ResalesNAR Broadens Washington Efforts
Promising to never again be caught with its pants down, the 802,000-member National Association of Realtors has created a regulatory and industry relations division to lobby federal regulators and other housing-related organizations.
The move is largely in response to the attempt by the banking industry to gain approval from the Federal Reserve and Treasury Department to move into the real estate and property management sectors.
The "Big Grab," as NAR likes to call the effort, was "a wake-up call for us," Chief Economist David Lereah said at the group"s annual convention in Chicago earlier this month. "We weren"t ready, and it caught us off guard."
But to "make sure we are on guard from here on out," the nation"s largest trade group and one of the most politically potent is creating the new division to lobby regulators and real estate-related organizations.
It will be headed by George Griffin and Jeanne Delgado, two long-time members of NAR"s Government Affairs section. They will report to Lereah, who before joining NAR 18 months ago was chief economist at the Mortgage Bankers Association.
"Our regulator is not just HUD, not anymore," Lereah said. "All federal agencies are now our regulators; the Fed, the EPA, the FTC. The list goes on and on. But the banking and financial institution industries" regulators are especially important for this industry."
While the NAR appears to have prevented the rule that was proposed late last year from being adopted, at least for the time being, it hasn"t stopped lobbying against it. Last month, it sent to the White House 35,000 protest letters from brokers and agents throughout the country, all on a single CD.
"The good news is that there has been no final regulation," said Griffin. "When (the rule) was first introduced, it was a done deal. But it hasn"t happened because we slowed it down and got their attention."
The basis for the rule is the Gramm-Leach-Bliley Holding Co. Act, which gave financial holding companies permission to engage in additional financial activities but precluded them from entering commerce. And real estate, says NAR President Martin Edwards, a commercial broker from Memphis, is a commercial, not a financial, activity.
"Mixing banks and commerce challenges Congressional intent," said Griffin, who charged that big banks are making a "regulatory end-run" around lawmakers. "What they did not get by legislation they are attempting to get by regulation."
NAR officials said they will settle for nothing less than a complete withdrawal of the proposed regulation. Failing that, they hope to win legislation that would specifically outlaw banks from entering the real estate field by coaching the controversy as a consumer issue.
"It"s bad for consumers because it restricts choice," Edwards said. "If the rules goes forward, thousands of Realtors will suffer and millions of consumers will be left without choice and competition."
NAR says it already has the support of 259 House members. And while no potential sponsor has stepped forward yet, sources say Democrat Harold Ford of Tennessee, a member of the Financial Services Committee, is likely to carry the ball when Congress reconvenes in January.
"No good consumer issues goes un-introduced when lawmakers are looking to be re- elected," said James Liptak, a broker from Paso Robles, Calif., who chairs the organization"s conventional finance and lending committee.
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