CFPB Director Issues Statement on Oversight of The Appraisal Foundation

CFPB Director Chopra recently submitted a public comment letter to the Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC) following a series of ASC hearings focused on appraisal bias.

The statement focuses on The Appraisal Foundation, the nonprofit organization responsible for maintaining appraisal standards, and its role in addressing appraisal bias. Director Chopra identified what he characterizes as three “deeply troubling” issues regarding The Appraisal Foundation that he claims arose during the public hearings:

• its conflict of interest policies are “deficient” compared to those of federal agencies and “raise questions about its regulatory decisions”; 

• its governance structure is “insular,” “favors private interests” and contains a “pay-to-play mechanism”; and

• its leadership selection processes “lack transparency” because ASC staff are not allowed into certain closed meetings or are not otherwise “meaningfully involved.”

Director Chopra’s statement follows a warning issued by the CFPB last year to The Appraisal Foundation that a draft of revised appraisal standards failed to adequately inform appraisers of nondiscrimination prohibitions.