§3354 — Title 12 Banks and Banking | U.S. Code

Summary

Require automated valuation models to follow quality-control rules that make their home-value estimates reliable. The rules must make the estimates trustworthy, guard against data tampering, try to avoid conflicts of interest, include random sample testing and reviews, and cover any other factors the named agencies find appropriate. The Board, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration Board, the Federal Housing Finance Agency, and the Bureau of Consumer Financial Protection must write those rules. For banks and their regulated subsidiaries, the bank’s main federal regulator enforces the rules. For other participants in the market for appraisals of 1-to-4 unit single family residential real estate, enforcement is by the Federal Trade Commission, the Bureau of Consumer Financial Protection, and state attorneys general. Automated valuation model: a computer tool lenders use to estimate a home’s value for a mortgage on the borrower’s main home.

Title 12, §3354

Banks and Banking — Source: USLM XML via OLRC

(a)Automated valuation models shall adhere to quality control standards designed to—

(1)ensure a high level of confidence in the estimates produced by automated valuation models;

(2)protect against the manipulation of data;

(3)seek to avoid conflicts of interest;

(4)require random sample testing and reviews; and

(5)account for any other such factor that the agencies listed in subsection (b) determine to be appropriate.

(b)The Board, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration Board, the Federal Housing Finance Agency, and the Bureau of Consumer Financial Protection, in consultation with the staff of the Appraisal Subcommittee and the Appraisal Standards Board of the Appraisal Foundation, shall promulgate regulations to implement the quality control standards required under this section.

(c)Compliance with regulations issued under this subsection shall be enforced by—

(1)with respect to a financial institution, or subsidiary owned and controlled by a financial institution and regulated by a Federal financial institution regulatory agency, the Federal financial institution regulatory agency that acts as the primary Federal supervisor of such financial institution or subsidiary; and

(2)with respect to other participants in the market for appraisals of 1-to-4 unit single family residential real estate, the Federal Trade Commission, the Bureau of Consumer Financial Protection, and a State attorney general.

(d)For purposes of this section, the term “automated valuation model” means any computerized model used by mortgage originators and secondary market issuers to determine the collateral worth of a mortgage secured by a consumer’s principal dwelling.

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Section effective on the date on which final

Regulations

implementing such section take effect, or on the date that is 18 months after the designated transfer date if such

Regulations

have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as an

Effective Date

of 2010 Amendment note under section 1601 of Title 15, Commerce and Trade.

§3354 Automated valuation models used to estimate collateral value for mortgage lending purposes

Summary

Title 12, §3354

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Regulations

Regulations

Effective Date

Citations & Metadata