WASHINGTON, February 02, 2009
Allowing large national banks to enter into real estate brokerage and property management could be devastating to the safety and security of the nation’s economy, which is why the National Association of Realtors® has been calling for legislation that would permanently ban banks from entering into real estate transactions.
“We thank Sens. Barbara Boxer, D-Calif., and Richard Burr, R-N.C., for their leadership in introducing legislation to prevent big banks from expanding their business to act as real estate brokers and managers,” said NAR President Charles McMillan.
During the introduction of the Community Choice in Real Estate Act on Friday, Sen. Boxer said, “Permitting banks to engage in commerce could compromise their lending decisions and create conflicts of interest while restricting consumer choice and competition among mortgage lenders.”
Some national banks had petitioned the federal government for the power to own and operate local real estate brokerage or property management companies. Since 2003 language has been included in annual appropriations bills to temporarily block implementation of these actions. The Community Choice in Real Estate Act would make the prohibition permanent.
“Imagine how much worse the crisis in the financial sector and our overall economy would be if banks had been permitted to enter into commercial activities such as real estate,” McMillan said. “We hope that Congress will work quickly to close any loopholes and pass laws that maintain the separation of banking and real estate and protect our nation’s economy from unnecessary and avoidable risks.”