Legislation that aims for more flexibility in fees charged for appraisals, establishes federal consumer financial protection agency oversight in development of credit scoring models, and that mandates the title of “chair” (rather than chairman) for the leader of the Federal Reserve Board are among those scheduled to be marked up Thursday by the House Financial Services Committee.
In a committee memo released Monday, the committee said it would be marking up:
- An amendment in nature of a substitute to H.R. 3619, the Appraisal Fee Transparency Act, which would give the Federal Financial Institution Examination Council’s (FFIEC) Appraisal Subcommittee “greater flexibility to determine the structure and amount of the fee charged to appraisal management companies (AMCs), provide the ASC with greater flexibility to utilize fee proceeds to partner with different entities to ensure compliance with federal appraisal standards.” The legislation would also add a representative of the Department of Veterans Affairs (VA) to the ASC (to join representatives of federal financial institution regulators already on the committee), create a national registry of appraisers in training, and provide consumers with greater transparency in the disclosure of fees paid for appraisals.
- The “Clarity in Credit Score Formation Act of 2019” (which has not yet been assigned a bill number) directs the Consumer Financial Protection Bureau (CFPB) to set standards for validating the accuracy and predictive value of credit scoring models, both before their initial use by creditors and at regular intervals thereafter, for as long as those models are available for purchase. The bill also gives CFPB “explicit authority” to prohibit credit scoring developers from “weighing, considering, or including certain factors or making available for purchase or using certain outdated credit scoring models or versions that may create misleading and false determinations of consumers’ creditworthiness.” The bureau would also be required to study the impact of having more non-traditional data on consumer reports and the use of alternative data in credit scoring models on consumers’ access to (and the affordability of) credit products and services and other matters, including a review of the impact on consumers with limited or no traditional credit histories, racial and ethnic minorities, women, and consumers residing in Federally-assisted rental housing.
- H.R. 281, the “Ensuring Diverse Leadership Act of 2019,” which would require the Federal Reserve Banks to interview at least one individual reflective of “gender diversity and “at least one (individual) reflective of racial or ethnic diversity when appointing Federal Reserve Bank presidents.” The Fed would also be required to annually report on “applicant pool demographics” for the positions. The bill also revises the title of “Chairman of the Board of Governors of the Federal Reserve System” to be the gender-neutral title of “Chair.” (A companion bill in the Senate, S.65, makes the same change.)
Memo to House Financial Services Committee Members: July 11, 2019 Full Committee Markup