September 19, 2019 - Issue: Vol. 165, No. 151 — Daily Edition116th Congress (2019 - 2020) - 1st Session
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APPRAISAL FEE TRANSPARENCY ACT OF 2019; Congressional Record Vol. 165, No. 151
(House of Representatives - September 19, 2019)
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[Pages H7803-H7805] From the Congressional Record Online through the Government Publishing Office [www.gpo.gov] APPRAISAL FEE TRANSPARENCY ACT OF 2019 Ms. WATERS. Madam Speaker, I move to suspend the rules and pass the bill (H.R. 3619) to amend the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to provide the Appraisal Subcommittee with the authority to modify annual registry fees for appraisal management companies, to maintain a registry of trainees and charge a lower trainee registry fee, and to allow grants to States to assist appraiser and potential appraiser compliance with the Real Property Appraiser [[Page H7804]] Qualification Criteria, and for other purposes, as amended. The Clerk read the title of the bill. The text of the bill is as follows: H.R. 3619 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the ``Appraisal Fee Transparency Act of 2019''. SEC. 2. ANNUAL REGISTRY FEES FOR APPRAISAL MANAGEMENT COMPANIES. Subparagraph (B) of section 1109(a)(4) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3338(a)(4)(B)) is amended-- (1) in clause (ii), by striking the period at the end and inserting a semicolon; and (2) by inserting after and below clause (ii) the following: ``except that if the Appraisal Subcommittee determines that the fees established under clause (i) or (ii) result in adverse consequences or are otherwise not appropriately tailored to meet the goals of this paragraph, the Appraisal Subcommittee may establish a new formula for fees, which new formula may not take effect until the Appraisal Subcommittee submits a report to the Congress justifying its decision to establish such a new formula, setting forth the new formula, and explaining how the new formula will affect such fees.''. SEC. 3. TRAINEE APPRAISERS. (a) Maintenance on National Registry.-- Paragraph (3) of section 1103(a) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3332(a)(3)) is amended by striking ``and licensed'' and inserting ``, licensed, and trainee''. (b) Annual Registry Fees.--Subparagraph (A) of section 1109(a)(4) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3338(a)(4)(A)) is amended-- (1) by inserting ``including trainee appraisers,'' after ``transactions,''; (2) by inserting ``except that the Appraisal Subcommittee may, in its discretion, charge a fee for trainee appraisers not exceeding $20'' after ``$40,''; and (3) by inserting before the semicolon the following: ``; except that nothing in this subparagraph may be construed to require a State to establish or operate an program for trainee appraisers''. (c) Definition.--Section 1121 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350) is amended by adding at the end the following new paragraph: ``(12) Trainee appraiser.--The term `trainee appraiser' means an individual who meets the minimum criteria established by the Appraiser Qualification Board for a trainee appraiser license and is credentialed by a State appraiser certifying and licensing agency.''. SEC. 4. GRANTS TO NONPROFITS AND INSTITUTIONS OF HIGHER EDUCATION FOR COMPLIANCE EFFORTS. Paragraph (5) of section 1109(b) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3338(b)(5)) is amended by inserting ``nonprofit organizations, and institutions of higher education'' after ``licensing agencies,''. SEC. 5. REQUIREMENT TO DISCLOSE APPRAISAL FEES. Section 4(c) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2603(c)) is amended by striking ``may'' and inserting ``shall''. SEC. 6. INCLUSION OF DESIGNEE OF SECRETARY OF VETERANS AFFAIRS ON APPRAISAL SUBCOMMITTEE. The first sentence of section 1011 of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3310) is amended by inserting ``the Department of Veterans Affairs,'' after ``Protection,''. SEC. 7. DETERMINATION OF BUDGETARY EFFECTS. The budgetary effects of this Act, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled ``Budgetary Effects of PAYGO Legislation'' for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage. The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from California (Ms. Waters) and the gentleman from North Carolina (Mr. McHenry) each will control 20 minutes. The Chair recognizes the gentlewoman from California. General Leave Ms. WATERS. Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this legislation and to insert extraneous material thereon. The SPEAKER pro tempore. Is there objection to the request of the gentlewoman from California? There was no objection. Ms. WATERS. Madam Speaker, I yield myself such time as I may consume. Madam Speaker, I rise in support of H.R. 3619, the Appraisal Fee Transparency Act, and I want to thank the gentleman from Missouri (Mr. Clay) for bringing this bill to the House. This bill would provide the Appraisal Subcommittee with greater flexibility to adjust the structure and amount of the fees they charge to appraisal management companies to alleviate concerns that the current statutory requirements governing these fees are too rigid and would have put pressure on appraisal management companies to pass on the burden of unnecessarily high fees to appraisers and reduce the number of appraisers that they work with. At a time when some areas of the country are experiencing an appraiser shortage, we cannot afford to make it harder for appraisers to obtain work. This bill would also create a national registry of appraiser trainees, much like there is already a national registry of licensed appraisers. This is one small step that will help facilitate the entry of new appraisers into the industry. Finally, this bill would provide consumers with a separate disclosure of fees paid to the appraiser and fees paid to the appraisal management company in order to enhance their understanding of the costs associated with their mortgage. These are reforms that are broadly supported by the appraisal industry and will make meaningful changes to this industry which makes up a critical part of the home buying process. Madam Speaker, I thank the gentleman from Missouri (Mr. Clay) for offering this bill, and I urge my colleagues to support it. Madam Speaker, I reserve the balance of my time. Mr. McHENRY. Madam Speaker, I yield myself such time as I may consume. Madam Speaker, I rise in support of H.R. 3619, the Appraisal Fee Transparency Act of 2019. In June, the Financial Services Committee held a hearing on a variety of issues relating to the appraisal process. The issue of appraisal industry reform might not be an exciting headline, but honest, educated, and, importantly, independent appraisals help ensure the safety and soundness of mortgage lending. We know how the last financial crisis happened, and it started with mortgages, so it is really important that appraisals are accurate and true. As neutral parties, appraisers help determine the fair market value of assets for both lenders and purchasers. {time} 1630 Yet, much of the current appraisal framework remains an antiquated, confusing maze of overlapping and conflicting State and Federal rules. These inefficiencies harm appraisal quality, lower competition, and inhibit market innovation. Building a 21st century housing finance system requires us to do better. The bill we are considering today is a good first step in that reform process. It makes the necessary improvements to the fee structure and to the appraiser registry. These reforms will help increase transparency and clarity for consumers in an already complex regulatory scheme. The bill also allows the Federal Appraisal Subcommittee to set up a less arbitrary fee schedule for appraisal management companies. These management companies are intermediaries lenders sometimes use to provide certain appraisal-related services. This new schedule will help increase competition and employment within the industry. Its proceeds will be used to improve appraiser complaint investigations and enforcement activities. The bill would also, for the first time, allow trainees to be listed on the subcommittee's national registry for appraisers. This will help meet appraisal needs, as well as help those trainees receive the valuable on-the-job experience they need to gain further accreditation. That is just the nature of the apprenticeship process that the appraisal industry has in order to get licensure in most States. The bill also provides for greater transparency under the Real Estate Settlement Procedures Act, or what we commonly call RESPA. If you have ever had a mortgage, you understand what RESPA is. You may not understand RESPA, but you know what it is, is probably the more accurate way to say it. This is an important transparency measure for the disclosure of [[Page H7805]] the fees to the management companies when one is used in a transaction. Finally, the bill adds a representative from the Veterans Administration to the current seven member Federal Appraisal Subcommittee, along with HUD, the Fed, the OCC, FHFA, FDIC, NCUA, and the CFPB. If you are listening at home, don't worry about the details of it. It is basically every Federal regulator in Washington has a seat at the board. We are now putting the VA on there because the VA Administration does mortgages as well for veterans. So let's get them all at the table and let's have them all communicate. That covers the national mortgage market that we currently have. This is good legislating. That is basically what I am saying. I think it is a welcome thing to add veterans to the mix on the subcommittee. They currently make up roughly 10 percent of mortgages annually, so it is really important they have a seat at the board and a seat at the table, especially, around this important issue. Their input will help the subcommittee promote greater uniformity in its supervisory role. Taken together, these reforms will help sort out some of the antiquated, confusing, and overlapping appraisal rules. This bill was reported out of the Financial Services Committee unanimously. I commend its sponsor and cosponsor. Chairman Clay of the Housing, Community Development and Insurance Subcommittee has done great work. He will work with Republicans where he can, but he tries to beat us on most days. But on this one, he worked with Ranking Member Duffy in order to have this bipartisan bill before us today. Representative Clay is a tough Democrat, who represents his State well, and is a tough negotiator. What we have before us is a really good bill because of the quality of legislating--not easy legislating, but tough legislating--that Representative Clay is about on the Financial Services Committee and here in Congress. Madam Speaker, I urge adoption of this meaningful reform, and I reserve the balance of my time. Ms. WATERS. Madam Speaker, I yield 3 minutes to the gentleman from Missouri (Mr. Clay), the chair of the Subcommittee on Housing, Community Development and Insurance. Mr. CLAY. Madam Speaker, I rise in support of H.R. 3619, the Appraisal Fee Transparency Act of 2019. I thank Chairwoman Waters for yielding the time, as well as the support that she has given. Let me also thank Ranking Member McHenry for his support of this legislation, as well as the ranking member of the subcommittee, Mr. Duffy, who I hope will be replaced with someone just as competent as Mr. Duffy has been. This bill would provide the Appraisal Subcommittee with greater flexibility to determine the structure and amount of the fee charged to appraisal management companies, provide the Appraisal Subcommittee with greater flexibility to utilize fee proceeds to partner with different entities to ensure compliance with Federal appraisal standards, add a representative of the Department of Veterans Affairs to the Appraisal Subcommittee, create a national registry of appraisers in training, and provide consumers with greater transparency in the disclosure of fees paid by appraisals. Madam Speaker, as you are well aware, a significant part of the housing market is comprised of veterans, as was mentioned, but currently the Appraisal Subcommittee does not have representation from the Department of Veterans Affairs. This bill would add a designee from the VA, which further acknowledges the unique critical role of our veterans. Though this bill does not address this directly, one of the takeaways from the hearing that we held back in June was the lack of diversity in the appraisal industry, which currently does not have many women or minorities. That is one of the reasons this bill adds a national registry of appraiser trainees, which would help bring new people into this unique and very important industry. Lastly, the bill makes it Federal law to disclose to consumers the fee that they pay for their appraisals. This consumer-friendly addition to the bill promotes transparency and ensures that the opaque world of appraisals is becoming more understandable to the average home buyer. I will add that one of the most compelling parts of the appraisal hearing was the testimony of scholar Andre Perry of the Brookings Institution where he discussed in-depth the research of his colleagues which demonstrated that the appraisal industry has contributed to the growing racial wealth gap. Madam Speaker, I look forward to the support of the House of this important legislation. Mr. McHENRY. Madam Speaker, I yield back the balance of my time. Ms. WATERS. Madam Speaker, I yield myself the balance of my time. Madam Speaker, I, again, thank the gentleman from Missouri (Mr. Clay) for bringing this bill to the floor. This bill will remove another impediment to obtaining homes for everyday Americans by making more appraisers available to home buyers. Madam Speaker, I urge my colleagues to join me in supporting this important piece of legislation, and I yield back the balance of my time. The SPEAKER pro tempore. The question is on the motion offered by the gentlewoman from California (Ms. Waters) that the House suspend the rules and pass the bill, H.R. 3619, as amended. The question was taken; and (two-thirds being in the affirmative) the rules were suspended and the bill, as amended, was passed. A motion to reconsider was laid on the table. ____________________
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