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Federal Reserve, FDIC, OCC Reject Request for Public Hearing on Proposed Increase in Residential Appraisal Threshold

Feb 21, 2019

ASA, National Association of Realtors, Appraisal Foundation, Appraisal Institute, RICS, National Consumer Law Center Among Groups Who Called for Hearing

On February 7, the Federal Reserve, Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency (collectively, the Agencies) informed ASA and other requesting organizations that they are rejecting a reasonable request for the Agencies to hold a public hearing regarding their proposed increase in the residential appraisal threshold from its current level of $250,000 to $400,000.

In contrast to the current process, where the agencies only solicited one round of written comments, the Agencies previous consideration of whether to increase the threshold two years ago is illuminating. As part of the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) process that concluded in 2017, the agencies held four rounds of written comment submission and six rounds of public hearings, concluding that an increase in the threshold was not appropriate.

Along with ASA, numerous other interest groups had similarly asked for a hearing: The National Association of Realtors, Appraisal Foundation, Appraisal Institute, RICS, and the National Consumer Law Center all requested a public hearing.

ASA is deeply disappointed that the Agencies do not share our view that a public hearing contributes to a more robust public record when making critical decisions. Given that the regulation as proposed would exempt 72% of all Federally Related Transactions from Title XI appraisal requirements, ASA felt that a hearing was warranted, and question the extent to which the Agencies had already concluded their course of action prior to soliciting public comment.

To read the Agencies’ letter rejecting the hearing request, click here. To read ASA’s comment letter regarding the proposal, click here. To read the prior letter requesting a hearing, click here.