Regulatory Alerts2024-07-22 | FIL-43-2024Final Rule on Real Estate Valuations: Quality Control Standards for Automated Valuation Models
The FDIC, Federal Reserve, OCC, NCUA, FHFA, and CFPB jointly issued a Final Rule implementing Dodd-Frank Act quality control standards for automated valuation models used by mortgage originators and secondary market issuers to appraise consumer principal dwellings. The rule mandates that regulated institutions adopt policies, procedures, and control systems ensuring these models meet five core standards: high estimation confidence, data manipulation protection, conflict of interest mitigation, random sample testing, and strict nondiscrimination compliance. By explicitly incorporating a nondiscrimination factor, the regulation addresses potential safety and soundness risks while establishing an effective date one calendar quarter after Federal Register publication.