Which organization develops and maintains USPAP?
Correct Answer
A) Appraisal Standards Board (ASB)
The Appraisal Standards Board of The Appraisal Foundation develops and maintains USPAP. The Foundation is a private nonprofit established in 1987, not an organization created by Congress. Under Title XI, federal financial institutions regulatory agencies prescribe appraisal standards for transactions within their jurisdiction, including relevant ASB standards. Distinguish private professional standard development from regulatory adoption, supervision and enforcement.
Why This Is the Correct Answer
Option A is correct because the Appraisal Standards Board of The Appraisal Foundation develops, interprets and amends USPAP. Federal regulation itself describes USPAP as established by the Appraisal Standards Board. Regulators adopt and enforce standards, but authorship belongs to the ASB.
Why the Other Options Are Wrong
Option B: Consumer Financial Protection Bureau (CFPB)
Option B, the Consumer Financial Protection Bureau, is wrong because the CFPB issues consumer financial regulations such as Regulation Z; it does not develop USPAP.
Option C: Financial Stability Oversight Council
Option C, the Financial Stability Oversight Council, is wrong because that council addresses systemic financial risk and has no role in writing appraisal standards.
Option D: Federal Housing Finance Agency (FHFA)
Option D, the Federal Housing Finance Agency, is wrong because the FHFA oversees Fannie Mae, Freddie Mac and the Federal Home Loan Banks; it does not develop USPAP.
ASB writes the standards
ASB stands for Appraisal Standards Board, and standards are what it writes: USPAP.
How to use: Use this to separate the ASB from the AQB and from federal agencies.
Exam Tip
Separate who writes the standards (ASB), who sets qualifications (AQB), who monitors states (ASC) and who regulates lenders (federal agencies).
Common Mistakes to Avoid
- -Thinking a federal agency writes USPAP
- -Confusing the ASB with the AQB or the ASC
- -Believing The Appraisal Foundation was created by Congress
Concept Deep Dive
Analysis
This question tests which body develops and maintains USPAP. The Appraisal Standards Board of The Appraisal Foundation develops, interprets and amends USPAP. Federal agencies may adopt or require USPAP but do not write it.
Background Knowledge
The Appraisal Foundation is a private nonprofit organization with boards including the Appraisal Standards Board, which writes USPAP, and the Appraiser Qualifications Board, which sets qualification criteria. Under Title XI, federal agencies require appraisals in their jurisdiction to follow relevant standards, including USPAP.
Real-World Application
During a continuing-education class, an appraiser asks who decided a recent USPAP change. The instructor explains that the Appraisal Standards Board adopts amendments after public exposure drafts, not a federal agency.
More USPAP Questions
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