ABA advises CFPB to stabilize issues, advantages of AVMs in rulemaking

The American Bankers Association today used feedback to the CFPB on a current overview of propositions under factor to consider for a joint firm rulemaking to establish quality assurance requirements for making use of computer system designs, referred to as automated assessment designs. The Dodd-Frank Act needs the bureau, the banking companies, National Credit Union Administration and the Federal Housing Finance Agency to compose a guideline to reinforce oversight of the designs to “ensure a high level of confidence in the estimates; protect against the manipulation of data; avoid conflicts of interest and require random sample testing and reviews.”

In the letter, ABA questioned the advantages of a quality assurance aspect for reasonable loaning, keeping in mind that banks’ usage of AVMs is currently greatly managed by the banking companies which banks undergo routine guidance for reasonable loaning compliance. ABA likewise advised the CFPB to keep the scope of the guideline customized just to AVMs utilized for underwriting choices, exempt banks’ usage of AVMs for appraisal waivers and otherwise guarantee that regulative concern is reduced so as not to prevent banks from utilizing AVMs.

ABA likewise advised the CFPB to stabilize issues about AVMs with the advantages, stressing that “AVMs provide benefits to consumers and the industry by reducing origination costs, easing issues caused by appraiser shortages, including in rural areas, and providing objectivity that may address concerns about individual appraisers’ bias.”


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