The American Guild of Appraisers/Guild 44 of the Office and Professional Employees International Union, AFL-CIO met with Rep. Barney Frank (D-MA) to discuss the Guild's concerns with the Federal Reserve Board's Interim Final Rule (Rule) regarding Appraiser Independence.
With the implementation of the Rule issued April 1, 2011, the FRB has introduced faulty regulation that implicitly fails to capture Congressional intent to reform the appraisal process and Appraiser Independence and the necessity to promote the use of market driven, Reasonable & Customary (R&C) fees for various valuation assignments.
By injecting a skewed "safe harbor" under Presumption One in section 42(f), the Rule has unwittingly given license to appraisal management companies (AMCs) to use their own internal, non-market, fee schedules to disproportionately justify Reasonable and Customary fees directly in opposition to the Congressional mandate throughout the Mortgage Reform and Anti-Predatory Lending Act (MRAPLA) to have such fees excluded from Reasonable and Customary fee surveys.
Guild National President Peter Vidi requested that Rep. Frank write a letter to the Federal Reserve regarding the Rule, pointing out its significant deviation from the intent of MRAPLA.
"Congressional intent to restate the market survey for Customary and Reasonable Fees was not to include fees paid by appraisal management companies," said Vidi.
Vidi also requested that Rep. Frank write a similar letter to Elizabeth Warren and the Consumer Financial Protection Bureau (CFPB) stressing the need for Appraiser Independence as a means to help safeguard public interest.
"Congressman Frank expressed an interest in doing so," said OPEIU Director of Organization and Field Services Kevin Kistler, "but has asked his staff to do additional research and report back to him with a recommendation before he makes a final decision as to whether to send a letter, as well as the substance of the letter."
Also in attendance at the meeting was Michael Dalnekoff, treasurer of the Maryland Chapter of AGA who said, "Even with the day-to-day dealings that Congressman Frank oversees, he continues to be well versed in the appraiser section of the Dodd-Frank Act. He seemed very concerned about the information we provided."