The Consumer Financial Protection Bureau wants The Appraisal Foundation, which sets standards for appraisers, to include “clear warnings” about federal anti-discrimination requirements in its standards and training for appraisers.
TAF’s failure to do so currently “undermine[s] a fair and competitive market free of bias and discrimination,” the CFPB said. The agency submitted a letter to TAF reiterating that appraisals fall under federal discrimination prohibitions in the Fair Housing Act and Equal Credit Opportunity Act
The agency said it is “deeply troubled” by appraisal disparities for communities and borrowers of color and by discriminatory statements found in some appraisals by the Federal Housing Finance Agency. “A biased home appraisal can worsen racial inequities and distort the housing market,” the bureau said.
The letter was jointly submitted along with senior officials from the Federal Reserve Board, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, National Credit Union Administration, Department of Housing and Urban Development, Federal Housing Finance Agency and Department of Justice.
The CFPB also said it was reviewing findings of a report from the Federal Financial Institutions Examination Council’s Appraisal Subcommittee analyzing appraisal standards and appraiser criteria. The report “raises serious concerns regarding existing appraisal standards and provides recommendations with respect to fairness, equity, objectivity, and diversity in appraisals and the training and credentialing of appraisers,” the agency said.
The bureau pivoted to an increased focus on issues of discrimination under previous acting director Dave Uejio, who took over leadership at the CFPB in January 2020 when when Kathy Kraninger resigned at the request of President Biden. Current Director Rohit Chopra has continued the trend.