AI’s Effort to Eliminate the ASC!
Refocused effort to eliminate the ASC…
It’s now much more than rumor.
There is a concerted effort to eliminate not just the Appraisal Practices Board (APB) which was the Appraisal Institute’s original target, but now a refocused effort to eliminate the Appraisal Subcommittee (ASC) itself!
Think about that folks. What started as a partisan effort to lay ground work for the eventual elimination of Dodd-Frank has quickly morphed into a behind the scenes opportunistic all out push to eliminate the ASC too!
It’s no secret among regular Appraisal Institute (AI) members or non AI appraisers that have listened to AI paid lobbyist’s testimony at public The Appraisal Foundation (TAF) meetings that they wanted the Appraisal Practices Board eliminated. Maybe AI fears they may provide better education…and for free!
These are the same people (AI lobbyists) that have repeatedly tried to claim that they speak for “all appraisers’ interests, even to the exclusion of their own interests (Redondo Beach TAF Meeting).”
According to many current AI members, they no longer listen to their own members, let alone unaffiliated appraisers or those that belong to other professional organizations.
…explore the ramifications if they successfully cause actions to eliminate the ASCAnyway, my objective is not to heap well-earned criticism on the AI, but rather to explore the ramifications if they successfully cause actions to eliminate the ASC, or usurp the rights of all other appraisers in America and/or to create an educational course monopoly-with themselves as the sole beneficiary.
Let’s assume Congress does decide to repeal Dodd-Frank. We already know they don’t like the provisions that place undue hardships on financial institutions, or the creation of the megalithic Consumer Financial Protection Bureau (CFPB). As far as appraisers are concerned, there is little effective benefit to appraisers in Dodd-Frank. Nothing that couldn’t be done better-differently. The real alarm and concern is over HOW Dodd-Frank gets repealed. Do they stop with Dodd-Frank or do they accede to AI special interests to the detriment of ALL appraisers, taxpayers and consumers?
The ASC was created at the direction of Congress in the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989. To date it has worked reasonably well despite the attacks against ASC by House Finance Subcommittee Members at the recent webinar broadcast hearings. As required by law, ASC conducts biennial audits of states appraisal licensing and regulators. The Committee member (Chair?) asked how many debarments had taken place in 25 years. While it sounded logical on the surface, it was a Catch-22 type question. If the ASC HAD debarred any state (decertification of their process) it would have resulted in
- ALL appraisers in that state becoming instantly ineligible to perform appraisals in federally related transactions.
- It would also have eliminated federally related transactions in those states.
- It would also have resulted in an overnight uproar involving elected legislators from BOTH House & Senate. As banks, lenders, state legislators and even those sanctioned regulators sought to reverse the decertification; or at worst have them modified into only Notices or Warnings.
Last year the ASC audited 29 state programs. Of those, six (20.7%) were cited as needing to improve – that’s the administrative regulatory step before decertification. Contrary to partisan comments, the ASC HAS performed its duties as intended by Congress and done so responsibly.
Are there areas that could be improved? Certainly. I can think of a few states that will not likely change bad/abusive practices with anything short of imminent threat of decertification. California and Illinois come to mind almost immediately. Maryland and Oregon could also be contenders. Please note I said threat rather than actual decertification. Of course Illinois is where the AI is home based and perhaps their influence and manipulation accounts for perceived problems there too.
In order to dismantle the ASC Congress would have to gut FIRREA 1989 which created it!
I know my party is seen as a party in favor of minimal regulations, but NO ONE in the party would be foolish enough to suggest we revert to the days of Lincoln Savings and Loan, or Keating!
Dodd Frank only provided window dressing reforms. Lofty ideals with little effective enforceability. It was onerous and cumbersome. It tried to do too much at once in too many unrelated areas. Altruistic, but lacking focus.
Dodd-Frank’s repeal need not be catastrophic. FIRREA however is another matter. Its repeal, or further watering down, or more special carve outs to accommodate the self-serving interests of only the AI will virtually guarantee new national economic disaster and across the board financial institution scandals.
NO responsible businessman wants absence of all regulation. We want prudent checks and balances and a level playing field. Prudent checks and balances are not oppressive or bad for business. On the contrary, they assure continued economic stability, health and growth in all sectors. Wall Street LIKES stability and responsible growth!
I took my first AI courses in 1986 at BIOLA College (Bible Institute of Los Angeles). There was no question after that course as to what ethical behavior was and what was not. But then again it was taught by MAI’s who took their responsibility AND Standards of Professional Practice seriously.
What has happened to the AI, or its members that makes their current leadership suddenly decide after thirty one years that their designated members need a new, special ethics course now? Have they been chipping away at generally accepted sound appraisal practices for so long that they have forgotten the fundamentals of integrity and ethical behavior that used to be their cornerstone and main claim to fame? Too many years of looking the other way when ‘special’ members were involved? Maybe that’s what happens when you try to make the CORE PRINCIPLES fit business models instead of adopting business models in accordance with core principles.
Perhaps leadership looked in an ‘ethics mirror’ and didn’t like the view.
Have basic concepts of right and wrong or common sense and professional integrity become too confusing after over 25 years of special carve outs?
The MAI’s, SRPA’s and SRA’s that I personally know have no trouble knowing or determining what is ethical and what is not. THEY learned it as children. AI (or AIREA as they used to be known) merely immortalized it (ethics) in written policies and practices…and yes documented principles. Principles AI leadership doesn’t appear to think much of anymore.
I urge ALL Members of Congress to reject this AI special interest push. Correct Dodd-Frank or repeal it as you believe best but don’t allow its desired repeal to be used as a cudgel against what is right in our regulatory system.
For the record Dodd-Frank has NEVER been an impediment to appraisals in America. There is no shortage of appraisers and Dodd-Frank is not a bar to new entries in the appraisal profession.
AI does NOT speak for all appraisal interests any more than I can claim to as a representative of the American Guild of Appraisers. There are over a dozen respected OTHER professional peers groups PLUS over 22 state coalitions that can speak for themselves IF invited to the table to do so. There are also nearly a dozen chimera “appraiser” groups formed by AMCs, and their sponsors. There are dozens of State Approved Real Estate Appraiser CE courses in America that are more cost competitive and convenient for appraisers than AI courses. The National Association of Realtors also deserves a seat at the table.
Let’s hear from ALL affected parties BEFORE we pass new laws or repeal existing ones.