain language and clear intent of Dodd-Frank.
CFPB Reissues Interim Final Rule On Valuation Independence, Eliminates Federal Reserve Commentary Permitting AMCs To Include Their Own Payments To Appraisers To Comply With Dodd-Frank’s Customary and Reasonable Fee Requirement.
On December 22, the Consumer Financial Protection Bureau (CFPB) released an Interim Final Rule dealing with the valuation independence requirements imposed by the Dodd-Frank Act, including the law’s “customary and reasonable” fee mandate. The CFPB’s rule was republished to reflect the transfer of “rulemaking authority for a number of consumer financial protection laws from seven Federal agencies to [CFPB] as of July 21, 2011.” In republishing the Rule, CFPB made a number of “technical and conforming changes to reflect the transfer of authority and certain other changes made by the Dodd-Frank Act.”
Significantly, the CFPB’s Rule appears to have eliminated the commentary language included in the Fed’s version which allowed appraisal management companies (AMCs) to include the fees they have been paying appraisers to comply with Dodd-Frank’s “customary and reasonable” appraiser fee requirement. ASA has repeatedly stated its belief that the Fed’s interpretation and the massive loophole it created ran contrary to the plain language and clear intent of Dodd-Frank. While we are hopeful that the CFPB’s rule reflects a deliberate decision by the Bureau to reject the Fed’s dubious and troubling interpretation, we are working to get confirmation from CFPB that this is in fact the case.
CFPB has asked for stakeholder comments on the Rule, and ASA and NAIFA intend to file comments by the February 21 deadline. Relevant sections of CFPB’s Rule dealing with valuation independence is posted below. To read the full text of CFPB’s rule, click here.