The Consumer Financial Protection Bureau recently issued a new Interim Final Rule on the Truth-in-Lending Act’s provisions related to appraiser independence. This rule includes the previously issued rules relating to “customary and reasonable fees” that originally were issued by the Federal Reserve Board last year.
The CFPB Interim Final Rule was issued in order to restate all of the Federal Reserve’s Truth-in-Lending Act regulations as CFPB regulations, effective Dec. 31, 2011, as authorized by the Dodd-Frank Act. As part of this process, the CFPB adopted the Federal Reserve’s Interim Final Rule, and the agency stated its action does not constitute any new regulatory obligations.
The agencies are under statutory deadlines to complete three rulemakings; requirements for higher cost mortgages, appraisal management company registration & oversight requirements, and automated valuation model quality control standards by January 2013. No statutory deadline exists for customary and reasonable fees.
Under the Dodd-Frank Act, the Federal Reserve was required to issue an Interim Final Rule within 90 days of enactment. Dodd-Frank granted authority to issue a Final Rule on the customary and reasonable fee issue, but it must be completed together with all of the agencies, not solely by the CFPB, and no deadline for issuance was included in the Dodd-Frank Act.
The agencies may (but are not required to) promulgate a Final Rule relating to appraiser independence and customary and reasonable fees, but this is unlikely to occur until the statutory obligations are completed.
The Appraisal Institute and the American Society of Farm Managers and Rural Appraisers have urged the agencies to develop a Final Rule that brings consistency between the two “presumptions” of compliance. AI will continue to press this issue, recognizing the agencies statutory obligations regarding the other rulemaking proceedings.
If you have an “opinion of value,” please share your comments.