[Congressional Record Volume 165, Number 151 (Thursday, September 19, 2019)]
[House]
[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.

                          ____________________