do need to figure out how to excess -- s.s. graduation. because according to its i am a double college dropout. we need to figure out how to count that metric. it is more about data as a liberation and putting it in a tool that the powers consumers to when you framed the argument like that, this suddenly becomes a lot clearer. we need a yelp for higher education. if i configure at what everyone thinks about a sushi restaurant in five square blocks, i should be able to figure out what consumers think about colleges within the city or state i live in. >> can you give us ideas of what data might be helpful to add to college navigator that can make this a better tool that is useful for veterans? >> degree completion. how many students started a program versus how many students and each program?

how many students entered this history department and let with a history degree? how many students got this mechanical degree and got this agreed? how long it took them? that is kind of available at college navigator, but it is not broken down by program. it is hard to synthesize. it is less about finding new data then finding out how to presented to consumers. that is the key. if you do not have something to present to consumers that they can read, that is simple and quantifiable, and the data you are collecting is useless. >> do you think said finding college navigator information is difficult? or is it just the the information is not useful? >> it is not only difficult, but highly inconsistent among its datasets. i talked about a liberal arts college in oakland, california that represented a pretty standard demographic distribution of students, but when you look a graduation rates, the only graduates for

asian females. i did there is a strong cultural bias in the curriculum, or the data they reported to the department of education was bad. you find this all over college navigator. even within the same data set, the data is inconsistent. as a consumer, it to fit -- pick out the core data -- how much does the degree cost, how much to go to debt, how many people finish the degree -- then you can pull that out and make it for consumers. that would provide a lot of clarity as to which schools are meeting mission and which are not. >> thank you. >> thank you, mr. chairman. i want to get all of you on the record. each one of the veterans service organizations to represent were signatories to this education bill of rights proposal that i referenced earlier, is that correct? am i correct also in that each of your organizations still stands by that original

endorsement of this type of a requirement to protect veterans and active duty and reserve members who are pursuing higher education? i want to follow up on your last point, mr. tarantino, because sometimes we talk about educational policy and it is frequently diverse from the real world. look myself. i started at iowa state university with a major in aerospace engineering, switched to civil engineering, switch with journalism, graduated with a degree in political science. you've argued that based on what you enter with, your degree target and your actual degree, that i was an abject failure. people would probably argue that for other reasons. the point is that i was able to take a degree and do something and find employment. to me, that is the definition of a successful college education. i'm less concerned about what we enter in and what we exit with

than what we -- are we getting students to the idea that they need for this educational dollars to give them the ability to have a college degree and an opportunity to earn income and take care of themselves and their families? to me, that is the focus of what we should be talking about. mr. gallucci, you were talking about what kind of data would be necessary. we talked about degrees conferred, but i am also interested -- interested in knowing what employment was obtained. the correlation between whether the decree resulted in a benefit out in the work force, or whether you could have somebody with a liberal arts degree who was counting cars on a highway. to me, that has impact on how we get the most bang for our buck for these dollars. one of these things that you mentioned, mr. tarantino, is proper implementation. you mentioned two questions. what are the outcomes consumers

need to make sound choices? do you have recommendations, or do any members of the panel, on what you feel should be part of those outcomes? >> i can say that there is a lot of them in legislation. i think that the reporting outcomes that are in specifically the bill in senate, as well as the murray bill, are a good list of sample metrics that people would need to use. a lot of this is already available, but it is not recorded in a digestible manner. if you go to college navigator, pick four like schools, four technical schools, liberal arts schools, religious schools -- to the comparison feature and look at them side-by-side. you'll find that all these data points that are found throughout the single school been severely reduced because not everybody is reporting the same thing. some schools are reporting data that is a little bit suspect and

is not quite match up. when you actually do the comparison, you are looking at a much more truncated version of college navigator that, frankly, does not give me any use as a consumer looking where to spend my dollars. as a veteran, i am going in. i am not in 18-year-old going into find myself. i found myself in shot at in iraq. i am going in there with an -- with a mission, and i am -- i want to find the girl identified with my dollars. >> you testified about this. there is a new reality out there for young men and women entering the armed forces. that is, they are pursuing higher education while they are serving their country. he did that yourself. if we do not have a system in place that allows the transparency, allows that consistency of transparency, we are depriving you of the opportunity to get a head start on the rest of your life because

we certainly have the technology available now to allow you to do that, but we need to make sure that we have the metrics right and we have the access points right, or we will be holding people back who want to make use of that time to move forward. >> absolutely, ranking member. i would tell you, when i left the military, i did not know what college navigator was. i had never heard of it, had never used it. in my current position, it is a wonderful research tool. it has no bearing for consumer education or is it helpful to student veterans as far as picking an academic institution or picking an academic program. i will tell you that there are certain things that need to be there, when we were talking about data points. ryan and i were speaking about this.

i know that some institutions would certainly would find themselves in precarious situations as graduates. transfer outlets -- a lot of them go to community colleges first. we get our feet wet and tend to try to track what we want to do in community college or an on- line institution and take a few credits. transfer rates might be helpful for people who do not go and complete a degree at one institution of higher learning. that is something specific on a data point that i think many of the institutions of higher learning could use. >> thank you. i yield back. >> we will recess. we have won 15-minute vote. then another -- two votes after that. it will be about 30 minutes.

[conversation] >> we will reconvene. i will ask the second panel to come forward. this group will include steve gunderson, the honorable steve gunderson, formerly a member of the house from wisconsin. he is now representing the

association of private sector colleges and universities. next we have jonathan walter, who is -- the president of frostburg state university and is representing the american association of state colleges. i want to give a special welcome to our next witness, ms. margaret from indiana in the -- university, who is representing the national association of veterans program administrators. welcome. it is always great to have it fellow hoosier testify, as i was telling the ranking member. at the hoosier bodies we like to talk about. i want to thank you for years of service in the united states air force. next we have mr. barmak nassarian, representing the association of college

registrars. judith is representing the national association of college officers. we will start with ms.flink. you are recognized for five minutes. >> mr. chairman, my name is judith flink. i served as director of financial services for the university of illinois. i worked at the university business office, and have been actively involved in higher education for 30 years. i'm testifying on behalf of the national association of college and university business officers, which represents chief financial officers at more than 2100 public and nonprofit colleges and universities. our mission is to promote sound administrative and financial management at institutions of higher learning. it's an honor to be here today. we share the president's goals

as outlined in his executive order. our institution is serving veterans, service members, -- we affirm that the students and all others deserve high-quality academic and support services that enable them to make informed decisions about their education. we support safeguards against deceptive recruiting practices. before elaborating on our specific concerns, i want to take the opportunity to sugge that the agency's task actively consult with institutions that represent them as they develop the necessary rules. with my positive experience on the advisory committee, and as part of negotiating for the department of education, i can attesto the success of such dialogue. i would therefore propose the creation of an official advisory

group with a defined membership structure and work to partnership were -- to create workable solutions as we implement new policy procedures. this will go a long way to create consensus and efficiency in colleges and universities. most importantly, in the -- among the service member's we serve. since the implementation of the post-9/11 g i bill, i of had the pleasure of producing -- participating in a work group that has tried to address issues involved in processing chapter 33 tuition benefits. these meetings always end with both sides walking away better informed about the -- how each of us operate. most of the time. regarding the executive order, we believe that most, but not all, of the president's principals align with existing department of education requirements. those principles, if implemented according to guidelines, will not inflict additional costs

among our member institutions. we do have serious concerns about some of the other provisions and their potential implications. our concerns are as follows. section two a requires students to be provided with a broad range of information on an individualized standard form. prospective students do not routinely identify themselves based on federal eligibility, making it different -- difficult to decide who should receive the form until they are enrolled and on campus. furthermore, the va has not develop procedures to communicate based on their benefits. section two f. man its policies -- outside of title four 8, the education department allows colleges and universities to set their own policies. if the new policy would be different, this would create

significant budgeting challenges for institutions of higher education. section 2g requires institutions to provide plans for all individuals using federal veterans' benefits. the intent of this provision is not altogether clear. if it is similar to the agreement recently reached, as well as on dod on its memorandum of understanding, the institutions will be able to comply. if not, further discussion will be necessary. section three requires them to -- veterans are often nontraditional students with goals that may differ from traditional students. progress should not be measured solely on graduation rates. let me reiterate the commitment of our membership to insure that our service members receive the education they deserve. however, implementation of requirements of the recent executive order requires further

clarification and discussions so that all parties can gain understanding and move towards consensus on a developing an efficient, sensible policy. thank you again for the opportunity to testify. >> mr. gunderson is recognized for five minutes. >> thank you very much. i'm delighted to return back and speak to you on this issue that is important. we're honored to say that more than 152,000 veterans have attended our schools since the enactment of the post-9/11 g i bill. we're proud of that and proud of them. secondly, we have engaged with the subcommittee to engage and develop protocols that best meet the academic needs of our veterans. as you know, and january 31, we joined with others, including some of our harshest critics, supporting two a very basic, critical ideals for insuring quality education -- increased

educational counseling and a protocol to ensure that legitimate complaints are resolved. we have been working with others on this committee in the senate to develop a bipartisan consensus around the desperate calls for protection of the veterans educational experience. suisun price and disappointed at the news of an impending educational -- executive order circumventing bicameral discussions. today posturing is to the impact of the proposed executive order. -- today's hearing is to assess the impact of the proposed executive order. you may remember from my earlier testimony before this committee that we must find new and better ways to calculate academic progress and then at graduation rates for all adult part-time students returning to school. if we can identify such metrics, we do everybody a favor, starting with veterans. today, only 18% of all post

secondary students are captured by calculations. the secondary concern is the complaint process, that it be one that appropriately serve and protect the veteran and the school. we need to know where and how many legitimate complaints really exist. therefore, the letter yesterday from chairman miller and the senator articulates the importance of data collection. this process must be fair, and it should be focused on seeking resolution. we want every legitimate complaints to be heard. we do not want this to become a vehicle for those who have a political agenda that is very different from students. on both issues, every -- we requested that all parties would be a part of a constructive, collaborative process to reach agreement before the executive order went into effect. we are concerned, because 1/3 of

the way towards the deadline, as of now, no institution or organization had been invited for such discussions. moving forward infer -- in pursuit of appropriate protections, we ask that enforcement policy be put under consideration. this encourages federal and state authorities including, but not limited to the department of education, state licensing authorities, program-specific accreditation, the securities and exchange commission, the ftc, the veterans administration's authority under the 9/11 gi bill, the department of defense, and others. we ask the the sort -- current authority be used to go after those engaged in misconduct before we invite an entire sector. we should note that our sector is currently taking the misrepresentation issue one step further.

our board has suggested that a student task force developed guidelines. we're not creating a self- regulatory organization to deal additionally with these concerns -- we are now creating a self- regulatory organization to deal with these concerns. long before this hearing, i had a commitment to visit a college in virginia beach. the school is important to this conversation, because no less than 30% of its student body are veterans. the primary reasons veterans choose the school, and spend literally half an hour visiting with a clef -- a cluster of veterans, is because they deliver academics and with it moves the veteran from the school to the work place as quickly as possible. during my visit, veterans told me that the number one complaint is not about the school. it was about the va's problems come -- processing their payments in a timely and proper manner. i have submitted to the

committee, but i want to lift up for your attention the standards or best -- best practices for veterans' education. i want you to see what these individual schools are doing but -- on their own to make sure that they engage in the best education practices and the best interest of the veterans. this is the way that we focus the outcome, to make sure that the veteran has a positive experience that moves them from the field of battle into the education and into the workplace as soon as possible. thank you very much. >> thank you. ms. bechdel, you are recognized for five minutes. >> thank you for this opportunity to testify on behalf of the national associations of veterans program administers -- administrators. my name is margaret beachtold, and i have served as a director

of veterans support services at indiana university. i retired from the air force after 20 years of service. our membership is approximately 400 educational institutions from all sectors, and we advocate for what we believe are the best interest of student veterans at our institutions. our expertise lies in the administrations of veterans programs at colleges and universities. our leadership is comprised of non-paid staff members who voluntarily serve the staff members -- veterans on our campuses. we cannot police our membership regarding issues raised by this order. our mission is to provide development, disseminate best practices for veterans support, and advocate on behalf of our institutions. we believe strongly that all educational institutions should be forthright and open with all students, particularly with regard to veterans and service members who have unique needs and circumstances. like so many, we have been

dismayed at reports of unscrupulous organizations treatment of unsuspecting veterans. we strongly condemn any abuses to which veterans may have been subjected at the hands of these institutions. what we believe there are no debt costs and burdens in implementing this order, we cannot object to any initiative that seeks to ensure that veterans are appropriately recruited, advice, and support well in school. we're pleased that the president has taken such a direct interest in the educational needs of our veterans. we recognize that the requirement in this educational order to provide personalized financial adviser will be exceptionally johnson to implement. this device can only be provided if the institution has access to all eligible -- eligibility information. at present, eligibility information is generally not provided directly to institutions, and we must rely on student veterans to furnish us with such information. we have been a long advocate of direct access to student

information from the va. we will continue to do so. the timing of institutional and agency business practices will make implementation of this requirement difficult. students cannot even apply for certain federal benefits until after they have already enrolled in class. schools cannot effectively predict in advance how much funding might be provided by military tuition assistance or even veterans affairs education benefits prior to enrollment, application, and benefit authorization. furthermore, many benefits are based on actual and roman models, actual institutional charges, and financial awards. many awards must be adjusted whenever a student receives other financial awards. the gi bill is a perfect example of a program that pays a net cost and must be adjusted when other awards are received. we support efforts to better inform students about their benefits, but we recognize the challenges involved in implementing the services required in this order. we hope these policies are

developed and that we might contribute to this conversation about how best to provide the information needed. regarding student outcomes, all schools are interested in assessing the success of their students. it will be critical to define success appropriately for each educational environment, and to develop data collection methods that are robust, accurate, and meaningful. we hope and respect that educational institutions will be involved in developing these desired outcomes and metrics. we support efforts to improve information resources for prospective students, absolutely. we also encourage continued efforts to provide schools access to data about individual students, benefits, and eligibility, so we can accomplish the tasks required of us. when fully support efforts to ensure that veterans are appropriately recruited, advise, and support in school. requiring disclosure by schools should not be a substitute for oversight, however.

the agencies are in need of further oversight resources to enforce the provisions of this executive order, as well as currently existing regulations. the ba needs assistance with compliance tasks now the post- 9/11 gi bill has become so complex. this is become problematic, and leaves nobody to fulfill the historic role of providing supervision to institutions on broader issues. there are varying roles within the oversight arena. tasks should be distributed to the agency's best suited and situated. mr. chairman, this concludes our statement. as a veteran and on behalf of our organization, i would like to thank you and members of the subcommittee for your leadership on issues of critical importance to america's veterans. >> you are recognized for five minutes. >> that you, mr. chairman, mr. ranking member, distinguished members of the committee. my name is barmak nassirian.

of theociate director american association of admissions officers, which we have mercifully abbreviated to acro. we're delighted to bring is a bit in this discussion. i have submitted a written testimony for the record, but i would like to take this opportunity to in plain language race four specific issues for the subcommittee's attention. i shall do so because of the shortness of time, but we can certainly talk about the underlying reasons. one -- the for-profit sector in higher education has a significant and pervasive problem of waste, fraud, and abuse. this is not anything against the profit motive. we endorse the profit motive. it was presumably built by somebody who was totally doing it for profit, and did a good job, but when you compare how

you put up buildings to this company with billing codes and inspections and heavy penalties if somebody undersize is the beams -- we understand that they are framed with proper oversight. essam the u.s. and almost a quarter-century looking at this stuff, we have a lot of procedural and burdensome regulations. we do not have substantive safeguards to insure that an entity purporting to be a college or university is actually doing any teaching. that is equivalent to buildings falling on people's heads on a daily basis. the basic reason here is simple -- when you put a building up or create a college, there are obvious performance stat -- tests. education is a lifetime experience of service, dance --

the can give all kinds of promises to things people only learned 20 years later. an issue that has been raised, this subcommittee should pay particular attention to that. what it does is that it makes every dollar of the v.a. benefits worth nine extra dollars of title 4 money. therefore, veterans today are walking around today with big targets on their backs, because there dollars are the means by which these entities that have almost no other ability -- what are they selling? nobody else is willing to reach into their pocket and did their hard earned cash. veterans earned their benefits, but these are federal benefits. these benefits are being used to leverage other federal benefits. the notion of for-profit, profit-making -- it is a funny

type of capitalism. capitalism consisting of 100 cents on the dollar coming from the feds. there is something wrong there. my colleagues from the veterans service organizations talked about the glut of data in the navigator. -- i cannot -- you have to know that is the reason -- unless you want to get a ph.d. in mechanical engineering, we consult "consumer reports" to consult what car is right for us. that is very tough to do with education. disclosure is not a substitute for gate keeping. when i go to a supermarket, i do not want to have toxic food and on the shelves the phd

dissertation underneath talking about whether or not it is edible. we should take toxic programs off the table so that veterans are not victimized. finally, this is an imperfect substitute for what only you can do. you are the folks who write these laws. you have done so with leadership and the best of intentions. if this committee takes a leadership -- look at the situation and addresses gate keeping with a -- we can simplify a lot of things we have to do. i appreciate the opportunity and look forward to any questions. fenty. >> thank you. dr. gibralter. >> distinguished members of the subcommittee, i am the president of frostburg state university in maryland. we are a rural university in western maryland, part of the university system of maryland's 11 campuses.

i'm testifying on behalf of the american association of state colleges and universities, which represents more than 400 public institutions and university systems. thank you for holding this hearing. i would also encourage members to the my written statement for further details and explanation of this testimony. frostburg serves the majority of veterans and active military connected to our region's national guard and reserve units. the number of veterans we serve very significantly from year to year. our overall in rahman right now is about 5500 students -- enrollment is 55 students. we're serving 100 to veterans. our growing on-line programs are accredited -- are mba and our bachelor of science in nursing are proving particularly popular with veterans, since these programs are designed to be very flexible.

ascu, which serves as the administrative agency, supports the executive order. our nation's military personnel should be able to obtain quality information about institution's and the programs. our member institutions, including my own campus, value the perspective and experience that service members and veterans and to our institutions. as such, we take our commitment to providing quality educational experience very seriously. as the conflict in iraq and afghanistan wind down, and over 2 million troops are withdrawn from those areas, more and more veterans will be arriving on college campuses to use the educational benefits that they have earned serving our country. in addition, our active duty military are combining services to the country with higher education. the text of the executive order

as written raises a number of concerns for our institutions regarding implementation. those of us on the ground are also most aware of the issues of the individuals that we work with. for example, as there is no requirement that students identify themselves as veterans, some choose not to do so. that means that they may be missing out on services that we can and should provide. the executive order requires the secretary is to develop a comprehensive strategy for service members and outcome measures that are comparable across paramilitary and veterans educational benefits program. while we appreciate the statement that "to the extent practicable, the student at the measure should rely on existing administrative data to minimize the reporting burden on institutions participating in these benefit programs, " there is considerably more burden to

finding available data than meets the eye. the issues of data definition and collection raised by the executive order's requirement to develop national outcome measures become even more significant for institutions. first, the federal government does not collect veterans and military-specific data for institutions. second, institutions and states vary in ways of defining military students based on what is available to them. given the complexity of data identification and collection, higher education institutions will inevitably be asked for data that may or may not be possible to obtain. this leads to another concern, that of reporting burden and associated cost. in 2010, the government accountability office completed an analysis of the burden placed on institutions to comply with expanded mandatory

reporting. among other issues, they found that schools reported burdens ranging from differences to the 19 to 41 hours the estimated. they -- total estimated salaries were up over $6 million. the call for data would be an expansion of current reporting requirements, and require institutions to incur considerable back office costs. in the key concern that was mentioned was the complaint system outlined in the executive order that would create centralized complaint system for students receiving federal military and veterans educational bennett -- benefits. instituting a centralized complaint system without first establishing whether an individual has already attempted to resolve their complaints with the university or college's veterans affairs office

represents a concern. too often, complaints raced to the highest level they better be resolved to the -- on the campus. we strongly suggest that higher education stakeholders have significant input into the conceptualization of this centralized plant system. in closing, frostburg state university and other institutions are eager to continue meeting the needs of our military members and veterans, as well as their families. our experience is that these recurring -- returning military become solid students and campus leaders. we support efforts to ensure that service members and veterans can make the best informed educational choices. thank you for the opportunity to speak about this legislation. >> thank you. i will begin the questions. beachtold.with ms. if you can describe an average

student veteran at your institution. what is their experience like in transitioning into college life compared to an average freshman coming into school? >> mr. chairman, i would be hard pressed to describe an average veteran. everyone of them is so unique in their needs and how this needs have impacted them, what that means for them has been a transition into civilian life. we think of them across an entire spectrum of experiences. we find that as they come to school they have agreed to focus on legislation. they have a different value of education and perhaps the average freshman might have. they tend to be very interested in their success.

they tend to be fairly reticent. they do not necessarily -- they are not necessarily looked on as a positive value to search for help. we work hard to provide that work and not make it seem that anybody is concealing a need they are unaware of. it runs the full gamut. some sign up and are good to go , otters spend most of three is a week in the office because they have a need to reconnect with veterans and support systems because they feel lost. i'm afraid that is not a very good answer other than to say that there is not an average one out there. >> that is probably the case for every individual.

they're looking for something different in one way or another. mr. gunderson. given all the variables in student demographics -- the availability of jobs, is there a variability of data, such as salaries, to judge the quality of education? could you discuss the variables the you see, and also follow up. >> i put up some notes on things that would be very helpful to the typical veteran trying to make a decision on college navigator. one of this displacement -- employment.

>> still not working? --be try somebody else's >> 1 secondly, it would be setting up graduates for so that they would be able to look at -- there are so many problems, like -- third, take a look at, for example, as i mentioned to you earlier, there are so many, one of the reasons

[indistringuishable] let's look at that issue. veterans working part-time -- >> college navigator is -- how much more will be executive order require just a little bit more -- to what extent will this order create additional -- is that information viable for students that are looking to apply to your school? >> well, there certainly is an

enormous amount of data. if you look at the voluntary system of accountability, you can ask students about participating -- you find there is a lot of useful information for everyone, including veterans. the issue that i want to discuss today is in part about that information, but it's also about the issue of promoting that. making that available to them. not necessarily -- there is. not necessarily have the present that to governments. that is an important issue. >> thank you. >> dr. gibralter, let me start

with you. you identify yourself as working at a rural university. rural america has a disproportionate contribution to the defense of this country. so when we have young men and women returning, looking for educational opportunities, we have a moral obligation to reward that sacrifice by giving them an educational experience that moves them on the way to fulfilling their career and educational goals. i do not think you disagree with that. >> i absolutely agree. but one of your statements confused me, that there is no requirement for students to identify themselves as veterans. and yet we are talking about funding from the g.i. bill and military tuition assistance, so how can colleges and universities not identify that that is a veteran when they are receiving benefits? >> you are talking about two

different issues. i think that where we struggle is that there are students on our university campuses to do not ever tell us or indicate in any way that they are veterans. they do not want themselves to be none. that is what i'm talking about. i'm not talking about those students who are there and also receiving benefits. they -- if they are receiving benefits, we know about it. >> you also may -- resupply i alluded to in my remarks. if you ask 100% of the population if there is too much government red tape, you'll get 100% yes. to the average person, the average business, that is a twofold problem. what is the conduct being regulated and whether it should be regulated in the first place. the other is a fed regulation or documents that communicate with people about their expected

behavior are written in in comprehensible gobbledygook so that people waste their time trying to understand what is expected of them. i know that you are all intelligent, highly educated people. but if you are telling us that you are dealing with federal regulations that are incomprehensible gobbledygook to you, we have a big problem. that is why i introducedhe plain language in government regulations bill to get to the root cause of what we are talking about. you mentioned that, thankfully, in your opening comments. but this gets to the greater problem. when you have companies like turbo tax that can greatly simplify the time it takes to take the -- the time it takes the average veteran to do their college return, and if you give them the same tax forms and a booklet that is 150 pages long the tells them how to do the same thing, we have a lot to learn on how we process

information and get you the data you need in the least inconvenient format possible. that is what frustrates me. so how do we get there? >> i think that these conversations need to continue. we need to be involved in and continue to be involved in conversation. i would use as a reference the accountability that at least initially colleges and universities did not have to participate in, but many chose to. if you really look at that, you will see, at least from my view, a much more reasonable and understandable interface that students can get information about acceptance rates, graduation rates, percentage of students to get financial aid -- any number of data points about colleges and universities. >> mr. gunderson, welcome home. i would like to remind you that i was used to be part of

wisconsin territory, but we beat you into the united states by two years. i will not get into that, but it was not clear from your testimony with your concerns are whether -- on behalf of your member institutions, you are opposed to the executive order in itself, or you are opposed to the implementation of the executive order? >> request and. i am not sure we are opposed. i was disappointed that an executive order would preempt bipartisan effort to reach consensus. second, what i lifted up was that the executive order, it is developed with all of you working out the kinks in the issue, this could be good. but we have got to do this -- deal with two big issues -- a complete process and calculation of the information about academic achievement in ways that work for veterans and work

for higher education. if we do that together, this is a win-win for everybody. if we do not, it is a disaster for everybody -- the veterans, schools, you are trying to get this information. the verdict on whether it is good or bad is yet to be determined, but we only have 60 days left until that window is to be concluded. this goes into effect. like i said, i talked to my colleagues on monday. we were promised by the white house that we would be asked. they said, we have not been asked, and we are the ones who volunteered to convene everybody. >> one of the things that all of us would tell you is that an executive order last only as long as the person who signs it is in office. as a practical matter. the chairman and i and other members of this subcommittee are actively engaged, because we know that, ultimately, there has

to be a legislative solution that takes into account the best interest of the veterans, the people receiving these funds, and the u.s. tax payers and the institutions to have to administer them. we look forward to working with you and we encourage you to continue to engage with all of the veteran service organizations to testify today, and with that i yield back. >> thank you. mr. ross. >> thank you, mr. chairman. thank all of you for your testimony and your expertise in helping us understand this. i am very proud of the work we did on the post-9/11 g i bill that was sorely needed. it will open up and has opened up countless opportunities. it comes back again -- we have a couple of major requirements in this committee. making sure that we provide all of the current benefits that are worriers so rightly deserve while at the same time making sure that our taxpayers' dollars get them there. i see a similar mission.

you are trying to make opportunities available. i want to make very clear that, as we do things, we are making sure that we are not contracting the opportunities that the gi bill offers. that we are not making it more difficult for the bulk of our workers to get their benefits, because of a few bad actors that are in this. would you characterize this as a few bad actors, or is this a systemic problem that really, truly did need an executive order. does anybody want to try that? >> the politically correct thing to say is that it is a few bad actors. the data would argue otherwise. you are looking at 11% of all enrollments consuming progress dollars, accounting for 1/2 of all student loan defaults, capturing 50% of the dod tuition

assistance funding, 37% of all the benefits. the pool of anecdotes is not that. the data speak to a systemic issue. >> can i respond to that, mr. chairman? >> sure. >> i appreciate that. i respect everybody pause right to disagree with the concept of private sector education. i think that we ought to understand exactly who the private sector colleges served in america today, and what would happen if they did not exist. this tends to be career-oriented education. the reality is that today, 94% of students that attended private-sector colleges are eligible for title four student financial aid assistance. we ought to be commanding the schools for serving students who otherwise would not have access to post-secondary education, skills, jobs, incomes, and middle-class families are able to obtain through that.

when i hit the ball to criticize us because we serve a disproportionate number of -- when i hear people who criticize us because we serve a disproportionate number of veterans, i say that we ought to commend the schools for the design and delivery of academic programs that serve the needs of today's veterans. do not blame the schools. congratulate them in that regard. >> mr. gunderson, i do feel that this was a chain saw and said estoppel that should have been used on this? you had something interested -- a chain saw and said estoppel that should have been used on this? you talk about how the va should join in agreement with the ftc. have they done this things? >> no. that is my frustration. i spent 16 years in the congress. i'm a big fan of pratt -- public-sector universities. there is so much out there today in terms of regulatory authority

to go after the bad conduct. all we ask is to use your present authority and go after that school. you'll never hear me or my association defending one bad apple engaged in misconduct for veterans or any other students. but let's not indict all of higher education or even just the private sector colleges and universities for the misconduct of one school. >> several of the rest of you hit on this. i do not say this facetiously in any way. i.n.d. staunchest supporter of the va, but i will also be their harshest critic. one of the prescriptions for a better way of doing this is communication and getting data from the va. good luck with that. i say that not facetiously. they do a lot. there are a lot of things that maybe we put on them with privacy data and concerns about

that. if we are going -- i could not agree with you more. i think that we need to do better about how we get that data. how do we -- how do we engage be a better? what are some of our solutions on this? had we did that communication working better? this is a sticking point for us across a lot of issues. you have anything? >> i have been involved in the committee that has had conversations with the va. one thing that is continually brought up is that, if we could simply have a release that a veteran would sign that would allow people and institutions to talk to them. it is a pretty simple concept. we have people and institutions that can talk to them, but they are usually in margaret's wrote. it is not people in my area, where we do civilian and that kind of processing. we will call up and tried to the questions for the veteran, and we are immediately shut down.

we are working -- trying to get a simple form that veterans can sign. we can fax it to them, create an online form. >> what is the feedback you got from them on that? i can tell you, i think this is a fundamental reform, both in the processing of benefits claims and others. my service officers to not have the ability of what you are asking for. these are licensed and bonded folks who say that we are going to protect the status. they cannot get it. have they been responsive to you on the potential? >> in the conversations we have had, we have -- they have said they need to have conversations internally. we have been asking for well over 24 months. that is an example of how we could help the veterans of the process. >> we could go down this line. i have been asking for six years. mr. gunderson might say he has an asking for 16 years. i am troubled by this. the predatory nature -- nature

of some of these folks, i know it appalls all of you. is a disservice to our veterans and it is despicable. but i understand where you are coming from. i'm troubled by the idea of an executive order without the input -- the last time many of you were here testifying, there was a good-faith effort to include you. i do not think we will get at the heart of this if we do not include everybody in this decision-making to is processing the data going in. i think that he is right. we cannot ignore the data that shows this. we need to hammer down on this. there's a lot of money here. how we get down to the point of communication is still troubling. i went over my time. i yield back to the chairman. >> that is not a problem. you had a comment you wanted to make. >> i wanted to respond a little bit more to the question. it has been battling to school certifying officials, for example, that we can get full eligibility and payment information for almost every

chapter except the post-9/11 gi bill. that has always been available to the interface we used to record information to the va. it appears that the combination of misplaced privacy concerns, since we are entitled to that information, and limitations on i.t. systems that may have other priorities right now -- pretty soon this is to become a priority, or will not be able to continue to do many of the services that we do on our campuses. thank you. >> i have a couple of other questions. mr. gunderson, you mentioned this university. it sounds as though they are having a lot of success. is this something they are doing differently that we should be paying attention to? also, everyone of us would agree that there are bad apples out there. do we have the tools to deal with those now, currently in

place? >> one of these things that i enjoy every day is seeing a news release going after one of our schools, not because i enjoy the they are going after us, but because it confirms our point. the tools are already there to go after schools make -- engaged in misconduct. what they have done, which is going above and beyond the federal and state minimums to establish a voluntary set of best practices. a if they were sitting here today rather than steve gunderson, what they would tell you is that, you know what, when we are engaged in on-site education of veterans, all we need to do is screw up once and that commander will never again direct any of his soldiers to

our school. >> so when a school is being disciplined, what practices are they performing that require them to discipline or investigate? >> the biggest allegation against our sector over the last four years has been misrepresentation. as it tried to show in my certain -- in my written testimony and much more quickly in my oral testimony, there is between accrediting standards and the va and the department of education, as well as the ftc, all of them prohibit misrepresentation and advertising or sales. there is a lot of different avenues we can go after that particular enforcement. that is number one. number two, we support counseling because i think that the veterans i have talked to at

the schools would tell you that if they have a complaint, is that they do not know the right questions to ask. at the beginning. they will tell you, as they have told me personally, what i thought it would cost to get a degree and what it really cost was different. there was an annual increase in tuition costs. or because the original tuition cost only covered online books. if you want to buy a hard copy, -- it is questions like that, where the counseling become such a key part of a clipping the veteran to know what they are pursuing, even under transferability. we all know that we are nationally accredited, we probably do not have a good shot at getting transferability to regional accreditation. it can be in the paper work. if it is not lifted up to that veteran, i am not sure if i would have had any idea to ask about national versus regional

verses program-specific accreditation and what its impact would be. those of the types of things that we all want. thank you. >> i wanted to follow up on the comments he made in direct response to what we have been talking about. you talk about the challenge of eliminating waste, fraud, and abuse in this program areas. and yet the fact that there were burdensome regulations that were intended to attack that very problem and yet were not having the desired results -- of providing accountability and due process and enforcement that changes behavior. what can we do to change that system? >> greater focus on outcomes. i think that a greater focus on

regulatory government is right on the money. the ordinary citizens understand intuitively that service members have provided to this nation -- the question should not be accreditation in a stack of papers that a skillful law firm can fill out. the simple question is, did the veteran leave this place better off or worse off? i think that this committee can make tremendous strides focusing on that bottom-line question. are these billions of dollars that are being spent actually improving the lot of veterans, or are they actually being left worse off despite the expenditure of funds and the massive amounts of paperwork that they are dealing with because we have a problem.

we want to be circuitous. with regards to the executive order, it is very much a matter of taking the right steps. it requires a test of good outcomes and a test for this country. >> we talk a lot about how your transition from the military to a civilian work force or education environment. a lot of the veterans that we talked about go through those programs and talk about what we commonly refer to as death by power point. these are men and women who have given so much and sacrifice so much and are so burdened with that transition that they want to get rid behind them and move on with their lives.

you were there at a joint hearing with the senate on this. i tried to think of this the way somebody in iowa would, sitting around their kitchen table. one of the witnesses testifying there i said, if somebody has access to a website or if facebook page they can access -- we put that on a refrigerator magnet. that is what we do if we want to know where to find something. senator rockefeller looked at me. he seemed very intrigued by that concept. i do not know that he has a lot of refrigerator magnets, but it is one of the simple things that really can not have far-ranging benefits to people who are so burdened with information that they do not know where to start to get the answers to the questions that they have. i think sometimes we have well-

meaning people who want to take into account every contingency i want to thank all of you and thank the gentleman for holding this hearing. >> thank you to all of you. your information has been helpful and viable. we'll excuse to all and bring up the last and final panel. with us today, representing the national association of state agencies, is mr. chad chatz,. i would like to remind everybody that these are crucial for approving gi bill benefits. we have a retired major general , the director of education

services. we welcome to the subcommittee and thank you for your dedicated service. we recognize you for five minister testimony.

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>> all in tribute to the failure to recognize positive pricing and i use in competitive areas. -- did not support the dodd frank language. it has aggravated the problem. amc's should be regulated. the reporting format, lacking

market information, discrepancies in market definition, the funding structure and the declining number of appraisers. nar is the only group able to speak with authority on the appraisal. appraisals are certainly the gold standard from mortgage origination. through our subsidiary and our evaluation committee, we're able to provide credible information for determining home values.

nar is dedicated to the idea that home ownership matters. our efforts are directed at ensuring the next generation. we'll be working with the committee on this issue. >> thank you. you're recognized for five minutes. >> thank you. i'm delighted to be here again. good to see you. i believe you and your staff hit a home run here. brazil tremendous amount of experience. so many of us have known each other in this business for so long. dallas say how long just to protect the innocent here. despite some of our disagreements, i must say,

personally, but i love appraisers. they are a -- they propose a tremendous amount of professionalism and are a delight to work with. my members are appraisers as well. without good appraisers, there would be no appraisal companies. allow me to summarize my testimony. first, regarding management operations, provide necessary services to appraisers and consumers. we are working proactively to implement the regulatory requirements. third, we encourage the consumer financial protection bureau from

the federal reserve board for fees. to my first point, my members provided advancements in technology with benefits, mortgage, originators, and ultimately, consumers. amc typically create the completions of report. amc act as a place for consumers nationwide. amc works to match assignments with qualified appraisers.

it has 15 years of experience and travels less than 13 miles on any given assignment. the quality control functions on behalf of the appraiser and lender to insure fine quality. it is part of the selection criteria for the appraisers office. that location is what they call geocoded. in addition, appraisals are reviewed by quality assurance teams who specialize in park development and review. contrary to what some have suggested, they directly benefit by working with an amc to make sure that no attempt is made.

they provide information to appraisers such as quality control, technical support, and billing processes. with low-rate of lock in some and time sensitive negotiations, the anc helps consumers with delivery. to my second point, the amc's new requirements under the dodd frank begin the process of enacting laws for registration. we've been actively involved in the states and have lost independence in the appraisal process. we believe is important for work force consistency to ensure that nc's can effectively act on a national basis.

finally, daughter of frank and requires lenders and their agents, nc's, -- and got frank -- dodd frank requires lenders and their agents. appraisal service agents are not one size fits all. fees reflect market realities. there will remain competitive and unfair. we believe they should maintain the critical criteria. it would result in additional confusion and lead to setting a fee which may not reflect market industry conditions.

by and large, states have been diligent in requiring registration for a set fee. they have built-in protections. however, because mortgage lending is national in scope, we support reasonable and appropriate laws to improve the industry as a whole. we also believe this to provide guidance for the industry. thank you for the opportunity to testify. look forward to your questions. >> thank you. you're recognized for five minutes. >> to a very much. of the -- thank you very much. dell good morning.

i am an appraiser. i am currently the president of my firm in northern california. today i am here to testify on behalf of the american society of appraisers and the national associations of the appraisers. i'm speaking on their behalf today. the appraisal regulatory structure is a dramatic improvement over what was in place prior to the savings and loacn debacle. prior to that you could get a clipboard and call yourself an appraiser. it became like the wild west where people thought they could be an appraiser at any time. thanks to the implementation of title 11, we found that there are rules and regulations that

needed to be followed. it doesn't mean we always wanted to follow rules, but we had to. it is very important. the role of the appraiser had to recognize that the appraisal industry had changed over the years. as a result of that, we needed something that was a foundation force -- a basis. now we have a standard of accountability. the basis was title 11 and now with the augmentation of the dodd frank act. we also believe that the appraisal foundation has been a positive factor in the growth of the appraisal profession. currently 65% of practicing appraisers are not a part of an organization for guidance. the appraisal foundation has been an important element.

the presence of an appraiser has been around since the 1930's. they rely on some source of a foundation that requires the use and implementation of the appraisal foundation guidance. it is important to note that the foundation decisions involving standard qualifications, best practices, and qualifications are made in a transparent manner and are open for comment, review, and recommendation improving the current system is currently in process with the proposed implementation of the dodd frank act. the current regulatory system is adequate. however, we recognize, like anything that is being developed, one must tweet is. one must go in and improve it.

we agree with the report regarding the need of greater effectiveness as of the appraisal subcommittee. however, we also believe that the subcommittee is showing improvements. we have several issues facing appraisers. first and foremost, as an appraiser, customary and reasonable fees. we do not disagree that having an amc is appropriate. the problem is that the experienced appraisers to not prefer to work for the amc because the fees are so low. fees four appraisers are approximately $450. they keep between 30% and 40%.

the appraiser has a lower fee. in today's business practice having a lower fee when your expenses are the same or increasing makes it very difficult to stay in business. newer and less experienced appraisers are choosing to work with amc which is not a good thing for the consumers because they may not be getting the most qualified appraiser. i hear this every day from homeowners to contact me and say that this person came from fresno and they are praising a property in san francisco. that is 400 miles and a long distance. completely different markets. the daughter of frank reform has not been fully implemented. we anticipate that the

improvement to the process will be accelerated immensely. the good-faith estimate does not disclose that the fee this two pieces. the remainder goes to the appraiser. the homeowner, the property owner, should really know which part those to which. when we go up there, we say that we pay to $300 for this appraisal period -- appraisal. the homeowner wonders what is going on with the process. when other factor has been a bonus retention for appraisers. is been eliminating and reducing the minimus. properties with a value less than to under $50,000 for

residential properties and $1 million for commercial properties do not necessarily need the typical appraisal and other types of evaluation products may be used. we feel that compromises the system and the homeowner, the consumer of properties worth of less than $250,000. finally, we have other issues with day to day operations. we do not need your subcommittee to worry about our issues. we will try to endeavor to are -- to participate and try to develop processes that work and help the committee and each other improve our system so that we have professional appraisers for every consumer. thank you for allowing me to represent my organization.

>> thank you. you're recognized for five minutes. >> thank you. in the president of the appraisal institute. i represent 23,000 professionals and more than half of all professionally designated appraises in the united states. in 2007, chief justice roberts stated that valuation is not a matter of mathematics, or rather the calculation of true market value. most appraisers estimate market value by employing not one methodology, but an accommodation. the appraiser uses it to drive reconsiders to be an accurate estimate.

true are these words. appraisal methods and techniques require budget. for instance, in valuating a parcel, appraisers are trained to decide replacement costs. they are dependent on the marketplace. established under a false premise does not exist. a move that flies in the face of the supreme court case.

they're trying to predict take a methodology. documents are voluntary. for more, the appraisal foundation references them in the latest documents for the uniform standards essentially codifying them into state law. we believe that congress should exercise oversight by satellite abusing authority. the appraisal process is not aided by more rules. furthermore, the appraiser institute supports realigning the structure with those of other industries in the sector. as a model, we believe congress could turn to the market

licensing system. this is not a self-regulatory organization. we see several benefits to a realignment. congress authorizes body to regulate within the structure. so too can it be for appraisers and regulators. congress should remain engaged for management companies, including the payment of reasonable fees and consumer disclosure of fees paid to a company. we often hear from real-estate agents, homebuilders, and others that appraisers are killing deals and holding back economic

recovery. these accusations are unfair noted. apprises to not make the market. the report the market. -- the appraisers do not make the market. at the report of the market. -- they are reports that the market. not quality of service or geographic market competency. the dumbing down of appraisals cannot continue. we ask congress for its continued oversight. lastly, we know nothing is perfect. the regulatory system that appraisers operate is 20 years old. we believe it is time for a fresh look. appraises to 97 arbor sherry rules.

data should be at the forefront of the appraisal process. it is essential to maintaining its integrity. we ask for your oversight of these matters. i thank you for the opportunity to be here and i would be glad to answer your questions. >> thank you. now proceed to questions from the members of congress. i would start with myself and yield myself to 5 minutes. the appraisal subcommittee is in the process of developing a new standard to rule as required by the daughter of frank act. it was enacted in 2010, almost two years ago. t believe the appraisal subcommittee that has been

affected -- do you believe that it has been unaffected by the daughter of frank -- dodd frank act? >> we are anxious as birdie appraise a subcommittee's move ahead very quickly in this space, particularly with regard to a monitoring the activities of the other provincial regulators. we have raised issues such as flopping and the quality of appraisal compensation. despite the lessons that should have been learned in this financial crisis, it appears to us that working with consumers across the country that regulators are not acting quickly enough. the amc will be providing a critical role in that space.

>> thank you. i have other questions. >> i believe they have four of the seven members not serving. they are higher level policy people. you have a chair who was an appraiser. the difference between now and then is night and day. >> thank you. >> the national association of realtors does not have a specific policy related to your question. however, unlike a lot of federal other -- other federal agencies, the opera without preparations. they do not have the flexibility or the funds to move in the same with a lot of federal agencies do. i believe that has to be taken into account. the folks that are funding the operation are actual license and a certified appraisers.

that number of folks is a diminishing. >> thank you. we would like to see them move a little quicker. states are already proceeding with registration and other standard development. i believe they could be helpful with moving along with their agenda. >> thank you. >> i think your mind again. >> i'm sorry. there is a pressing need for a speedy implementation of rulemaking by many of the dodd frank implementations that have yet to be addressed. about dis involve important issues. the establishment of an

appraisal complaint hot line and the consideration of whether the banking industry's existing or if it is adequate. we look forward to this. >> thank you. >> one of the biggest problems we see is that the current structure assumes that the states are not capable of administering this entire process of certification and the entire process of overview. we would like to see that changed. it is one of the reasons we make the suggestion that a good lick be taken at the way our whole entire system is set up. >> thank you. i have two questions there just a yes or no answer. willis our review. is the appraisal subcommittee affected? >> in my opinion, no. >> is is and it will get better.

>> yes. >> needs improvement. >> another question, yes or no. should congress consider a complete overhaul and approved for consumers and businesses alike? >> i think there is a serious need to look at -- yes or no? >> there's a need to look at it. >> no. >> we should continue to look at it. yes. >> improve the existing system. >> yes. >> my time is expired. mr. sherman is recognize. >> thank you.

they have created a new uniform appraisal database. it is used on all appraisals. how is it all working out? >> to wear for the question. fortunately, because of the work i do, i've not had to complete one of those reports. i have heard from dozens of not hundreds of appraisers. >> could you close to the microphone? >> i have heard from dozens if not hundreds of appraisers for their experience. the method of reporting was not implemented to enhance the quality of an appraisal report. what it does enhance is that -- data gathering. i believe that this makes the

appraisal report more confusing and less useful to the consumer. granted, the consumer is not an intended user. however, the wording in the form clearly anticipates that the borrower will be placing some credence in that period of the report, according to federal law, is required to be provided to the borrower. that does not improve the usefulness of that report to the consumer. >> at a minimum, when to change out the presence so a consumer can understand it. >> i believe it is not designed to result in a more accurate estimate of value. it is designed for the convenience.

things that make things more useful to consumers are often excluded from the report due to the manner in which it is delivered. there is also privacy concerns. there now insisting on a whole slew of photographs. the borrower and the seller and the lender do not control the distribution of that appraisal report. a lot of our members are very concerned about privacy concerns. >> the only thing i have been told about real-estate is the location, location, location. what can we do to make sure that appraises understand the neighborhoods they are praising? >> thank you, again. unlike some of the discussion here concerning geographic

competency, i cannot believe that geographic competency is determined solely by the appraiser's proximity to the property that is being appraised. geographic competency is determined by the appraisers knowledge of a particular market or a particular neighborhood or a particular location. it is also determined by the appraisers knowledge of a particular property type. it is not absolutely, positively necessary at the time. the except the assignment. as long as they take the steps necessary. but you cannot require competency in a matter of minutes or hours. i believe that appraisers are fully capable of gaining the necessary confidence if they're given the appropriate and necessary time to spend in a

market, interview the folks necessary to gather market information, and given the time necessary to properly complete the appraisal report. >> even a competent appraiser is given just one job in some committee does not know. he cannot spend hours setting everything. if he is only going to do one appraisal on the neighborhood, he is probably going to miss some things. >> i agree. i think the uniform standard practice provides the appraiser guidance with what to do in such circumstances. that is to decline the assignment. i believe we have to hold appraisers to that standard. they have to know when it is a program for them to accept an assignment and when it is a

profit to decline and assignment. >> if i could squeeze in one more question. how are the evaluations are affecting the housing recovery? >> that is a pretty broad question. i believe the concern of the national association of realtors is that there are interference in appraises independence bid to call things the way they see it. i have plenty of anecdotal evidence of appraisers. i worked and praise in a florida. it is a county which is not monolithic. there are areas that are improving dramatically. there are areas that are stable. there are appraisers and have identified improving areas. as a result of their data and analysis and reaching an opinion have reported that to their clients.

they have made the appropriate adjustments to make sure that those sales are reflected to address what they would have sold for on the of effective date of the appraisal. the results that has been reported is that you better rethink those data failed adjustments. that is interference with and appraisers independence. it results in a misleading report and an appraisal report that does not reflect a current and improving market in a specific area. >> gentleman. i appealed aback. the gentleman from california for five minutes. >> thank you. there is a problem i have. i guess this panel dsn't. we don't have a mortgage broker. but the data i have seen our refinances.

let's put those in one category. that is to somebody refinancing their home or what ever. they are so efficient at changing the landscape that even though congress came back and said, no, we don't like that, they never listened. they're still implementing the concept which was a disaster. it was like ordering an appraisal when they could do something. they are excluded from the appraisal process. a lot of times they come in with a client or mortgage broker. the to do it in appraisal or go out. -- they could do it in an appraisal or go out there were issues we needed to look at and consider here. in a daughter of frank, --

daughter -- in dodd frank, a mixture that language was approved. to not pay for three appraisals and it could have been done the first time based on somebody's understanding of what an appraisal should be and who should do an appraisal. geography -- should that play a matter? i think appraisals are wonderful. that makes it real tough. you're dealing with the marketplace that is tough. an appraiser says they should forgo taking this job a. there is an inherent conflict in the industry when you put that onus on the individual. it has been a bad market. it has been tough.

people are trying to grow their businesses back. portability is huge. the problem i have this, especially in the industry today, your praising many distressed homes. they really do not know. you have to drive up and understand what you're dealing with. i do not believe it will come back. i don't believe it. you've got builders in communities that are buying lots for less than it costs to do the improvements. by land today, is it will -- is

supposed to be free but it is not. i do not mean that at all. , put their realistic value on that home based on current market conditions. if that doesn't happen, you will continue to address the marketplace. when you have a buyer willing to buy and a seller willing to sell and the appraiser comes down here, everybody is scratching their heads saying, what do we do? that is where the problem is today. you need to be able to say, i think he made some mistakes in your appraisal here. you can't do that. you have to give back to several realistic approaches to the concept of a value add to market

rate and putting a lender together with that buyer and seller to be able to move a forward in the marketplace. i think we are hurting ourselves and this economy by not looking at that. i guess when you look if the appraiser based on completing performance and appraisal and type of a product, is that happening? it is not about what steps are being taken to make sure each of appraiser understands what they're looking at. i am just saying that we restricted and not come full circle with a wrecking it. >> we are hearing from many of our appraisers that this is not happening. we're not sending people into an area who are familiar. one of the problems is, again, most of the function of today's residential lending market

invested in hiring people based on fee and a turnaround time. thee not saying that all of amc's out there are doing a good job of. we are saying there are people travelling distances to work on a residential simon when there are qualified people in the area who would do the job if the fee were commensurate with their time. >> the problem with traveling that distance is it is a cost factor. there are traveling. they're not doing something else. dear experiencing a loss in the car when they can do two appraisal something else. i think that is an inherent conflict. nobody wants the job done and i do not blame them. there is not adequate compensation based on what they have to do to get the appraisal done to expect in a reasonable approach. my time is way up.

i yield back. thank you very much. [laughter] >> might i be able to insert into the record a written statement. >> without objection. also, mr. miller, i will ask a few more questions. he would like to. all right. >> it is one of the most common complaints -- i know i just said that. what can be done to fix that problem? >> first off, i this got an e- mail forwarded to me from a tallahassee appraiser. this appraiser is in tallahassee. he wanted to let me know about an assignment that he was given

yesterday. there are a nation-wide appraisal company for a purchase located on a property. i do not know were george it is, but it is in georgia -- not in florida. if you're interested in working with us on this, please reply to this e-mail with your estimated turn time and a fee. this appraiser is licensed and certified in florida, not in georgia. that is just an example. i do not know how many other appraisers in florida receive the same e-mail. that is the primary driver of a lot of amc's. that determines who gets the assignment. turn time and feet. no question on need he is even certified in georgia or if he is a designated appraiser. >> the problem with that, and i do like appraisers. please to not anybody miss

characterize what i'm saying. everybody is shopping for business today. when a letter says that as a good deal, hourly continue. >> as to how it can be corrected, first off, i believe that consumers should be entitled to an appraisal report that is commensurate with the feed that the consumer pays. they are not getting that now. they're getting a fraction of what they are paying for. the bulk of the fee is going to a person completing the assignment. it is going to a company that adds no value to the transaction. they're simply a broker. a middleman. despite the appearance of the

appraisers qualifications, in most cases, it is not. it is simply a means of siphoning off money. very often, they are affiliated with the lender. >> done and on a -- done on a contract basis. >> yes. the consumer needs to get what they are paying for. if the lender wants to use the services of an appraisal management company to broker the services, the amc claim sarah and operated for the lender. well, let the lender pay for that service. don't make the appraiser pay for or the consumer. the lender is the one getting the benefit. make them pay for the benefit. >> i agree. i have tremendous respect for

appraisers. they usually relied on their in- house appraiser because they're taking a risk lending the money. they did what i considered a fair market appraisal. i did a good -- they did a good job. but they based on a house a block away. they understood the area. what we did was overturned the apple cart. to such a degree that nobody has figured out that we directed them to put it back the way it was. government does not change rapidly. for some reason they didn't, but coming back to the way it is not doing a good job. it has done a disservice to appraisers to do excellent work. it has hurt them. the lenders are no longer having appraisals to compare with theirs.

that appraisal cannot be used somewhere else. it is proprietary. we create a situation where they are bidding these things tumbled basis. i took notes on what you said earlier. you talked about fully capable and guidance. proximity does not matter if it fully capable if. the problem is a defining death. -- defining "if." the realtors are out trying to provide a service. the mortgage brokers are trying to provide a service.

they're trying to provide service to everybody. we put them in such a difficult situation that is just not working. i believe it is stifling the ability of the economy to recover. we decimated value. we are stopping it right there because we have mandated decisions that to north. with what wepy did. we messed up, but we're not happy with you not listening to we did wrong. we've got to fix it. somebody needs to listen. you have been more than generous. i would yield back my time twice. thank you. >> thank goodness.

>> manages respond quickly? -- may i just respond quickly? i agree with much of what you said. however, i do not believe that used consider legislating on the basis of anomalies were here say. i have heard the stories, too. >> i did not mean to do that. >> no, you wouldn't. i appreciate that. there are 350 of them in the country. are they all the best and a good? no. are the good and great ones? yes, there are. but they do provide real body to the process. they help protect the appraisers but also allow for

the types of transactions you're talking about to be facilitated. we meant to their testimony earlier that other methodologies can be utilized to check appraisals or give a sense of what the trends are in any given neighborhood or property. those sorts of tools are very much available in today's world. i was delighted to see my friend is using an ipad to give her testimony today. as you know from your real estate as the -- experience, but technology in our day was the memory code in a typewriter. things can change. things are available that go to the issue. >> what is your opinion? >> i think there are a couple of

things that are incumbent on all of us and we to make sure change. one of them is that lenders are held accountable for these appraisals and for the opinions and for their actions. we also need to make sure that people who are regulating this industry, where the regulators coming in, are well-versed. demand that we have a sufficient staff to take care of the problems that are coming. and to make sure that what is happening in the appraisal business will be maintained and a understood what they try to do their job. >> i am not disagreeing with what was just said. i will say, we all make mistakes. congress and did it. we came back and tried to correct that. what we did was to exclude everybody from being able to be involved in participating in this appraisal process. dealing with areas that we think

were done wrong. the happened in appraisals. they just do. but we have taken and excluded that ability to be competitive and being able to deal with mistakes. that is what i am saying we have messed up. to asaying, let's get back system of accountability, portability, and reliability. that is all i was saying. if anybody to any statement, it was never intended to be that way. i am saying that we moved up. the setback to a system or we can correct those mistakes. >> thank you. >> thank you. i'll recognize myself for five minutes. in that line of thinking, you have offered an alternative

regulatory structure. how would this structure different from the one we have today? >> let me start by emphasizing that with the appraisal institute is speaking about and what we're proposing is not a self-regulatory organization like some have mentioned. they involved industry. operating systems are owned and operated by bank regulators. one of the fundamentalists and adherence of standards of professional appraisal practices would remain unchanged. the current regulatory structure assumes that states cannot table of administering certification, creating a specific agency with the

process. the market licensing system assumes that a state can assume the responsibility and administer certification maintaining a presence as a last resort. we understand that they're offering the system outside of the regulation business. there are common problems at all state regulators face. it would not be for regulators to participate in the system. thank you. >> one last question. on page 2 of your testimony you quoted an inappropriate role of reasonable fees as required by odd frank.

could you expand on these points? >> let me catch up with you here. creates a loophole where they are allowed to go out and check customary fees, but within the scope of their investigation, they used these as part of the equation. we feel that fees should be outside of the roma and should be from the general marketplace. for instance, appraisals done for other purposes. just to get an idea of what the customary fee is for an independent appraiser in the

field, at trying to make a living in their small business. >> do you have a response to that? >> i do. we believe that appraisers should be paid appropriately. compensation for appraisers has always been said by the markets. it is the supply and demand equation, quite frankly. appraisers deserve reasonable, customary fees to be paid for the services that they provide. the notion that amc's are somehow driving down fees for appraisers is really mistaken. we do not set fees for appraisers. we work for lenders. we are doing the risk-assessment

pieces. we provide services for lenders and appraisers. one of the things i have been told in all of the years i was with the appraisal institute is one of the largest costs for appraisers was marketing. that, in addition to the risk, and those types of things, are real costs for appraisers doing retail assignments. much if not all of that has been offloaded. there is a share in compensation that risk in those duties are no longer done by that appraiser. will you go do this assignment? etc what is your new fee?

they say it is $3 or whatever and strike an agreement. there may be anomalies on that just like anomalies on traveling. those are truly anomalies, as far as i can tell. >> thank you. would anybody else like to comment on that? >> i think it is important to distinguish the importance of what has happened over the past eight years. at the height of the market, 60% of mortgages were instigated by mortgage brokers. however, we all know that we saw many problematic, nontraditional, and the loans. we also sought issues where producers were working exclusively with brokers and over-valuing properties. the intent was to ensure that arms-length transaction. we agree it could be changed. the reality today is some of the

un intended consequences to improve performance in the marketplace. appraisers tell us with regard to accuracy issues, in the past there have a day or more to produce a lender. today they are expected to do two to three in the same time. that is not a product of quality. they are committed to providing quality products. what we're not saying that i hope we do see is that we do see the subcommittee working with the potential regulators to ensure safety and the return of robust lending. >> thank you.

i would like to thank all the witnesses today. before i dismiss you, i ask you to insert the following material into the record. the statement from the american guild of appraisers. june 28, 2012, the bankers association. statement from the dallas-fort worth association of mortgage brokers. statement from the leading builders of america. some lenders may have additional questions for this panel. the record will remain open. questions for the witnesses and to replace the response in the record. with that, our like to thank

you for the expertise you brought. help us as we move forward. thank you for being here. this hearing is adjourned. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]