Valuation Independence (Reg Z)

12 CFR § 1026.42

Regulation Z's valuation-independence rule (12 CFR § 1026.42), implementing TILA § 129E (added by Dodd-Frank § 1472) for consumer credit secured by the consumer's principal dwelling. It prohibits coercing, influencing, or otherwise encouraging a person who prepares a valuation or performs valuation-management functions to base the value on anything other than independent judgment (e.g., to report a target or minimum value), prohibits withholding or threatening to withhold timely payment to pressure a valuation, and prohibits conditioning future engagement or compensation on the value reported or on the transaction closing. It also requires creditors and their agents to compensate fee appraisers at a rate that is customary and reasonable for the geographic market and provides a presumption-of-compliance safe harbor for meeting specified conditions.