Consumer Financial Protection Bureau Director Rohit Chopra today questioned the appropriateness of having an independent nonprofit set home appraisal standards across the country, suggesting regulators may want to take a closer look at the arrangement in the future.
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. During a hearing on appraisal bias by the Appraisal Subcommittee, Chopra—a committee member—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 believe the foundation’s fees were excessive. He also noted that the subcommittee—which is composed of federal regulators—had little say over the foundation or the appraisal standards it sets.
“I think not many people understand how this Byzantine system works,” Chopra said. “And I think it is something we really need to think about, whether it is appropriate for this type of fee structure and for there to be payments, including relating to governance. That raises a lot of questions for this subcommittee, for regulators, and I think for future hearings.”