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Industry News

More Letters For Congress

January 30, 2002

Bankers? Group Launches Grass Roots Effort Against Realtors? Group?s Legislation

By Marcie Geffner
Inman News Features

The American Bankers Association is urging its members to send letters to Congressional representatives opposing legislation that would block banking institutions from getting into the real estate brokerage business.

The bankers? group has prepared a form letter that can be sent to House and Senate members through the group?s Web site. A notice on the Web site states: "We must let Congress know we won't let Realtors decide what's best for our industry and our customers. There is no charge to you for these letters. Thank you for participating in this important effort."

The letter, which can be printed by the association and hand-delivered to Congressional representatives, states that the correspondent is a constituent of the representative and is strongly opposed to the legislation, which "would damage the banking industry's ability to compete and fully serve the nation's communities."

The letter reads: "H.R. 3424 and S. 1839 would prevent national banks of all sizes and financial holding companies from offering real estate brokerage and property management services. The bills' promoter, the National Association of Realtors, is telling Congress that lending and real estate brokerage don't mix. That's pretty ironic, because many real estate brokerages already provide one-stop shopping, including mortgage lending and insurance. It seems to me that the only purpose of these bills is to protect NAR members from the kind of healthy, vigorous competition that consumers deserve.

"In one fell swoop, H.R. 3424 and S. 1839 would limit the choices available to consumers, protect one industry over another, and discriminate against banks and their employees who simply want to compete on an equal footing and serve their customers in the best possible way. Other depository institutions, including credit unions, can offer real estate brokerage. Why are national banks and financial holding companies the only ones excluded? ...

"Allowing banks the flexibility to compete on a level playing field would mean better prices, greater convenience and market innovation. H.R. 3424 and S. 1839 would block all that. I guess that's good for the NAR, but it's certainly bad for bank employees, consumers and local communities.... I urge you and your colleagues in Congress to stop this protectionist legislation now."

The legislation at the center of the controversy would block a proposal by the Federal Reserve and U.S. Treasury that would define real estate brokerage as a financial activity, opening that business to banking institutions under the Gramm-Leach-Bliley Act of 1999. The legislation has been introduced in the House and Senate with strong support from NAR.

Other real estate industry groups have shied from taking sides in the long battle between the banks and the brokers.

Inman News Features recently asked James M. Murphy, chairman of the Mortgage Bankers Association of America, whether that organization would support or oppose the legislation.

"So far as we are concerned," Murphy replied, "that is a dispute between the Realtors and the bankers. We don?t have a dog in that fight."

Copyright: Inman News Service



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