Appraisal regulation proposal, admin law judges on agenda for CU regulator board

A proposed rule on real estate appraisals, and a board briefing on agency appointment of administrative law judges, will be considered by the federal credit union regulator’s board during its open monthly meeting Sept. 20 in Alexandria, Va.

Relief from independent appraisals for certain home loans is provided under the Economic Growth, Regulatory Relief and Consumer Protection Act (EGGRCPA). Additionally, the unified agenda of federal regulations (maintained by the Office of Management and Budget [OMB]) shows that the National Credit Union Administration (NCUA) is also preparing a proposed rule that would amend its regulations requiring appraisals of real estate for certain transactions. The unified agenda notes that the proposal would increase the threshold level at or below which appraisals would not be required for commercial real estate transactions. The proposed change noted in the unified agenda, it says reflects comments received through the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) regulatory review process.

In April, the federal banking regulatory issued a final rule increasing the appraisal threshold from $250,000 to $500,000 for commercial real estate (CRE) transactions – the first increase in nearly a quarter century.

In a release in April, the Federal Reserve said that it, acting with the Federal Deposit Insurance Corp. (FDIC) and the Office of the Comptroller of the Currency (OCC), had originally proposed to raise the 24-year-old threshold to $400,000. However, the agencies determined that the $500,000 level would “materially reduce regulatory burden and the number of transactions that require an appraisal,” the release stated.

The agencies also determined that raising the threshold to the higher level would not pose a safety and soundness threat to institutions, according to the release.

The agency’s agenda gave no additional information about the board briefing on administrative law judges. However, in July, President Donald Trump issued an executive order stating that federal administrative law judges will be hired directly by individual agencies, rather than from a central pool of candidates.

The order was reportedly issued in response to a recent U.S. Supreme Court decision upholding a challenge to the authority of an administrative law judge based on how government hires for those positions.

In other action, the board will consider the member business loan rule for the state of Texas (and its alignment with NCUA regulations), and hear a report on the National Credit Union Share Insurance Fund (NCUSIF).

NCUA Board meeting agenda, Sept. 20