The National Association of Realtors announced today that the omnibus spending package passed by the U.S. House and Senate last night includes a provision that prohibits the U.S. Department of Treasury from finalizing a rule that would allow banks to enter the real estate business. This is a major victory for Realtors, consumers and communities everywhere and is a testament to the sustained, proactive grassroots activities of local Realtors.

Banking conglomerates are seeking permission to sell and manage real estate via a proposed rule before the Federal Reserve Board and Treasury. However, the proposed rule is contrary to what Congress intended when it passed the 1999 Gramm-Leach-Bliley Act. The budget provision, which was inserted at the behest of Rep. Anne Northup (R-Ky.), specifically precludes the Treasury Department from using any funds to implement the rule in fiscal year 2003, which ends Sept. 30th.

Legislation that would amend the Bank Holding Company Act and permanently prohibit big banks from entering the real estate business was reintroduced last month with strong momentum and the same level of bipartisan support the bill gathered in the last Congress. Over 175 members of the House and 10

Senators have signed onto the Community Choice in Real Estate Act (H.R. 111, S. 98) since it was introduced Jan. 7th by Reps. Ken Calvert (R-Calif.) and Paul E. Kanjorski (D-Penn.) in the House and Sens. Richard Shelby (R-Ala.), Wayne Allard (R-Colo.) and Hillary Rodham Clinton (D-N.Y.) in the Senate.

"Last night's votes on the floors of the House and Senate send a clear and strong message to the Treasury that Congress never intended to mix banking and commerce. Both houses of Congress have spoken and officially declared their intent to keep banks out of real estate. We are hopeful that Treasury will deny the rule. We continue to believe that the banks cannot obtain through regulation that which they obviously cannot get through legislation," said 2002 NAR President Martin Edwards.

"We want to thank Congress and the hundreds of thousands of Realtors who've responded to our calls for action for all their support that made this victory possible. While last night?s votes were a tremendous step forward, we expect momentum for the stand-alone bill to grow even stronger as Realtors continue their regularly scheduled visits with their local congressional delegation," said NAR President Cathy Whatley.

NAR believes that congressional support for keeping banking conglomerates out of real estate also will mount this year in light of the recent accounting scandals and recent allegations that firewalls between different but separate bank activities have been violated.

A chorus of consumer, community and small business advocates have also voiced their support because they agree that if big banks were allowed to take over local real estate businesses, there would be a negative impact on communities across America, leaving home buyers and sellers with fewer choices, higher loan fees and reduced customer service.

"Housing continues to be the leading sector of our economy. Approximately 68 percent of new growth in our gross national product (GNP) last year was housing-related. We?re thrilled that Congress agrees that America as a nation simply cannot afford to allow big banks to take over the real estate business, which has been the leading pillar of our economy," Whatley said.

Organizations that have voiced support for the Community Choice in Real Estate Act include the Building Owners and Managers Association, CCIM Institute, Consumers Union, Institute of Real Estate Management, International Council of Shopping Centers, National Affordable Housing Management Association, National Association of Home Builders, National Association of Industrial and Office Properties, National Auctioneers Association, National Fair Housing Alliance, National Federation of Independent Business, National Leased Housing Association and the National Community Reinvestment Coalition.

Published: February 14, 2003

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