A proposed update of professional guidelines for property appraisals contains confusing language about what constitutes discrimination, and would even suggest appraisers could engage in “ethical” discrimination.
Folks, the following article is in the ABA Banking Journal e-newsletter, posted on Wednesday, February 15, 2023. I’m really glad this has been released. Hopefully the Appraisal Standards Board will closely examine the concerns of the regulators.
I read the USPAP 4th Exposure Draft. It contains so much new Ethics Rule “legaleze” language about conduct that it is, and can be, overwhelmingly confusing to a majority of appraisers. It’s written by lawyers in such a way that ensnaring appraisers in an alleged bias complaint with their state regulator is probable. Mounting an appropriate and successful defense can be difficult, and expensive.
The proposed, and final, language needs to be simplified.
This is the article:
Regulators take issue with discrimination definition in proposed appraisal standards
A proposed update of professional guidelines for property appraisals contains confusing language about what constitutes discrimination, and would even suggest appraisers could engage in “ethical” discrimination, regulators from across multiple federal agencies said Tuesday in a letter to the Appraisal Foundation’s Appraisal Standards Board.
The Appraisal Foundation is a nongovernmental, professional body with a congressional mandate to set appraisal standards and minimum real estate appraiser qualifications, which are adopted by states. The organization is currently in the process of updating its professional standards, the Uniform Standards of Professional Appraisal Practice.
Federal regulators had previously written to the foundation to urge it to include a detailed statement of federal prohibitions against discrimination in the standards. However, in their letter, regulators said the most recent proposed update tries to distinguish between unlawful discrimination and “unethical discrimination” — the latter a term not well established in current law or practice, they said.
“Accordingly, we believe the introduction of the term in USPAP, and the resulting need to distinguish between unethical discrimination and unlawful discrimination, would create confusion in the appraisal industry,” the regulators said.
They added that the inclusion of the term “unethical” suggests appraisers could engage in “ethical” discrimination, saying the draft further suggests such discrimination is a protected characteristic “essential to the assignment and necessary for credible assignment results.”
A ‘fifth’ is needed, in more ways than one! Exposure Draft to USPAP, that is.
After seeing the regulator’s response with concerns about how the 4th Exposure Draft anti-Bias and Discrimination addition to the Ethics Rule was being proposed, I had a suspicion that the Exposure Draft process would continue.
That was confirmed yesterday, February 16, 2023, in this news release from the Appraisal Standards Board: Appraisal Standards Board Responds to Public Feedback
The focus in USPAP has to be written more simply, and very directly as to what is expected. The previous drafts were far too complicated and confusing probably due to the high powered Washington D.C. attorneys hired to do the writing of the proposed new section in the Ethics Rule!
Watch for notice as to when the new Exposure Draft will be available for public comment. Then read it, and send in your response comments per the instructions therein.