The Appraisal Institute
has called for congressional oversight in response to the National Credit Union Administration’s (NCUA) decision to increase the threshold on appraisals for non-residential real estate loans from $250,000 to $1 million.
The Appraisal Institute noted that three of the federal banking regulatory agencies–the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Federal Reserve Board–approved increasing the commercial appraisal threshold from $250,000 to $500,000.
Credit unions originated $67 billion in commercial loans last year, and the Appraisal Institute warned that the NCUA’s action could spur the other regulatory agencies to follow suit.
“This is an outlandish scenario for anyone who cares about the safety and soundness of the nation’s commercial real estate lending system, and it could recreate conditions that led to the financial crisis of the late 2000s,” said Appraisal Institute President Stephen S. Wagner. “The NCUA’s ill-conceived, damaging decision shows overwhelmingly the need for immediate, rigorous congressional oversight.”
Wagner added that his organization was “working with members of Congress and their staffs to bring about meaningful change that will help prevent this type of outrageously heedless public policy making in the future.”