On Tuesday, August 21, 2012, the Consumer Financial Protection Bureau (the “Bureau”) issued proposed amendments to its Regulation B (Equal Credit Opportunity) to implement the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Act”) with respect to certain appraisal rights. Comments must be received by October 15, 2012.
Generally, the purpose of the Equal Credit Opportunity Act (“ECOA”) is to promote the availability of credit to all creditworthy applicants without regard to race, color, religion, and other similar considerations. ECOA applies to all credit, commercial as well as consumer, regardless of the type of credit or the type of creditor. Historically, Section 701(e) of ECOA has permitted a consumer credit applicant to obtain a copy of any appraisal used in connection with a mortgage loan application.
The Act amended ECOA to require creditors to provide free copies of written appraisals and valuations used in connection with an application for a first-lien mortgage loan. The Act also requires creditors to disclose to consumers their right to receive a copy of each additional appraisal or valuation at no additional charge. Note that, while the creditor may charge a reasonable fee to reimburse it for the appraisal itself (unless otherwise provided by law), copies sent to the consumer must be without charge.
Creditors may comment, and should do so if they think that these changes, or the specifics of the implementation of these changes as published in the notice, will have an adverse effect on their businesses. According to the notice of proposed rulemaking, comment letters should refer to Docket No. CFPB-2012-0032 or RIN No. 3170-AA26 and may be sent by any of the methods set forth in the Federal Register notice, found on page 50390 of Vol. 77, No. 162 (August 21, 2012).