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Bill would ask Commerce to adopt voluntary appraisal disciplinary matrix; department raises concerns
Summary
House File 2,400 would ask the Minnesota Department of Commerce to use the Appraisal Foundation’s voluntary disciplinary action matrix in regulating appraisers. The appraisal industry and Commerce testified before the House Commerce Finance and Policy Committee on March 25 with competing views about consistency and enforcement flexibility.
Representative Nolan Hewitt moved House File 2,400 before the committee on March 25, asking the Department of Commerce to adopt the Appraisal Foundation’s Voluntary Disciplinary Action Matrix as guidance in sanctions for appraisers.
Brett Hall, education chair for the North Star Chapter of the Appraisal Institute, told the committee the change would create consistency and transparency in disciplinary actions. Hall said appraisers already must follow the Uniform Standards of Professional Appraisal Practice (USPAP), and a codified matrix would provide a consistent framework so similar violations receive similar penalties.
Sam Smith, speaking for the Department of Commerce, told the committee that Commerce currently uses the factors in Minnesota Statutes 14.045, subdivision 3, when weighing enforcement penalties and that the department has not been cited by the Appraisal Subcommittee (ASC) for inconsistency. Smith said the voluntary matrix runs 69 pages, lacks definitions for penalty categories such as “small” and “medium” fines, and could complicate investigations. He said Commerce’s concern is that the bill would effectively require selecting only parts of the matrix rather than applying it comprehensively.
Witnesses cited federal and state background. Hall pointed to the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and USPAP as the origin of uniform national appraisal expectations; he said the matrix aligns Minnesota with national standards and would help public trust in valuations used by lenders and investors.
Committee members asked whether there is a current pattern of poor appraisals in Minnesota; Commerce replied that it receives consumer complaints but did not identify a disproportionate problem compared with other states. Members and witnesses agreed on the public interest in consistent standards but differed on the appropriate statutory approach.
Action: Representative Hewitt moved the bill; the chair laid House File 2,400 over for possible inclusion in a future omnibus bill.
Next steps: Commerce and industry said they would continue to confer to try to produce language that balances enforcement clarity, statutory requirements and administrative flexibility.
