broadcasting wireless cable and information services licenses. while i agree with you, we should have the diverse ownership and control of wireless services. i would like to look more into something that's written in your testimony. it says, and i quote, the broadcast model permits a diversity of ownership and control that does not exist in wireless services, end quote. and you know, mr. barrett, for example, the minorities make up more than one-third of the u.s. population, yet only own an estimated 3% of foreign power commercial television stations and a little more than 7.5% of commercial radio stations.

and i strongly suspect that minority cable system ownership, numbers are not much better and much lower. do these numbers suggest to you there's sufficient diversity of ownership and offer aings of diverse media content, and should we be concerned that those levels could decrease even further following voluntary relocation of broadcasters during the lead up to incentive options? >> i think those numbers suggest that there is a sad limitation on the number of minorities that are involved in ownership. i think my comments and my remarks are meant to suggest that there are 1700 or so tv stations across the country. there is an opportunity for diverse ownership and there may be in a world where the national licensees and the national

providers of the content is the reality that we live with. and i think the country is at risk in terms of less diversity, and i would note that minority groups are very dependent on broadcast reception. 28% of asian household, 23% of african-american households, 26% of latino households are today receiving broadcast reception over the air. >> thank you very much. mr. chairman, without objection i would like to enter into the record my letter that was just filed with the fcc a couple days ago by a number of stake holders asking the fcc to study the state of black radio ownership and programming diversity and to induct rules that address these disparities. even though the subject we're take aing up today is video and not audio, these stated concerns and the state of minority ownership in the video marketplace is even more acute and troubling. >> no objection. >> all right.

this is a question i have for both mr. barrett and mr. powell around the issue of tax certificates. in the past, mr. barrett, your association we're representing here today strongly endorse passage of legislation to establish a new communications tax certificate program. is that still the na b's position? >> yes, it is. the nab would continue to support such a legislation initiative. >> and mr. powell, the association that you're representing here today also previously endorsed passage of legislation for new communications tax certificate programs. is that still the ncta's position? >> yes, mr. rush. in 2003 when senator mccain introduced tax certificate as chairman of the fcc it was an

enormous proponent and remains so. >> thank you very much. mr. chairman, without objection i would like to enter into the record the fcc's section 257 report recommending that congress reinstate a tax certificate policy. i would point out that the statement of former fcc commissioner michael j. comps, accompanying that order and being the source for the minority ownership percentages that i cited earlier. and with that, mr. chairman, i yield back the balance of my time. >> gentleman yields and there's no objection to the gentleman's unanimous consent motion. so that will be entered. now the gentleman from massachusetts, mr. markey. >> thank you, mr. chairman, very much. miss sohn, can you tell us about the telecommunications marketplace?

so it will have negative effects both for competition and consumers. one is because there are these side agreements -- okay, there's a spectrum sale and affiliated side agreements. one is a marketing agreement, one is a reselling agreement. it's an agreement between the cable companies and verizon to lay down arm as and no longer compete in the video or wireless marketplace. so verizon and at&t will get the wireless marketplace to themselves. verizon will get the wire line industry to themselves. even worse than that, there's the joint operating entity. that's an agreement between those five cable companies and verizon to develop patents and technologies that would help to stream video from wireless to wire line systems. that has an enormous capability to be compared and used against,

for example, mr. ergen's company. if he wants to use the technology he probably wants to be charged high licensing fees and he needs to be told, sorry, you're not part of the club and not part of the cartel, you can't use this technology. >> are you afraid of that, that you might not be part of the club as i guess what miss sohn is saying that it's got to be in a cozy, cooperation here that exists and you just might get walled out. do you agree that's a possibility? >> unfortunately, we have not seen the unredacted comment, so i can't say specifically what they say, but we would certainly have a concern where two vicious competitors might get together to, a, not compete with each other, and, b, exclude people from competing with them. >> yeah. that's always been the beauty of the 1992 and 1996 telecom act is that it created, you know, the conditions for darwinian

paranoia-inducing competition which ultimately is the result -- which ultimately results in the innovation and more benefits for consumers and so you always have to be wary especially when people talk about rewriting the 1992 and '96 telecommunications act. somehow there's too much competition or too many players out there and maybe some of the smaller players don't need protection. let me go to you, mr. powell. you just heard the two comments made by miss sohn and mr. ergen. how would you comment upon them? i would be limiting my comments because as head of the association i would not be a party to the transaction and not have the specifics that they have in terms of the conversation. all deals like this deserve

vigilance, and that's why we have an anti-trust process. i think that's why we should rely on the skills of the federal communication commission and the anti-trust division to vigorously scrutinize the transaction for those purposes and to reach a conclusion in the public interest. i don't believe that it's intuitively clear that it's a capitulation and it wouldn't be continued competition among these companies and i think that's why we have an antitrust process and i have a lot of faith in it. >> let me ask you, mr. barrett and you, mr. o'leary. july 1st is the deadline for the completion of the rule making and the implementation of the provision switch i built into a 2010 law for video accessibility. can you give us an update as to where the two industries are in terms of complying with that? >> speaking on behalf of hearst television, we are well in hand.

our implementation will be fully complete and i'm very pleased with how that has proceeded and on behalf of the nab member stations the same can be said. >> mr. o'leary? >> i would say effectively the same thing in response to your question. >> and what was that? >> that we are working towards a compliance and also pleased with the way the process is going. >> is it so important that the deaf and the blind do have access in the 21st century? that a they are able to use all of their god-given abilities to fully participate, and so it really is -- it's very, very important that we get the full cooperation. we thank you for your positive comments about the process. i thank you, mr. chairman. i yield back the balance of my time. >> the gentleman yields back the balance of his time and that's the last member of the subcommittee with the time. i want to thank all of the

participants today. as you probably heard from the colleagues and they have other questions that they submit for the record that they can be responsive in the answers and help us in the work, your presence today certainly does that a. these are kons kben shl issues we're discussing at a policy level. your input is really helpful in our process. so i thank you for participating. with that, the hearing is adjourned. next on c-span 3, a house financial services subcommittee on how the dodd-frank act affects the appraisal process. at 5:00 eastern, the senate foreign relations committee

hears testimony from business leaders on the law of the sea treaty, that defines the laws and responsibilities of nations in international waters. i want to tell you about a couple of events coming up tomorrow on our companion network, c-span. see the congressional gold medal ceremony honoring the montford point marines who were stationed at montford point camp in north carolina. at 8:00 p.m. eastern, we talk about the beginnings, controversies, and changing means of the statue of liberty at an event hosted by the museum of jewish heritage. this weekend, head to the state capitol named in honor of thomas jefferson with book tv. saturday at noon eastern, literary life with book tv on c-span 2.

former senator and missouri first lady on family life inside the governor's mansion, from her book "if walls could talk." also, a provisions list from ancient times to the university of missouri special collections. the story behind eight miniature babylonian clay tablets. sunday at 5 p.m. eastern -- >> at one time in 1967, this was called the bloodiest 47 acres in america. >> a former warden takes you through the historic missouri state penitentiary. also, walk back through history in the halls of the missouri state capitol and governor's mansion. once a month, c-span's local content vehicles explore the history and literary life of cities across america. this weekend from jefferson city, saturday at noon and sunday at 5:00 eastern on c-span 2 and 3. coming up next, a house financial services subcommittee on how the dodd-frank act

affects the housing appraisal process. testifying are the heads of several of those agencies who say implementation should move more quickly. from capitol hill, this hearing is just over two hours. >> this hearing of the subcommittee on insurance housing and community opportunity will come to order. opening statements will be made part of the record and without objection, all members' opening statements will be made part of the record. i will yield myself as much time as i may consume for an opening statement. good morning. i want to welcome our witnesses. today's hearing is entitled appraisal oversight, the regulatory impact on consumer and businesses. i would like to say that timing is everything and i think that

hopefully, some of our members will be here shortly after they find out what's going on at other places. we are examining how appraisal related provisions in the dodd-frank act and other regulatory initiatives have affected consumers in the real estate industry. this hearing is a continuation of the subcommittee's oversight work related to the mortgage origination process. a key element of a vibrant and sound housing market is effective appraisal regulation. regulation should facilitate robust competition among industry participants, it should ensure transparency and integrity throughout the mortgage origination process, while giving law enforcement officials the necessary tools to weed out bad actors. appraisal regulations should avoid placing unnecessary burdens on businesses and most importantly, benefits consumers. during today's hearing we'll

examine the federal and state roles in appraisal regulation. we will also explore suggestions to improve the appraisal regulation structure and regulations. for example, can we make more efficient, consistent and effective appraisal oversight by streamlining regulations and redundant efforts to monitor the appraisal industry. finally, some mortgage industry participants have raised concerns about concentration in the appraisal industry as well as the quality and accuracy of appraisals. how can regulations enhance integrity among appraisers and ensure accuracy and appraisal valuations. given the broad interest in the issue of appraisal regulations, i would like to hold at least a second hearing during the 112th congress on this subject to hear from other stake holders. so with that i look forward to hearing from today's witnesses. i hope that today's hearing will provide members of the subcommittee with a variety of ideas as to how appraisal regulation can be improved for both consumers and businesses.

i would like to recognize our ranking member, the gentleman from illinois, mr. gutierrez, for his opening statement. >> thank you very much for yielding, madam chair. thank you for holding the hearing. as we proceed with profound systemic and comprehensive financial system and housing finance reform, it is becoming increasingly clear that we will benefit greatly from a clearly defined fair sound and well regulated system of property appraisals. in other words, all of the industries involved in the real estate market from builders to consumers will benefit from a clear and level playing field in the appraisal system. i look forward to hearing about the gao, what the gao found in its two studies on this issue, specifically the several weakens it identified that have limited the appraisal subcommittee's effectiveness in discharging its duties, specifically weak enforcement tools and reporting procedures. in addition, whether the ase is fully addressing the requirement to create and operate a national hotline to receive complaints of compliance with standards and uniform standards of

professional appraiser practices. i look forward to learning more about the concerns of appraisers and their representative organizations on the impact appraisal management companies are having not only on the ability of experienced appraiser to make a living but on the quality of the appraisals as they impact the housing and financial specifically consumers. madam chair, it's important to understand the concerns of other stake holders such as realtors and mortgage brokers regarding this. and other aspects of appraisal issues. but most important to me and i think many of our colleagues on this side of the aisle, i want to learn how these appraisal issues are affecting consumers, including whether or not consumers are receiving their money's worth in terms of quality of appraisal they pay for. are they being fully informed of what they're paying for and are they protected from fraud and do they have the proper means to address their grievances. i understand there is much to cover in this hearing and this is only another step in the examination of this critical issue. therefore, i thank you and yield

back the balance of my time. >> thank you, mr. gutierrez. the gentle lady from west virginia is recognized for two minutes. >> thank you. thank you, madam chair and the ranking member. i thank everybody for being here today. there's just nothing going on in congress today so i'm glad we're here to talk about appraisals. i would like to thank the chairman for looking into this, as it is important. i will keep this brief. i want to take a few moments to address an issue that i've heard really complaints about in my state of west virginia. i believe that the appraisal process is absolutely essential and so important to the mortgage process because as we know, a sound regulatory structure in which the industry can operate and serve the consumer is of prime importance. i hope to get a better clarification today as to whether the appraisal subcommittee can handle this role or whether it would be better left to the states to act as the primary regulator. my main focus, though, has been to have a marketplace for the consumer, that the consumer can access.

i represent a state where home values are relatively low. we don't have a lot of foreclosures. we didn't get out over our skis like a lot of other places. so purchasing a home may appear to be very affordable. it still strains a lot of the home budgets and i'm concerned because i hear of folks, of rising costs of appraisals and that appraisals in some cases are unfamiliar with the area in which they are making the appraisals, local markets, even in a small state like west virginia, it might not sound like much but if you're coming from elkins to appraise a home in charleston, it is a totally different market. it's also 130 miles away. so you know, if this is the case, i know that the amcs have had an increased market share since 2008 and i'm curious to know what has contributed to this, putting a middle layer or more increased middle layer, has that increased the cost of the appraisal to the consumer. i'm really concerned about the cost of the appraisal to the consumer and the accuracy of the

appraisal is essential. so i'm interested to know if dodd-frank provisions have absolutely created a more consumer-friendly process or not. so i appreciate the chairman for holding this hearing and i welcome our panelists to the committee room. thank you. >> the gentleman from california, mr. miller, is recognized for two minutes. >> i want to thank you for having this hearing this morning. it's extremely important. the appraisal process was broken but to some degree, is still broken. after hvcc passed in dodd-frank i remember arguing vehemently about the process going in the direction we're heading and it proved to be right, it was a disaster and we repealed most of that but there's a lot lingering after that process that still they're having to deal with. out of area appraisals are

significant process, problem we're dealing with. using distress sales as comparables, it oftentimes creates more problems than it does benefit, because an appraiser who is not a local appraiser doesn't understand the difference between the distressed property and the rehab that's necessary to take place to make this a comparable property, and a property that's not a rehab, what they're dealing with in those areas so there's a lot of confusion and ambiguity in the process has to be dealt with. new home construction is another good example. you're trying to compare a new home to a piece of property that sold for less than sticks and bricks that they're not comparable, they don't have the new standards, new compliances required by local agencies and states that pass these mandates on energy efficiency, green home in california is another one having to deal with it. builders are putting costs into homes, many areas are mandated to do that, and they can't even use the cost of those improvements as part of the appraisal. i would like to enter into the

record a letter from national association of home builders and the second from leading builders of america. >> without objection, so ordered. >> thank you. when you talk to different groups and individuals, you don't -- you don't hire an electrical contractor to bid concrete work. you don't hire an out-of-local appraiser. you're getting them in areas sometimes they don't have expertise and you can't just necessarily not knowing an area go to a computer and pull up an equivalent square footage home and say it equates to what we're trying to sell here. it doesn't. we found out the situation with hvcc when it first passed when proposed, my argument was perhaps new york is the most corrupt state in the nation but 49 others don't have those problems and we need to allow more local control. being able to take an appraisal and use it again as not

available during the old process we had where you required a lender to basically do the appraisal, that appraisal could not be taken to another lender do the work. so there's areas that we need to deal with that i don't think we have. we're in a recovering market and we need to do what we can to make sure the market has an opportunity to recover. and i think until we fix the appraisal process, that's not going to happen. we're not doing a service to people who sell their home, nor are we doing a service to people who buy the home and we're doing a complete disservice to the people who are trying to finance homes and sell homes. so i thank you for your generous time and i'm looking forward to the testimony. >> thank you. the gentleman from texas is recognized for one minute. >> thank you, madam chair. i sincerely thank you, madam chair, for hosting this hearing. this is an important hearing and i would like to associate myself, if i may say so, with mr. miller's comments. i did not hear them in their entirety so i won't associate myself with all of them, but

what i did hear, i associate myself with. i would also like to enter into the record a letter from the houston association of realtors. this letter is signed by their president. actually, he is the federal coordinator and also the state chair elect as well as mr. wayne strohman, who is the chair of the board for 2012. >> without objection. >> thank you. madam chair, i think mr. miller has made some salient points. we find ourselves with people making decisions that are not entirely familiar with the empirical evidence. i do believe that we have to revisit some of these issues so as to tweak a system that we have in place. my belief is that this is something that is salvageable, something that's doable. i think that we just have to find a way to work on this project and focus on the

question before us. i've had an opportunity to talk to realtors so i have some first-hand information about what's going on in my city. first-hand information. i've talked to many realtors about this concern. i have even gone so far as to talk to people who do the actual appraisals and they, too, have some concerns. so i thank you for hosting this hearing. i'm looking forward to hearing much of the evidence and i have to say, much of it because as you know, there are many things happening today without getting into all of what's going on, and i'm being pulled in many different directions, but i had to be here for this because of the importance associated with it. thank you again and i yield back the balance of my three seconds. >> thank you, mr. green. we're delighted to have our panelists here today. we are -- we are going to have two panels and so we will start with panel number one. we have mr. william b. shear, director of financial markets and community investment,

government accountability office. thank you for being here. mr. don rodgers, president, association of appraiser regulatory officials and then mr. james r. park, executive director, appraisal subcommittee federal financial institutions examination council. thank you so much for being here. without objection, your written statements will be made part of the record. you each will be recognized for five minutes summary of your testimony. we will start with mr. shear. you're recognized for five minutes. >> thank you. chairman biggart, ranking member gutierrez and members of the subcommittee -- >> i'm not sure if your mike is on. if it is, pull it a little bit closer. >> just pull closer. okay. can you hear me now? >> pull it a little closer. >> okay. >> it moves. >> okay. i'll get it. can you hear me now? okay. i'll raise my voice, too.

thank you. chairman biggart, ranking member gutierrez and members of the subcommittee, i'm pleased to be here today to discuss our work on real estate appraisal issues. my statement today is based on information from two reports we issued in response to mandates in the dodd-frank act. the first which we issued in july 2011 included an examination of real estate valuation methods, including appraisals as well as conflict of interest in appraiser selection policies. the second which we issued in january 2012 included an assessment of the appraisal -- >> mr. shear, it still is hard to hear you. looks like the wires are tight there. can you move it a little bit closer? >> i'll move this way. i'll move in this direction. let's try this. the second which was issued in 2012 included an assessment of the subcommittee's monitoring functions and certain challenges

faced by ase. in summary, we found that first, appraisals which provide an estimate of market value at a point in time are the most commonly used valuation method for first lien residential mortgage originations, while data on different approaches for conducting appraisals are limited, we found that the sales comparison approach is required by fannie mae, freddie mac and fha and is reportedly used in nearly all appraisals. we also found that the cost approach in which an estimate of value uses data on land value and what it would cost to replace or reproduce a residence is often used in conjunction with the sales comparison approach. second, conflict of interest policies have changed appraiser selection processes and the appraisal industry more broadly. specifically, the policies have led to increased use of appraisal management companies. in our july 2011 report, we concluded that setting minimum

standards that address key functions amcs perform on behalf of lenders would enhance oversight of appraisal services and provide greater assurance of the credibility and quality of the appraisals provided by amcs. therefore, we recommended that these regulators consider addressing several key areas, including criteria for selecting appraisers, as part of their joint rule making under the dodd-frank act to set minimum standards for states to apply and register amcs. now i will briefly discuss our evaluation of the appraisal subcommittee. it has been performing its monitoring rule under title 11. we found that several weaknesses which are generally associated with a lack of established policies and procedures and clear definitions have potentially limited ase's effectiveness. we recommended that ase clarify the criteria it uses to assess states' compliance with title 11 and develop specific policies and procedures f m