Chopra pens comment letter on appraisal issues, including bias, related to not-for-profit player’s oversight

Federal Issues Appraisal Nonprofit CFPB

On March 18, the Director of the CFPB, Rohit Chopra, in his capacity as a voting member of the FFIEC, released a comment letter regarding the recent Appraisal Subcommittee hearings. He opened on how the appraisal process was governed not by a governmental agency, but instead by a not-for-profit corporation leading to “key issues” related to appraisal bias. Despite its private status, this organization was governed by the Appraisal Subcommittee which monitors and reviews the organizational structure of the not-for-profit appraisal corporation. Chopra outlined several issues gleaned from the four hearings: First, Chopra noted “severe deficiencies” with the not-for-profit’s conflict of interest policies, noting that the Executive Branch’s conflict of interest policies for employees spanned 77 pages, while the not-for-profit’s policy was less than 10. Second, the not-for-profit has an “insular and contorted governance structure” that favors private over public interests. And third, the Appraisal Foundation’s governance processes, such as electing its President, lack transparency. Chopra highlighted these three examples and described the overall lack of accountability as “deeply troubling” because the not-for-profit was one of the most powerful players when it comes to appraisals.