Sept. 12, 2012 – NAFCU is seeking feedback from member credit unions until Oct. 1 on a proposed rule that would require mortgage lenders to give home loan applicants free copies of written appraisals and other home value estimates.
The proposed rule, which comes from the Consumer Financial Protection Bureau, would implement several changes to the appraisal process by amending Regulation B, which implements the Equal Credit Opportunity Act. Notably, the proposal would eliminate credit unions’ current exemption from ECOA rules. The exemption was put in place because credit unions already have similar requirements under NCUA regulations.
Under the proposal, creditors must notify applicants in writing, within three business days of application, of the right to receive a copy of the appraisal or valuation. While creditors would still be permitted to charge reasonable fees associated with conducting appraisals and home value estimates, the proposed rule prohibits charging consumer fees for obtaining the reports. This is a change from current practices where consumers must request an appraisal report from the creditor and may be charged a fee to obtain the report.
NAFCU is asking members to provide their input by Oct. 1. Comments are due to the CFPB by Oct. 15. The CFPB plans to finalize this rule in January 2013.
The proposed rule is explained in further detail in NAFCU’s Regulatory Alert (members only).