115th Congress Could Mean Regulation and Policy Changes for AMCs
With the Republican control of the House, Senate and White House, many observers expect significant federal legislative and regulatory changes. This could affect the entire real estate industry, including Appraisal Management Companies.
While elements of the Dodd-Frank Act, a federal law resulting in tighter regulation of the financial industry, could be targeted by Republicans in the 115th Congress, it is expected to face a strong defense by Democrats.
Going forward, the Republicans may work to fully privatize Fannie Mae and Freddie Mac, but that would likewise face strong opposition by parts of the real estate and mortgage finance sectors.
If privatized, Fannie Mae and Freddie Mac would likely still benefit from strong appraisal policies (policies potentially not set in a statute) because risks would be transferred from taxpayers to investors.
To focus on issues that affect appraisers and appraisal management companies throughout the United States, the Appraisal Institute testified before a subcommittee of the House Financial Services Committee.
AI suggested Congress realign the appraisal regulatory structure with those of other industries in the real estate and mortgage sectors.
“Appraisers are being choked by rules and regulations in nearly every facet of their business. Real estate appraisers face a ‘layering effect’ of rules and regulations that create a disincentive for potential entry into the profession, while also diminishing the profession’s profitability,” the Appraisal Institute noted in written testimony to the Housing and Insurance Subcommittee.
As examples of these rules, AI cited background checks with no federal mandate or efficient processing system, and unappealing supervisor-appraiser and trainee-appraiser requirements, among others. AI representatives also discussed making the appraisal regulatory structure and process more efficient and responsive to the needs of practitioners and consumers.
You can follow Congress updates that affect AMCs by visiting the AI Appraisal Modernization site, http://www.appraisalinstitute.org/advocacy/appraisal-regulatory-system-modernization/.