Oct. 16, 2012 – A Consumer Financial Protection Bureau proposal to revise the real estate appraisal process would be too costly for credit unions and confuse consumers, and it should be withdrawn, NAFCU wrote Monday.
In an official comment letter, NAFCU Regulatory Affairs Counsel Tessema Tefferi said the proposed rule, which would require mortgage lenders to give home loan applicants free copies of written appraisals and other home value estimates, comes at a time when the bureau is in the midst of “a litany of other rulemakings that will undoubtedly lead to wholesale changes” in the mortgage lending arena.
In light of this, Tefferi said the CFPB should “withdraw the proposal or withhold issuing a final rule until the Dodd-Frank-Act-required rules are fully implemented and credit unions are provided adequate time to take the necessary actions for compliance.”
Should the CFPB proceed with implementing the proposal, Tefferi said the agency should:
- Retain credit unions’ exemption from particular Regulation B appraisal rules. On this point, Tefferi said the exemption was put in place because credit unions already have similar requirements under NCUA regulations.
- Limit the scope of the proposed changes to appraisals. Tefferi noted that providing copies of home valuations, which are technical in nature, would confuse consumers and raise costs to credit unions. He also cautioned that the valuation methods for loans sold to Fannie Mae and Freddie Mac are proprietary and should not be disclosed.
- Provide greater clarity and a sample appraisal disclosure statement for credit unions.
See the full comment letter for more.