NEWS: As indicated on the InfoSight360 Compliance Calendar, the interagency quality control standards for automated valuation models (AVMs) take effect today, October 1st. The rule will add a new Subpart B to the National Credit Union Administration’s appraisal rules found at 12 CFR Part 722.
The rule applies to credit unions that use AVMs to determine the value of a principal dwelling in connection with extending new credit, modifying a current loan, or increasing an existing line of credit. It does not apply if the credit union uses AVMs only to:
- Monitor the quality or performance of its existing portfolio, or
- Review the quality of an already completed collateral valuation.
Under new Subpart B to Part 722, credit unions covered by the rule must adopt and maintain policies, practices, procedures, and control systems to ensure that AVMs used adhere to quality control standards designed to:
- Ensure a high level of confidence in the estimates produced,
- Protect against the manipulation of data,
- Seek to avoid conflicts of interest,
- Require random sample testing and reviews, and
- Comply with applicable non-discrimination laws.
The specific information can be found in the following tabs:
- NCUA Rules Part 722, and
- Interagency Appraisal and Evaluation Guidelines Appendix B.
Additional information can be found in The League’s ii Release No. B008 – Appraisal and Evaluations and this July 15, 2024 Compliance Courier.