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Both CUNA and NAFCU wrote to members of the House Financial Services Committee to show support for addressing the problem with home appraisal biases, since credit unions uniformly rely on accurate and unbiased appraisals to establish market values for lending.
According to data from the U.S. Census, only 45% of Black families and 50% of Latino families own homes, compared to 75% of white families.
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In his letter to the committee, CUNA President/CEO Jim Nussle wrote, "The systemic undervaluation of homes owned by people of color exacerbates the homeownership gap, the racial wealth gap, and, ultimately, harms the long-term financial security of our entire nation. It further discredits the reliability and value of home appraisals generally."
Nussle's letter continued, "Credit unions rely on appraisers for accurate and unbiased opinions on the market value of homes serving as collateral for mortgage loans. When racial prejudice is injected into that process, it prevents credit unions from meeting their mission to serve their members and introduces risk into the housing finance system."
During Tuesday's Committee hearing, Rep. Maxine Waters (D-Calif.) introduced legislation, the Fair Appraisal and Inequity Reform Act of 2022, aimed to address appraisal bias and discrimination by establishing a new Federal Valuation Agency. According to Waters, this legislation was in response to recommendations made by President Joe Biden's Interagency Task Force on Property Appraisal and Valuation Equity (PAVE) last week.
Waters said, "Bias and discrimination in appraisals can result in perpetuating historic disinvestment in communities of color, lowering home values for homeowners of color, locking people of color out of homeownership opportunities, and contributing to the widening of the racial and ethnic wealth and homeownership gaps."
NAFCU and CUNA have come out in support of the PAVE Task Force, as well as continuing to work with the Federal Housing Finance Agency, the NCUA and other agencies to identify technology-driven programs to help remove human biases in the appraisal process.
In a letter filed on Monday, ahead of the committee hearing, NAFCU Vice President of Legislative Affairs Brad Thaler wrote, "Credit unions routinely confirm the consistency, fairness and accuracy of appraisals they receive, and NAFCU sees the modernization of the appraisal process as a logical step to support continued innovation of the housing finance system and a way to help mitigate the risk of human error or bias."
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
