The director of the Consumer Financial Protection Bureau, Rohit Chopra, today questioned the appropriateness of having an independent non-profit organization set standards for home appraisals across the country, suggesting that regulators may want to look more than close the deal in the future.
The Appraisal Foundation is a non-governmental professional body mandated by Congress to establish appraisal standards and minimum real estate appraiser qualifications, which are adopted by states. During a hearing on appraisal bias For the Appraisal Subcommittee, committee member Chopra asked several pointed questions about the foundation and its funding structure, which comes from fees paid by member organizations and the sale of professional publications to appraisers. The CFPB director said he had heard from appraisers who believed the foundation’s fees were excessive. He also noted that the subcommittee, which is made up of federal regulators, had little say in the foundation or the appraisal standards it sets.
“I think not a lot of people understand how this Byzantine system works,” Chopra said. “And I think that’s something we really need to think about, whether it’s appropriate for this type of fee structure and for there to be payments, including as it relates to governance. That raises a lot of questions for this subcommittee, for regulators, and I think for future hearings.”
