H.J.Res.49 - Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Federal Deposit Insurance Corporation relating to Quality Control Standards for Automated Valuation Models. (119th Congress)
Summary
H.J.Res.49 proposes congressional disapproval of a rule submitted by the Federal Deposit Insurance Corporation (FDIC) concerning Quality Control Standards for Automated Valuation Models (AVMs). The resolution aims to nullify the FDIC rule published in the Federal Register on August 7, 2024. Mr. Clyde introduced the resolution in the House of Representatives, and it was referred to the Committee on Financial Services.
The resolution invokes Chapter 8 of Title 5 of the United States Code, which provides a mechanism for Congress to review and disapprove agency rules. If passed, the resolution would prevent the FDIC rule from taking effect.
This action reflects a congressional check on the regulatory authority of the FDIC, specifically regarding the standards applied to automated property valuation.
Expected Effects
If H.J.Res.49 is enacted, the FDIC's rule on Quality Control Standards for Automated Valuation Models will not take effect. This would leave the existing regulatory framework for AVMs unchanged.
The likely effect is that the standards for AVMs would remain as they were prior to the FDIC's proposed rule. This could impact the accuracy and reliability of property valuations used in mortgage lending and other financial transactions.
The resolution reflects a potential shift in the oversight and governance of financial regulations, giving Congress more direct control over agency rulemaking.
Potential Benefits
- Potentially prevents unintended consequences of the new rule on the housing market.
- Allows for further review and refinement of AVM standards before implementation.
- Reinforces congressional oversight of regulatory agencies.
- May reduce compliance costs for financial institutions if the rule is deemed overly burdensome.
- Could maintain stability in the valuation process if the existing system is considered adequate.
Potential Disadvantages
- May delay improvements in the accuracy and reliability of AVMs.
- Could perpetuate existing flaws or biases in property valuation processes.
- Might hinder innovation in the development and use of AVMs.
- Could create uncertainty for financial institutions that were preparing to comply with the new rule.
- May weaken the FDIC's ability to ensure the safety and soundness of the financial system.
Constitutional Alignment
This resolution aligns with Article I, Section 1 of the U.S. Constitution, which vests all legislative powers in Congress. The Congressional Review Act, under which this resolution is filed, is an exercise of Congress's power to oversee and check the actions of executive branch agencies.
By disapproving the FDIC rule, Congress is asserting its authority to shape regulatory policy, consistent with the separation of powers principle. The resolution does not appear to infringe upon any specific constitutional rights or protections.
However, the appropriateness of this action depends on whether the FDIC's rule itself is consistent with its statutory mandate and the overall intent of financial regulations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).