Banks out of Real Estate
Protecting Consumers from Banks Entering Real Estate Brokerage
H.R. 111, the Community Choice in Real Estate Act, was introduced by its sponsors Congressmen Paul Kanjorski (D- Pa.) and Ken Calvert (R-Calif.). Fifty cosponsors were added on the first day of Congress.
NAR has repeatedly communicated to Congress its longstanding support for keeping banks as impartial providers of credit and not permitting them to control all aspects of real estate transactions. NAR noted that putting real estate brokerage into the hands of banks would leave consumers with fewer choices and higher costs.
Realtors® provide extensive personal attention to consumers during the lengthy process of buying a home. It would be difficult for banks to provide that type of counsel because of conflicts with their other business objectives, said Combs. We thank Representatives Kanjorski and Calvert for introducing H.R. 111 and gathering bipartisan support for it. We look forward to working with them towards its passage, and ensuring the vigorous enforcement of the law that prohibits the mixing of banking and commerce.
Enactment of H.R. 111 would keep real estate brokerage and management clearly defined as commercial activities and not financial matters, ensuring that the separation of banking and commerce continues as mandated by the Gramm-Leach-Bliley Act.
Without passage of this legislation, we are concerned that national bank conglomerates will continue their attempts to enter into the real estate industry, putting both competition and the nation¿s economic health at risk,¿ said Combs. The U.S. economy depends on a strong real estate market and a healthy banking industry. However, attempts by the Federal Reserve and Treasury to redefine real estate as a financial activity would have harmful effects resulting in less competition, higher costs for consumers, and give competitive advantages to the banks.
Outlook
On January 4, 2007, Representatives Paul Kanjorski (D-PA) and Ken Calvert (R-CA) reintroduced H.R. 111, "The Community Choice in Real Estate Act," which clarifies Congressional intent that real estate brokerage and management are not banking activities. Currently, 261 House members have signed on as cosponsors of H.R. 111. On January 26, 2007, Senators Hillary Rodham Clinton (D-NY) and Wayne Allard (R-CO) introduced a Senate version of "The Community Choice in Real Estate Act," which has 21 cosponsors.
On June 29, 2007, the U.S. House of Representatives passed the FY2008 Financial Services and General Government Appropriations bill, which includes an NAR supported provision prohibiting the Federal Reserve and Treasury Department from finalizing a rule allowing banks to engage in real estate brokerage and management. The final vote on passage of the appropriations bill was 240 in support and 179 against.
Click HERE to read an article about H.R. 111 written by the bill's co-sponsor, Rep. Paul Kanjorski (D-PA), in the Hill Newspaper.