S-1635-119
Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Sponsored by Kevin Cramer (R-ND)
What it does
This bill would modify who is allowed to perform appraisals for federally related mortgage loans — those tied to federally insured banks, FHA programs, or government-sponsored enterprises like Fannie Mae. It would allow federal employees who hold a state appraiser license or certification to work across state lines, require all appraisers to meet competency standards under the Uniform Standards of Professional Appraisal Practice (USPAP), and bar appraisers certified only by a private professional organization (rather than a state) from performing federally related appraisals. It would also add credentialed trainees to the national appraiser registry, allow certified appraisers to use trainee assistance, establish qualifying education requirements, direct the Appraisal Subcommittee to issue grants to state agencies for workforce development, and give the Subcommittee authority to reduce fees charged to appraisal management companies.
Who benefits
Federal employees who hold state appraiser credentials and would gain the ability to work across state lines. Credentialed appraiser trainees who would gain formal recognition on the national registry and expanded opportunities to assist certified appraisers. State certifying and licensing agencies that would receive new federal grant funding for workforce development. Homebuyers and mortgage borrowers in areas with appraiser shortages, who may benefit from a larger pool of eligible appraisers. Appraisal management companies that could see reduced fees. Lenders and financial institutions that rely on timely appraisals to close federally related loans.
Who is hurt
Appraisers who currently hold only a nationally recognized professional organization credential (rather than a state license or certification) and would be barred from performing federally related appraisals. Unlicensed trainees who would not be added to the national registry and may face a less clear pathway to full certification. State-licensed appraisers who currently operate without meeting USPAP competency requirements and would need to come into compliance. Appraisal management companies that may face new regulatory scrutiny over their fee structures, even if some fees are ultimately reduced.
Supporters argue
Supporters argue that the appraisal industry faces a significant and well-documented workforce shortage — the number of active appraisers has declined by roughly 20% over the past decade — which delays mortgage closings and raises costs for borrowers. They contend that allowing credentialed federal employee appraisers to work across state lines and formally recognizing trainees in the national registry would expand the qualified workforce without lowering professional standards. They further argue that requiring USPAP competency for all federally related appraisers and anchoring eligibility to state licensure (rather than private organization credentials) strengthens consumer protections and the integrity of the federal mortgage system.
Opponents argue
Opponents argue that restricting federally related appraisals to state-licensed or certified appraisers — and excluding those credentialed only by nationally recognized professional organizations — could eliminate qualified practitioners and further shrink an already tight workforce. They contend that the bill's grant program and fee-adjustment authority for the Appraisal Subcommittee expand federal administrative reach into what has traditionally been a state-regulated profession, potentially creating compliance burdens for state agencies and appraisal management companies. They also argue that allowing unlicensed trainees to assist on federally related appraisals, even under supervision, could introduce quality-control risks in a process that directly affects the soundness of federally backed mortgage lending.
Constitutional context
Congress has broad authority to regulate the terms of federally backed mortgage lending under the Commerce Clause (Art. I, §8, cl. 3), as such transactions are directly tied to interstate commerce and federal financial institutions. The grant program and fee-adjustment authority delegated to the Appraisal Subcommittee are relatively narrow in scope, but post-Loper Bright v. Raimondo (2024), courts would independently review whether the Subcommittee's implementing rules stay within the statutory authority Congress provides here, rather than deferring to the agency's own interpretation.
Checks and balances
Congress sets the eligibility and training rules; the Appraisal Subcommittee (a federal body) gains new grant-making and fee-adjustment authority; state certifying and licensing agencies retain primary credentialing authority, preserving a federalism check on the system.
Historical precedent
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) first established the federal framework for appraiser licensing and the Appraisal Subcommittee, and has been amended several times — most notably by the Dodd-Frank Act of 2010 — to adjust appraiser eligibility and oversight requirements for federally related transactions.