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March 21, 2018

AI Backs Revisions as Senate OKs Banking Reform Bill

The Appraisal Institute led nearly three dozen valuation organizations in supporting revisions to a bipartisan Senate bill that passed March 14. The measure, which now goes to the House, rolled back many post-financial-crisis banking rules found in the Dodd-Frank Act. 
“Thank you for including several clarifying provisions relating to rural residential appraisals to Section 103 of S. 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act,” the Appraisal Institute and 33 other real estate valuation groups wrote to Sen. Mike Crapo, R-Idaho, chair of the Senate Committee on Banking, Housing and Urban Affairs.
Although the Appraisal Institute took no position on the bill, it endorsed changes to proposed appraisal exemptions found in a previous version of the measure. The bill now clarifies that a bank must engage at least three appraisers on the bank’s approved appraiser list, in the local market area and in compliance with existing appraiser independence requirements. It also establishes a reasonable timeliness standard.
“These provisions will help ensure that banks make a good faith effort to place the appraisal with local market appraisers, consistent with the bill’s intent,” the organizations’ letter stated.
The measure, which the Senate passed 67-31, marks the most significant revision of banking rules since Congress approved the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, a sweeping financial regulatory law enacted in response to the 2008 economic crisis.
Backers of the new bill argued that smaller banks shouldn't have to face the same set of strict rules as behemoth Wall Street banks that could endanger the entire financial system if they go under. Proponents of the Dodd-Frank law sharply criticized the bill, arguing it would weaken consumer protections aimed at keeping the financial system safe from another crisis.
Many of the measure’s Democratic co-sponsors are from rural states won by President Trump. They argued that measures must respond to the specific political and banking needs in their states, which they said have been hurt by consolidation in the banking industry post-Dodd-Frank.
Read the Appraisal Institute letter.

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