1155 15th Street, NW, Suite 1111 

Washington, DC 20005 

T 202.347.7722 

F 202.347.7727 

June 15, 2011 

Employee Benefits Security Administration (EBSA) 

U.S. Department of Labor 

Room N-5655 

200 Constitution Avenue, NW 

Washington, DC 20210 

Via Electronic Mail: e-ORI@DOL.gov

RE: Definition of Fiduciary Proposed Rule (RIN 1210-AB32) 

 

Dear Sir or Madam: 

It has come to the attention of The Appraisal Foundation that the Department of Labor is considering 

proposed regulations that would recognize appraisers as “fiduciaries” under the Employee Retirement 

Income Security Act (ERISA). We are writing to strongly urge the Department of Labor not to include 

appraisers as fiduciaries in the regulations as currently proposed. 

By way of background, The Appraisal Foundation, a not-for-profit 501 (c) 3 organization, was given 

specific authority by the Congress in 1989 (Title XI of the Financial Institutions Reform Recovery and 

Enforcement Act) regarding the real property appraiser regulatory system. 

Specifically, (1) all state licensed and certified real estate appraisers must adhere to our standards of 

conduct (the Uniform Standards of Professional Appraisal Practice (USPAP)), (2) all state licensed and 

certified appraisers must meet our minimum requirements for education and experience, and (3) all 

states and territories use our licensing and certification examinations. In addition, we have worked 

with several U.S. government agencies on improving their internal appraisal operations and last 

week signed a Memorandum of Understanding with the U.S. Department of Energy regarding the 

valuation of energy efficient (“green”) buildings. 

We reference our experience with U.S. government agencies because we are unaware of any agency 

having to take such an extraordinary step as classifying appraisers as fiduciaries. Agencies have 

taken measures to ensure that appraisers are properly qualified and that they adhere to a set of 

recognized standards of conduct. As an example, the Internal Revenue Service recently addressed 

this issue by defining who is a “qualified appraiser” and what constitutes a “qualified appraisal.” 

There are several ways to ensure appraisal competency and professionalism and we would be 

pleased to meet with you to discuss the options. 
U.S. Department of Labor 

June 15, 2011 

Page Two 

The standards of conduct that are referenced above, USPAP, are the generally recognized standards 

of the valuation profession and are referenced in court decisions involving valuation assignments of 

all types of assets. These standards are promulgated by our independent Appraisal Standards Board. 

As you can see from their enclosed correspondence, requiring an appraiser to be a fiduciary would 

place the appraiser in direct conflict with the core elements of the ethical standards of the valuation 

profession. 

Accordingly, we strongly urge the Department of Labor not to include appraisers as fiduciaries in the 

regulations as currently proposed. As the Employee Benefits Security Administration moves forward to 

ensure that competent, professional appraisers are producing independent and credible appraisals, we 

hope that you will view The Appraisal Foundation and the Appraisal Standards Board as a resource in 

your efforts. 

Sincerely, 

David S. Bunton 

President 

Enclosure 
June 15, 2011 

Employee Benefits Security Administration (EBSA) 

U.S. Department of Labor 

Room N-5655 

200 Constitution Avenue, NW 

Washington, DC 20210 

RE: Definition of Fiduciary Proposed Rule (RIN 1210-AB32) 

Via Electronic Mail: e-ORI@DOL.gov

Dear Sir or Madam: 

The Appraisal Standards Board (ASB) of The Appraisal Foundation is authorized by Congress as 

the source of appraisal standards. These standards are promulgated by the ASB via the Uniform 

Standards of Professional Appraisal Practice (USPAP). 

It has recently come to the attention of the ASB that the Department of Labor is considering 

proposed regulations that would recognize appraisers as “fiduciaries” under the Employee 

Retirement Income Security Act (ERISA). Specifically, one of the tests in the proposed 

regulations that would establish an individual as a fiduciary is as follows: 

Provide advice, appraisals or fairness opinions as to the value of investments, 

recommendations as to buying, selling or holding assets, or recommendations as to the 

management of securities or other property. (Bold added for emphasis) 

The ASB sees a significant potential conflict with USPAP if appraisers are recognized as 

fiduciaries. As you’re certainly aware, Black’s Law Dictionary defines “fiduciary,” in part, as 

follows: 

“...a person is a fiduciary who is invested with rights and powers to be exercised for the 

benefit of another person.” (Bold added for emphasis) 

An “appraiser” is defined in USPAP as: 

“One who is expected to perform valuation services competently and in a manner that is 

independent, impartial, and objective.” (Bold added for emphasis)
June 15, 2011 

Page 2 of 2 

In addition, the first line of the PREAMBLE to USPAP states: 

“The purpose of the Uniform Standards of Professional Appraisal Practice (USPAP) is 

to promote and maintain a high level of public trust in appraisal practice by 

establishing requirements for appraisers.” (Bold added for emphasis) 

One of the primary tenets in achieving public trust has been fostered in the principle that an 

appraiser must be a disinterested third party in the transaction. In fact, the ETHICS RULE in 

USPAP prohibits an appraiser from performing with bias or advocating for “the cause or interest 

of any party or issue.” Black’s definition appears to require that a fiduciary perform as an 

advocate. The role of a fiduciary is clearly inconsistent with the recognized and accepted 

independent role of an appraiser. 

It is the belief of the ASB that an individual cannot act “for the benefit of another person” and 

remain “independent, impartial, and objective” at the same time. As a result, if the proposed 

regulations are adopted, appraisers would be put in a position where they are conflicted between 

the Department of Labor regulations and USPAP (which state licensed and certified real estate 

appraisers are required by law to comply with). 

As a result, the ASB strongly urges the Department of Labor not to include appraisers as 

fiduciaries in the regulations as currently proposed. 

If you have any questions or need additional clarification, please feel free to contact us. 

Sincerely, 



J. Carl Schultz, Jr. 

Chair 

Appraisal Standards Board