League Submits Comment Letter to NCUA on Proposed Appraisal Reg

League President Paul Gentile submitted a comment letter to NCUA on behalf of member credit unions regarding two regulations that NCUA proposed at its June board meeting.  The comments were made on Proposed Rulemaking on Appraisals - Availability to Applicants and Requirements for Transactions Involving an Existing Extension of Credit.  In the letter, Gentile noted that "Members of the Leagues continue to comment that the regulatory burden continues to increase and that additional relief is needed.  As a result, the changes set forth in the proposed rule are overwhelmingly supported."
The League agreed with the proposed rule which would exempt credit unions from having to automatically provide a copy of the appraisal of the borrower's property if the loan is secured by a subordinate lien.  Federal credit unions would still be subject to the Consumer Financial Protection Bureau's requirement under Regulation B that creditors must provide applicants with free copies of appraisals whether they are requested or not.
Support was also voiced for the provision in the rulemaking which would exempt credit unions from the requirement that an appraisal be done if the loan involves the extension of no additional credit, beyond that needed to cover closing costs, and if there was no material change in the marketplace.
An amendment that would permit the use of automated valuation models (AVMs) would meet the requirement for a written estimate of market value called for in the regulation.  Gentile stated in the letter, "This change would be consistent with the 2010 Federal Financial Institutions Examination Council's interagency appraisal and evaluation guidelines and would promote further parity and consistency amongst federal regulators in lending operations."
Click here to view the proposed regulation.
Click here to read the comment letter on the MA League website.
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