Legislation that prohibits big banking conglomerates from entering the real estate business was reintroduced in both houses of Congress today with the same strong bipartisan support the bill garnered in the last Congress, the National Association of Realtors announced. Known as the Community Choice in Real Estate Act, the bill is identical to legislation that was introduced in the 107th Congress. Over a dozen U.S. Senators and more than 245 members of the U.S. House of Representatives signed onto that bill last session.

NAR commended lead sponsors Reps. Ken Calvert (R-Calif.) and Paul E. Kanjorski (D-Penn.) in the House and original sponsors Sens. Richard Shelby (R-Ala.), Wayne Allard (R-Colo.) and Hillary Rodham Clinton (D-N.Y.) for their unwavering commitment to keep big banks from entering real estate brokerage or property management. Over 100 Representatives are expected to sign onto the bill as original cosponsors today. A final list will be available later this afternoon.

Banking conglomerates are seeking permission to sell and manage real estate via a proposed rule before the Federal Reserve Board and the Treasury Department. However, the proposed rule is contrary to what Congress intended when it passed the 1999 Gramm-Leach-Bliley Act. This bill clarifies Congressional intent and amends the Bank Holding Company Act to preclude any such action by the Federal Reserve or Treasury.

"Today's reintroduction of the Community Choice in Real Estate Act with sends a clear signal that Congress never intended to mix banking and commerce," said NAR President Cathy Whatley. "We are proud that Congressmen Calvert and Kanjorski and Senators Allard and Clinton as well as new Senate Banking Committee Chairman Shelby have reaffirmed their commitment to passing this bill. Our goal this year is the same as last year ? we will not relent until the bill is passed. We simply ran out of time last year."

NAR has several reasons to be even more optimistic about the bill?s chances this Congress. NAR won the only votes on this issue in the last Congress when the House passed language precluding the Treasury Department from using any funds to implement the rule in 2003. Congressional support for keeping big banks out of real estate is expected to grow even stronger this year in light of the recent accounting scandals and recent allegations that firewalls between different but separate bank activities have been violated.

"Allowing large national banks to enter into and dominate the real estate industry is explicitly contrary to Congressional intent and is a dangerous proposition. In order to properly protect consumers and home buyers, as well as the national economy, banking and commerce should remain separate as Congress intended upon passage of the Gramm-Leach-Bliley Act," Rep. Calvert said.

"Our local communities are best supported by local businesses like hometown Realtors who serve as leaders, volunteers, fundraisers and boosters. In addition, local Realtors who live and work in the same neighborhoods as their customers are best positioned to provide personal customer service," Rep. Kanjorski said.

"The Community Choice in Real Estate Act of 2003 is the continuation of an effort that I began in the 107th Congress," Sen. Allard said. "This bill would clarify Congressional intent that real estate brokerage and management are not financial activities and would therefore retain the separation of commerce and banking that we intended during consideration of the Gramm-Leach-Bliley Act in 1999."

A chorus of consumer and community advocates have also voiced their support for the bill because they agree that if big banks were allowed to take over local real estate businesses, there would be a negative impact on communities across America, leaving home buyers and sellers with fewer choices, higher loan fees and reduced customer service.

America's small business owners agree that banking conglomerates should stay out of the real estate business. The National Federation of Independent Business (NFIB) recently expressed support for the bill.

"Housing continues to be the pillar of the economy. Approximately 68 percent of new growth in our gross national product (GNP) last year was housing-related. We simply cannot afford to allow big banks to enter real estate and thus tinker with the leading sector of America's economy," Whatley said.

Organizations that have voiced support for the Community Choice in Real Estate Act 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 Federation of Independent Business, National Leased Housing Association and the National Community Reinvestment Coalition.

Published: January 8, 2003

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