The Federal Financial Institutions Examination Council today released a set of principles to guide banking regulators when monitoring for discrimination in residential property appraisals and evaluations in their examinations of supervised institutions. The guidelines seek to ensure that regulators’ compliance and risk management practices are appropriate to identify and mitigate bias in residential property valuation, the council said in a statement.
The principles should not be interpreted as new guidance for financial institutions nor as a sign of increased focus on their appraisal practices, the council said. Instead, the document is meant to offer transparency into the examination process and support risk-focused examination work.
“Financial institution supervisors routinely assess the risk management processes of institutions’ residential lending activity during both consumer compliance and safety and soundness examinations … The examination principles released today are designed for both types of examination,” FFIEC said.
