Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Federal Housing Finance Agency relating to "Quality Control Standards for Automated Valuation Models".

Bill Number

H.J.Res. 52

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Housing and Community Development

Status

Introduced

Latest Action

2025-02-12: Referred to the House Committee on Financial Services.

Last Updated

2025-02-14T15:29:40Z

AI-Generated Summary

Purpose

This joint resolution (H.J. Res. 52) aims to disapprove and nullify a specific rule issued by the Federal Housing Finance Agency (FHFA), an independent agency that oversees housing finance entities like Fannie Mae and Freddie Mac. The rule in question sets standards for automated valuation models (AVMs), which are computer-based tools used to estimate property values for mortgages and loans. By disapproving the rule, the resolution prevents it from taking effect, invoking the Congressional Review Act (a law that allows Congress to overturn certain federal agency regulations).

Key Provisions

• Disapproval Statement: The resolution explicitly disapproves the FHFA rule titled "Quality Control Standards for Automated Valuation Models," published in the Federal Register on August 7, 2024 (89 Fed. Reg. 64538).
• Effect on the Rule: If enacted, the rule would have no legal force or effect, meaning the standards it establishes cannot be implemented or enforced.
• Legislative Process: Introduced in the House of Representatives on February 12, 2025, by Representative Clyde, and referred to the Committee on Financial Services for review. It requires passage by both the House and Senate, followed by presidential approval or override of a veto, to become law.

Significant Changes to Existing Law

• This resolution does not create new laws but uses the Congressional Review Act to repeal an existing agency rule before it fully takes effect.
• Without this resolution, the FHFA rule would introduce mandatory quality controls for AVMs, such as requirements to address data quality, bias risks (e.g., in algorithms that might unfairly value properties based on location or demographics), and governance oversight for entities using these models in federally backed mortgages.
• If passed, it reverts the status quo, leaving AVM oversight to prior, less comprehensive guidelines or voluntary practices, potentially delaying or avoiding new federal mandates on appraisal technology.

Potential Impacts

• On Government Agencies: The FHFA would be unable to enforce the rule, reducing its regulatory authority over housing finance enterprises. This could affect how Fannie Mae, Freddie Mac, and the Federal Home Loan Banks manage risk in loan approvals, possibly leading to less standardized practices across the industry.
• On Citizens: Homebuyers, sellers, and borrowers relying on mortgages could face unchanged or less regulated AVM use, which might result in inconsistencies in property valuations. This could influence loan approvals, interest rates, or equity in housing markets, particularly in areas where AVMs have been criticized for inaccuracies or biases affecting minority communities.
• On International Relations: No direct impacts, as the rule pertains to domestic U.S. housing finance.
• Broader Economic Effects: Delaying AVM standards might slow the adoption of efficient, tech-driven appraisals but could also reduce compliance costs for lenders, potentially stabilizing or lowering mortgage fees in the short term.

Main Stakeholders Affected

• Federal Housing Finance Agency (FHFA): Directly impacted as the rule's issuer; its regulatory efforts would be overridden.
• Government-Sponsored Enterprises (GSEs): Fannie Mae, Freddie Mac, and Federal Home Loan Banks, which must comply with FHFA rules and use AVMs for loan underwriting.
• Mortgage Lenders and Financial Institutions: Banks and credit unions that originate loans backed by GSEs; they would avoid new compliance requirements but might face higher risks from unregulated AVMs.
• Real Estate Industry and Consumers: Appraisers, real estate agents, homebuyers, and sellers, who could see varied effects on property valuations and market fairness.
• Technology Providers: Companies developing AVM software, which would not need to meet the rule's quality and bias-mitigation standards.

Notable Legal, Constitutional, or Political Implications

• Legal Implications: Relies on the Congressional Review Act (enacted in 1996), which provides a fast-track mechanism for Congress to review and veto agency rules with limited opportunity for judicial challenge. If successful, the rule cannot be reissued in substantially similar form without new congressional authorization, strengthening legislative checks on executive agencies.
• Constitutional Implications: Reinforces the separation of powers by allowing Congress to assert oversight over administrative rulemaking, aligning with Article I's grant of legislative authority. However, it could raise questions about the balance between agency expertise in technical areas (like AI in finance) and direct congressional intervention.
• Political Implications: Highlights partisan or ideological divides on regulation; such resolutions often reflect efforts to curb perceived overreach by federal agencies, especially in areas like technology and fair housing. Passage could signal broader congressional intent to roll back Biden-era rules, influencing future agency actions in housing policy.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Clyde, Andrew S. [R-GA-9]

Recent Actions

• 2025-02-12: Referred to the House Committee on Financial Services.
• 2025-02-12: Introduced in House
• 2025-02-12: Introduced in House

Bill Versions

• Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Federal Housing Finance Agency relating to "Quality Control Standards for Automated Valuation Models". — issued 2025-02-12 — PDF (1 pages)