Federal Agencies Submit Joint Letter Regarding Proposed USPAP Changes

On February 4, 2022, the CFPB, Federal Reserve Board, OCC, FDIC, NCUA, HUD, FHFA, and DOJ submitted a joint letter to the Appraisal Standards Board of the Appraisal Foundation.  The letter provides comments to the proposed changes for the 2023 edition of USPAP concerning the applicability of the Fair Housing Act and ECOA to appraisals.

The agencies’ joint letter focuses on the Appraisal Standards Board Ethics Rule (Ethics Rule) and Advisory Opinion 16, which prohibit appraisers from relying on “unsupported conclusions relating to characteristics such as race, color, religion, national origin, sex, sexual orientation, gender, marital status, familial status, age, receipt of public assistance income, disability, or an unsupported conclusion that homogeneity of such characteristics is necessary to maximize value.”  The agencies noted, however, that these “provisions do not prohibit an appraiser from relying on ‘supported conclusions’ based on such characteristics and, therefore, suggest that such reliance may be permissible.”  The agencies commented that nondiscrimination standards under the Fair Housing Act and ECOA are not limited only to “unsupported” conclusions, and any guidance concerning prohibited appraisal bias should be consistent with applicable fair housing and fair lending laws.