The NAACP Legal Defense and Educational Fund, Inc. (LDF) and the Center for Responsible Lending (CRL) submitted a comment in response to the federal financial regulators’ proposed rulemaking on Quality Control Standards for Automated Valuation Study after study has found ongoing, significant undervaluation of homes in communities of color and owned by people of color.

Due to decades of past and ongoing discrimination, homes in Black communities and homes owned by Black people are consistently undervalued, contributing to the racial wealth gap. Although some have argued that AVMs can eliminate human bias, these systems can pose the same fair housing, fair lending, and safety and soundness risks. Without stringent quality controls, AVMs risk replicating appraisal bias on a mass scale. While we applaud the federal financial regulators for acknowledging the risk of algorithmic bias in AVMs, they must expand the final rule and issue additional guidance in order to ensure that these tools do not replicate past and present discrimination.