The three largest professional appraisal organizations in the United States penned a joint letter of appreciation to the federal financial regulatory agencies, applauding them for their recognition of the importance of appraiser competency. The letter came in response to the June 22 statement, "The 2006 Revisions to the Uniform Standards of Professional Appraisal Practice (USPAP)," issued by the Federal Reserve Board, Treasury Department, Office of Thrift Supervision, Federal Deposit Insurance Corporation and National Credit Union Administration. The Appraisal Institute, American Society of Appraisers (ASA) and American Society of Farm Managers and Rural Appraisers (ASFMRA) applauded the agencies for their attention to the issue of scope of work—in particular, appraiser competency. The statement served to notify financial institutions regulated by the five agencies of the importance of ensuring that appraisals supporting federally related transactions adhere to the USPAP.
"We are pleased to see the agencies emphasize that clients should consider appraiser competency and not allow lower cost or reduced delivery time to compromise the determination of an appropriate scope of work," said Don Kelly, vice president of public affairs for the Appraisal Institute. "Inevitably, appraisal quality suffers when these variables supersede other important factors, including competency and consideration of professional credentials and designations."
The topic of appraiser competency and qualification has been an important industry issue since the enactment of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), which oversees the educational requirements, licensing and certification of appraisers and the enforcement of such processes. Of specific interest to the appraisal industry has been the repeated misinterpretation of the anti-discrimination clause contained in Section 1122(d), which has led numerous clients of appraisal services to believe that they cannot use professionally designated appraisers.
"Although FIRREA was created to increase appraiser competence, in practice, it has led to an emphasis on maintaining only minimum qualifications, curtailing the continuing development of professionalism in the appraisal industry," noted Kelly. "It's important that clients of appraisal services are cognizant of the fact that they can and should be using appraisers with the highest levels of education and experience."