Bring On The Banks!
February 25, 2002
The Realty Alliance Opposes Realtors Association Effort To Bar Banks From Brokerage
By Marcie Geffner
Inman News Features
The Realty Alliance, an organization that represents many of the nation?s biggest names among independent residential real estate brokerage companies, has taken a stand against legislation pending in Congress that would bar banking institutions from getting into the real estate brokerage business. The group?s position reveals a stunning level of dissention within the National Association of Realtors? membership on the issue of whether the business should be opened to new competition from the financial sector.
Realty Alliance Chairman Richard Christopher, CEO of Patterson-Schwartz Real Estate in Hockessin, Del., on Feb. 8 sent a letter by overnight mail to NAR 2002 President Martin Edwards Jr., along with a copy of a white paper, "Why the Real Estate Industry Should Allow Banks to Enter the Business."
The letter calls NAR?s position "hypocritical," "fundamentally wrong" and "objectionable" because it would bar banks from real estate brokerage activity even though brokerages operate mortgage banking, insurance and title insurance businesses and certain state-chartered banks and subsidiaries of the Federal Savings & Loan Association are permitted to engage in real estate brokerage.
The letter also warns that NAR?s legislation?if it proves successful?could trigger "retaliatory" legislation from the banking industry. "If federal banks were indeed prohibited from engaging in real estate brokerage, how long would it be before the powerful banking lobby took steps to prevent real estate brokerages from participating in the mortgage banking, insurance and title insurance business?" the letter asks.
The letter also argues that allowing nationally chartered banks into real estate brokerage would increase competition, attract more capital to the industry and benefit consumers. "Increased competition from companies of size would benefit consumers by making all of us sharpen our skills and improve the services we provide," the letter said.
The letter closes with a not-so-subtle warning that NAR?s failure to reconsider its position could result in "a breakdown of the relationship between The Realty Alliance and NAR."
Charles McKee, CEO of The Realty Alliance, said the group hasn?t received a reply from the Realtors? association.
McKee also said alliance members are taking their message directly to members of Congress and that the white paper already has found its way to the hands of some influential representatives.
The Realty Alliance is comprised of 44 companies with 62,000 sales associates who closed more than 800,000 home sale transactions last year, according to the group. The membership roster includes Arvida Realty Services in Clearwater, Fla., The DeWolfe Cos. in Lexington, Mass., Ebby Halliday Realtors in Dallas, Texas, Edina Realty in Edina, Minn., F.C. Tucker in Indianapolis, Ind., First Team Real Estate in Costa Mesa, Calif., Fonville Morisey Realty in Raleigh, N.C., Frank Howard Allen in Novato, Calif., Howard Hanna Real Estate in Pittsburgh, Pa., John L. Scott Real Estate in Bellevue, Wash., The Keyes Co. in Miami, Fla., Latter & Blum Cos., in New Orleans, La., Long & Foster Real Estate in Fairfax, Va., Michael Saunders & Co. in Sarasota, Fla., Prudential Fox & Roach in Devon, Pa., Real Living (formerly HER Realtors) in Columbus, Ohio, Royal LePage in Canada, William Raveis Home-Link in Southport, Conn., and Windermere Real Estate in Seattle, Wash.
McKee said 37 of the Alliance?s 44 member companies agreed with the decision to oppose the legislation. He declined to name which of the companies took no position or supported NAR?s position on the matter.
The NAR-supported legislation?H.R. 324 and S. 1839?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 regulatory proposal has been on the table and the subject of intense debate in both industries since early last year.
NAR has waged an all-out effort to "stop the big grab" by the banks. The latest tactic is a newspaper advertising campaign that?s intended to spark a consumer movement in favor of NAR?s position. The print ads urge consumers to contact their Congressional representatives and ask them to co-sponsor the legislation.
Copyright: Inman News Service