Primary marketNAR Testifies Before Congress Protesting Banks In Real Estate
Consumer groups joined the National Association of Realtors today in calling on Congress to act in the best interests of consumers, local communities and small business by enacting legislation that would keep banking conglomerates out of real estate.
Representing NAR, the president of the South Dakota Association of Realtors testified before the U.S. Senate Banking Financial Institutions Subcommittee today that if banking conglomerates were allowed to enter real estate brokerage and property management, the homebuying public would soon be stuck with a consolidated real estate market that focuses more on out-of-state profits than on local prices and the personal touch, just like today"s big banking industry.
Sen. Tim Johnson (D-S.D.), chair of the Financial Institutions Subcommittee, held the hearing to look into the impact on consumers if big banks were allowed to get into the real estate industry.
Tom Murphy with Chell Realtors, a small residential firm in Sioux Falls, S.D., was joined by a chorus of consumer and community advocates in explaining that a market concentration in the hands of a few banking conglomerates would have a negative impact on communities across America, leaving home buyers and sellers with fewer choices, higher loan fees and reduced customer service.
Murphy called on Congress to take immediate action on the Community Choice in Real Estate Act in light of the overwhelming public and congressional
support the bill has received from a majority of the U.S. House of Representatives and groups like the Consumers Union and the National Community Reinvestment Coalition.
More than 235 members of the House and over a dozen Senators have signed onto H.R. 3424 and S. 1839, which would prohibit the proposed rule before the Federal Reserve Board and Treasury Department from taking effect, since the bills were introduced last December.
"If the nation"s most aggressive megabanks are allowed to add real estate to their long list of approved activities, you can be sure that consumer
choices in real estate services will shrink," Murphy said. "The reality is that the entry of federally chartered banks into the real estate brokerage business would tilt this balanced marketplace toward the nation"s megabanks. It would pit government subsidized banking companies against privately funded real estate enterprises. It would put taxpayer money at risk."
Like many members of Congress, the National Association of Realtors believes this issue is just too big to be decided by the regulators. The decision belongs with the nation"s lawmakers. Last month, Treasury Secretary O?Neill announced that he plans to postpone making a decision on this issue until next year.
"The ball is back in your court, and it"s time for Congress to resolve this issue," Murphy testified.
"Passage of the Community Choice in Real Estate Act will set the record straight, Murphy explained. "At the same time, it will ensure more balanced competition and more consumer choice. This legislation will help to keep local entrepreneurs and businesses operating in our communities. It will help to keep some of our best community leaders and volunteers in place."
NAR opposes allowing large banking conglomerates to enter real estate brokerage and property management under the Gramm-Leach-Bliley Act because it
will lead to higher costs for consumers, large scale consolidation in the real estate industry, and potential conflicts of interest should banks be able to steer homebuyers to their own insurance and loan products.
Other organizations that have voiced support for the Community Choice in Real Estate Act, which was introduced last December by Sens. Wayne Allard (R-Colo.), Hillary Rodham Clinton (D-N.Y.), Richard Shelby (R-Ala.) and Russell Feingold (D-Wis.), 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 Leased Housing Association and the National Community Reinvestment Coalition.