The bill uses the congressional disapproval process to reject the Federal Reserve’s Quality Control Standards for Automated Valuation Models. If enacted, the rule published in the Federal Register would have no force or effect.
The measure is a straightforward exercise of Congress’s power to disapprove agency rules under existing statute. The outcome, if the joint resolution passes, is that regulated entities would not have to implement the Fed’s QC standards for AVMs, and the status quo in real estate valuation would remain in place.
This matters for banks, nonbank lenders, AVM vendors, and secondary market participants who rely on automated valuations in underwriting and risk management. It also signals lawmakers’ willingness to intervene in agency rulemaking around valuation accuracy and technology-driven underwriting, with potential downstream implications for compliance costs and supervisory expectations.
At a Glance
What It Does
The bill uses the congressional disapproval mechanism under 5 U.S.C. Chapter 8 to disapprove the Federal Reserve’s rule on Quality Control Standards for Automated Valuation Models (AVMs). If enacted, the rule has no force or effect.
Who It Affects
Federally regulated lenders, AVM providers, and financial institutions that rely on automated valuations in mortgage underwriting and risk management.
Why It Matters
It preserves the status quo for AVM valuation processes and demonstrates Congress’s ability to invalidate agency rules, potentially affecting future regulatory design and cost structures in the mortgage and housing finance system.
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What This Bill Actually Does
This bill, H.J.Res.48, uses a special mechanism to disapprove a Federal Reserve rule that would have imposed quality control standards on automated valuation models used in property valuations. The rule in question was published in August 2024 in the Federal Register as 89 Fed.
Reg. 64538. If Congress approves the joint resolution, the rule will have no legal effect, and lenders can continue to operate under existing valuation practices without the added QC requirements.
The bill is introduced by Representative Clyde (R) and currently sits in committee in the 119th Congress. It does not repeal other Fed authorities or create alternative standards; it simply nullifies this specific rule.
For financial institutions relying on AVMs, the immediate impact is the avoidance of a new layer of federal QC compliance. For compliance teams, this means no new federal standard to implement unless Congress later acts otherwise.In short, this is a precise, technical move to stop a particular regulatory rule from taking effect, with broader implications for how Congress exercises oversight over rulemaking in the monetary and housing finance space.
The Five Things You Need to Know
The bill uses the congressional disapproval process under 5 U.S.C. Chapter 8 to reject a Fed rule on AVM QC standards.
The rule targeted is Quality Control Standards for Automated Valuation Models, published at 89 Fed. Reg. 64538 on August 7, 2024.
If enacted, the rule shall have no force or effect.
H.J.Res.48 was introduced February 12, 2025 by Rep. Clyde (R) in the 119th Congress and referred to the Committee on Financial Services.
The resolution does not amend other Fed authorities or substitute an alternative standard; it solely disapproves this rule.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Disapproval of the Fed AVC QC Rule
This section states that Congress disapproves the Federal Reserve Board’s Quality Control Standards for Automated Valuation Models, as published in the Federal Register (89 Fed. Reg. 64538, August 7, 2024). The effect is explicit: the rule shall have no force or effect. This portion captures the core action of the joint resolution and anchors its legal consequence in the designated rule.
Scope and Effect
The disapproval applies only to the specified rule concerning AVMs. By declaring the rule void, Section 2 ensures that no compliance or supervisory obligations tied to that rule would take effect if the bill becomes law. The section implicitly preserves other regulatory authorities and does not create an alternative standard.
Procedural Context
This section places the resolution within the standard congressional process for disapproving agency rules. It notes the bill’s status as introduced in the 119th Congress and references its referral to the Committee on Financial Services. It does not enact any other policy changes beyond disapproval of the named rule.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Federally regulated lenders that rely on AVMs and underwriting teams who would avoid additional QC burdens.
- AVM software providers and fintech firms that would face a potentially heavier regulatory cost under the QC rule.
- Secondary market participants (investors and securitizers) whose valuation processes would be stabilized by avoiding new federal standards.
Who Bears the Cost
- Homebuyers and homeowners who might otherwise bear valuation risk if QC standards reduce reliance on or quality of AVMs.
- Small- to mid-size lenders that would incur costs to implement additional QC processes under a federal standard (which would now be avoided).
- Regulators and supervisory staff who would face different oversight dynamics if the rule remained in force and required additional compliance work.
- Appraisal and real estate professionals who could experience shifts in competition between AVMs and traditional appraisals if QC standards changed the valuation landscape.
Key Issues
The Core Tension
The central dilemma is balancing the efficiency and innovation potential of AVMs against the need for reliable, standardized quality controls. The bill resolves this by removing a federal rule, but it leaves open how mortgage valuations will be governed in practice and who bears potential valuation risk in the absence of a Federal QC standard.
The bill’s disapproval approach presents a policy tension between reducing regulatory burden on financial institutions and maintaining robust valuation oversight in a fast-evolving, technology-driven market. By nullifying a specific federal rule, Congress avoids imposing the QC framework on AVMs but raises questions about consistency in valuation standards across lenders and markets.
The absence of an explicit replacement standard means institutions may rely on internal controls or voluntary best practices, with supervisory expectations left to other rules or guidance. This tension will be most acute for consumers if valuation accuracy deteriorates without a formal QC standard, and for lenders seeking predictable, uniform requirements across the housing finance system.
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