Committee backs bill allowing appraisers to perform bank evaluations under federal guidelines

Representative Dan Ruby introduced House Bill 1354, which amends state definitions so licensed appraisers may perform property evaluations for financial institutions under federal interagency guidelines when an appraisal is not required.

Appraisers and the North Dakota Appraisers Association testified that federal practice permits lending institutions to use lower-complexity evaluations for lower-risk, in-house loans (for example, certain lines of credit or loans below the appraisal threshold) and that state code currently restricts appraisers because it requires appraisers to follow the Uniform Standards of Professional Appraisal Practice (USPAP) for any valuation activity. Testimony from certified appraiser Steve Vetter and Dean Rylander of the North Dakota Appraisers Association described evaluations as a distinct product used by lenders (photos, comparable pricing and a concise market estimate) that is different from a full public appraisal, which contains broader disclosures and USPAP-mandated content.

The Department of Financial Institutions provided neutral testimony, confirming that federal rules require evaluations where appraisals are not mandated and that evaluations must be performed by someone who is qualified, independent and able to give an unbiased opinion. Credit-union representatives also testified neutral support, noting the change would allow appraisers to produce evaluations for lenders including banks, credit unions and farm-credit lenders where federal practice allows them.

Sponsors and appraisers stressed this is not an attempt to weaken appraisal standards. Instead, HB 1354 creates a statutory exemption that permits appraisers to perform evaluations governed by federal lending guidelines (the interagency evaluation rules) rather than state USPAP rules for evaluations that are legitimately an in-house lender product. Supporters argued the change will expand service capacity — particularly in rural areas — by enabling trained valuation professionals to provide evaluations the way lenders already do with internal staff, and to do so under the supervision and standards lenders expect.

After testimony and questions, the committee voted by roll call to report HB 1354 with a do-pass recommendation.

Why it matters: The bill clarifies which valuation products appraisers may provide and aligns state law with federal lending practice, potentially improving timeliness of certain lending transactions and enlarging the pool of qualified valuation providers for lenders.

Next steps: Committee reported HB 1354 with a do-pass recommendation and a sponsor or committee appointee will carry the bill to the chamber floor.