Congress blocks Fed safeguards on AI home-valuation models
H.J.Res. 48 — Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Board of Governors of the Federal Reserve System relating to "Quality Control Standards for Automated Valuation Models". · Filed by Andrew Clyde (R-GA) · Introduced Feb 12, 2025 · Referred to committee
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What it does
This resolution uses the Congressional Review Act to block a Federal Reserve rule requiring quality-control standards for automated home-valuation models. The rule, published in August 2024, would have imposed standards on AI/algorithmic systems used to estimate property values in lending and appraisal. Disapproving it means lenders and appraisers can continue using automated valuation models without the Fed's new quality safeguards.
Why we flagged it
This is a straightforward Congressional Review Act disapproval resolution targeting a specific Federal Reserve rule. It uses the CRA's one-sentence procedural mechanism to block a regulatory standard without amendment or debate. The mechanism is transparent and the effect is deregulatory.
What the text implies
- Disapproving the rule may set a precedent for blocking other Fed AI/algorithmic governance rules, potentially weakening oversight of machine-learning systems across banking and lending.
- Automated valuation models are widely used in mortgage underwriting, appraisal, and secondary-market pricing; removing quality standards may increase systemic risk if defective models propagate valuation errors across the housing market.
The full analysis lists 3 implications of this text.
Who stands to gain
mortgage lenders and servicers; automated valuation model vendors; appraisal management companies