Real Estate Valuation Fairness and Improvement Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 2553 To establish an interagency Task Force to analyze Federal collateral underwriting standards and guidance, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 15, 2021 Mr. CLEAVER (for himself and Mr. TORRES of New York) introduced the following bill; which was referred to the Committee on Financial Services A BILL To establish an interagency Task Force to analyze Federal collateral underwriting standards and guidance, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Real Estate Valuation 4 Fairness and Improvement Act of 2021’’. 5 SEC. 2. FINDINGS. 6 The Congress finds the following: 7 (1) Two Federal agencies, the Federal Home 8 Owners’ Loan Corporation and the Federal Housing 9 Administration played a major role in the develop- 10 VerDate Sep 11 2014 01:01 Apr 16, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2553.IH H2553 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 2553 IH ment of the modern home mortgage origination in- 1 dustry. 2 (2) Both Federal agencies explicitly considered 3 the racial and ethnic make up of neighborhoods 4 when underwriting loans and valuing the real estate 5 to be used as home loan collateral. 6 (3) Both agencies devalued property or refused 7 to make loans secured by property in communities of 8 color. 9 (4) The harmful consequences of this discrimi- 10 nation remain unresolved. 11 SEC. 3. REAL ESTATE VALUATION TASK FORCE. 12 (a) ESTABLISHMENT.—The Appraisal Subcommittee 13 of the Financial Institutions Examination Council shall fa- 14 cilitate the establishment and convening of an Interagency 15 Task Force on Real Estate Valuation (in this section re- 16 ferred to as the ‘‘Task Force’’). 17 (b) MEMBERS.—The Task Force shall consist of the 18 following members or their designees: 19 (1) The Director of the Federal Housing Fi- 20 nance Agency. 21 (2) The Chair of the Board of Directors of the 22 Federal National Mortgage Association. 23 (3) The Chair of the Board of Directors of the 24 Federal Home Loan Mortgage Corporation. 25 VerDate Sep 11 2014 01:01 Apr 16, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2553.IH H2553 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 2553 IH (4) The President of the Government National 1 Mortgage Association. 2 (5) The Chairperson of the Board of Directors 3 of one of the Federal home loan banks, selected by 4 the Chairpersons of the Boards of Directors of all of 5 the Federal home loan banks. 6 (6) The Assistant Secretary of the Department 7 of Housing and Urban Development who is the Fed- 8 eral Housing Commissioner. 9 (7) The Undersecretary for Rural Development 10 of the Department of Agriculture. 11 (8) The Secretary of Veterans Affairs. 12 (9) The Director of the Bureau of Consumer 13 Financial Protection, who shall serve as the Chair- 14 person of the Task Force. 15 (10) The Comptroller of the Currency. 16 (11) The Chairperson of the Board of Directors 17 of the Federal Deposit Insurance Corporation. 18 (12) The Chairman of the Board of Governors 19 of the Federal Reserve System. 20 (13) The Chairman of the National Credit 21 Union Administration Board. 22 (14) The Chairman of the State Liaison Com- 23 mittee. 24 (c) DUTIES.—The Task Force shall— 25 VerDate Sep 11 2014 01:01 Apr 16, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2553.IH H2553 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 2553 IH (1) harmonize to the greatest extent possible 1 the various collateral underwriting standards and 2 guidance of the agencies and entities represented on 3 the Task Force governing residential and commer- 4 cial real estate valuations, including standards and 5 guidance with respect to appraisals, non-traditional 6 and alternative methods of providing real estate 7 property evaluations such as automated valuation 8 models, processes and procedures for managing re- 9 considerations of value by consumers, and standards 10 and guidance with respect to common collateral un- 11 derwriting challenges, such as energy efficient hous- 12 ing and limited or inactive markets; 13 (2) to the extent that standards or guidance de- 14 scribed under paragraph (1) are not harmonized, the 15 Task Force shall issue a report to Congress explain- 16 ing why harmonization cannot or should not be im- 17 plemented; 18 (3) establish specific definitions for limited or 19 inactive housing markets in which comparable sales 20 are limited or unavailable over a certain period of 21 time, and establish greater flexibilities and guidance 22 for appraisals and any underwriting processes asso- 23 ciated with appraisals conducted in such markets, 24 such as the ability to consider market evidence for 25 VerDate Sep 11 2014 01:01 Apr 16, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2553.IH H2553 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 2553 IH similar properties in other geographic areas or uti- 1 lizing a range of value; 2 (4) aggregate data across Task Force members 3 and conduct a study to determine whether there are 4 racial disparities at both the borrower and commu- 5 nity level in the valuation and price of the residential 6 real estate to be used as collateral for mortgage ap- 7 plications processed by Task Force members; 8 (5) identify specific causes of such racial dis- 9 parities and— 10 (A) adopt changes to address such causes; 11 or 12 (B) if the Task Force determines that ad- 13 ditional statutory authority is needed to adopt 14 such changes, issue a report to Congress de- 15 scribing the needed statutory authority; and 16 (6) evaluate whether there are any barriers to 17 entry that are disproportionately preventing minori- 18 ties from entering into the appraisal profession, such 19 as current minimum requirements established by the 20 Appraiser Qualifications Board, the cost and avail- 21 ability of education, the content of the State ap- 22 praiser exam questions, or the time it takes to finish 23 training. 24 VerDate Sep 11 2014 01:01 Apr 16, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2553.IH H2553 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 2553 IH (d) MEETINGS.—The Task Force shall convene regu- 1 larly, including with the advisory committee described 2 under subsection (g), to carry out the duties under sub- 3 section (c) and submit the reports required under sub- 4 section (f). 5 (e) SHARING OF INFORMATION.—Each agency and 6 entity represented on the Task Force shall share with the 7 Task Force any data of the agency or entity necessary 8 for the Task Force to carry out the duties of the Task 9 Force under this Act. 10 (f) REPORTS.— 11 (1) INITIAL.—The Chairperson of the Task 12 Force shall submit a report to the Congress not 13 later than the expiration of the 24-month period be- 14 ginning on the date of the enactment of this Act de- 15 tailing the findings and any actions taken to further 16 the duties of the Task Force as of such time and de- 17 scribing any planned efforts and activities. 18 (2) ONGOING.—Periodically after the submis- 19 sion of the report pursuant to paragraph (1), the 20 Chairperson shall submit reports to the Congress 21 setting forth updates of the findings and actions 22 taken to further the duties of the Task Force. 23 (g) ADVISORY COMMITTEE.—The Task Force shall 24 establish an advisory committee to provide advice with re- 25 VerDate Sep 11 2014 01:01 Apr 16, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2553.IH H2553 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 2553 IH spect to the duties of the Task Force. The advisory com- 1 mittee shall consist of— 2 (1) at least 2 civil rights advocates; 3 (2) at least 2 consumer advocates; 4 (3) at least 2 real estate appraisers (or rep- 5 resentatives of real estate appraiser trade groups); 6 (4) at least 1 small lender (or representative of 7 a trade group for small lenders); 8 (5) at least 1 representative of a trade group 9 that represents private investors; 10 (6) at least 2 representatives of appraisal man- 11 agement companies or trade groups for such compa- 12 nies; 13 (7) at least 2 individuals who are industry ex- 14 perts on alternative valuation models; and 15 (8) at least 1 representative of the organization 16 that adopts the appraisal standards and appraiser 17 qualification criteria under title XI of the Financial 18 Institutions Reform, Recovery, and Enforcement Act 19 of 1989 (12 U.S.C. 3331 et seq.). 20 (h) SUNSET.—The Task Force shall terminate upon 21 the expiration of the 5-year period beginning on the date 22 of the enactment of this Act. 23 VerDate Sep 11 2014 01:01 Apr 16, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2553.IH H2553 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 2553 IH SEC. 4. PROMOTING DIVERSITY AND INCLUSION IN THE AP- 1 PRAISAL PROFESSION. 2 The Financial Institutions Reform, Recovery, and 3 Enforcement Act of 1989 is amended— 4 (1) in section 1103(a) (12 U.S.C. 3332(a))— 5 (A) in paragraph (3), by striking ‘‘and’’ at 6 the end; 7 (B) in paragraph (4), by striking the pe- 8 riod at the end and inserting a semicolon; 9 (C) in paragraph (5), by striking the pe- 10 riod at the end and inserting a semicolon; 11 (D) in paragraph (6), by striking the pe- 12 riod at the end and inserting ‘‘a semicolon; 13 and’’; and 14 (E) by adding at the end the following new 15 paragraph: 16 ‘‘(7) administer the grant program under sec- 17 tion 1122(j).’’; 18 (2) in section 1106 (12 U.S.C. 3335)— 19 (A) by inserting ‘‘(a) IN GENERAL.—’’ be- 20 fore ‘‘The Appraisal Subcommittee’’; 21 (B) by striking the comma after ‘‘com- 22 ment’’; 23 (C) by inserting before ‘‘Any regulations’’ 24 the following: 25 ‘‘(b) REGULATIONS.—’’; and 26 VerDate Sep 11 2014 01:01 Apr 16, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2553.IH H2553 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 2553 IH (D) in subsection (a) (as so designated by 1 subparagraph (A) of this paragraph), by adding 2 at the end the following: ‘‘The Appraisal Sub- 3 committee may coordinate, and enter into 4 agreements, with private industry stakeholders 5 (including appraisal management companies 6 and industry associations) to facilitate activities 7 and practices that ensure diversity among indi- 8 viduals newly hired as appraisers in their first 9 employment positions in the appraisal indus- 10 try.’’; and 11 (3) in section 1122 (12 U.S.C. 3351), by add- 12 ing at the end the following new subsection: 13 ‘‘(j) GRANT PROGRAM TO PROMOTE DIVERSITY AND 14 INCLUSION IN THE APPRAISAL PROFESSION.— 15 ‘‘(1) IN GENERAL.—The Appraisal Sub- 16 committee shall carry out a program under this sub- 17 section to makes grants to State agencies, nonprofit 18 organizations, and institutions of higher education to 19 promote diversity and inclusion in the appraisal pro- 20 fession. 21 ‘‘(2) ELIGIBLE ACTIVITIES.—Activities carried 22 out with amounts from a grant under this Act shall 23 be designed to promote diversity and inclusion in the 24 appraisal profession, and may include— 25 VerDate Sep 11 2014 01:01 Apr 16, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2553.IH H2553 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 2553 IH ‘‘(A) funding scholarships; 1 ‘‘(B) providing training and education; 2 ‘‘(C) providing implicit bias training for 3 appraisers; and 4 ‘‘(D) other activities as determined appro- 5 priate to further the purposes of this grant pro- 6 gram by the Appraisal Subcommittee. 7 ‘‘(3) ALLOCATION OF FUNDS.—In making 8 grants under this subsection, the Appraisal Sub- 9 committee shall— 10 ‘‘(A) allocate 50 percent of the funds made 11 available to Historically Black Colleges and 12 Universities or universities with degree pro- 13 grams approved by the Appraiser Qualifications 14 Board or a relevant State regulatory agency 15 for— 16 ‘‘(i) scholarships for students of color 17 who want to pursue a career in real estate 18 appraisal; and 19 ‘‘(ii) subsidizing living expenses for 20 those students while in training; and 21 ‘‘(B) allocate 20 percent of the funds to 22 cover the cost of fulfilling the experience re- 23 quirements or other applicable requirements 24 that the students described under subparagraph 25 VerDate Sep 11 2014 01:01 Apr 16, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2553.IH H2553 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 2553 IH (A) will need to complete in order to become 1 appraisers. 2 ‘‘(4) ADMINISTRATIVE COSTS.—The Appraisal 3 Subcommittee may use 1 percent of amounts appro- 4 priated pursuant to paragraph (6) to cover the ad- 5 ministrative costs of carrying out this subsection. 6 ‘‘(5) REPORTS.—For each fiscal year during 7 which grants are made under the program under 8 this subsection, the Appraisal Subcommittee shall 9 submit a report to the Congress regarding imple- 10 mentation of the program and describing the grants 11 made, activities conducted using grant amounts, and 12 the number of individuals served by such grants, 13 disaggregated by race, ethnicity, age, and gender. 14 ‘‘(6) AUTHORIZATION OF APPROPRIATIONS.— 15 There is authorized to be appropriated to the Ap- 16 praisal Subcommittee for grants under this sub- 17 section $50,000,000 for each of fiscal years 2022 18 through 2026.’’. 19 Æ VerDate Sep 11 2014 01:01 Apr 16, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\H2553.IH H2553 pbinns on DSKJLVW7X2PROD with BILLS