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Bill would keep banks out of real estate They'd have an unfair disadvantage over Realtors, the agents say By GREG STILES Mail Tribune There are more than 700 licensed real estate agents in Jackson County, providing plenty of competition. There is also rivalry among title companies, appraisers and lenders. The notion of national banks entering the market as brokers, in addition to playing roles in lending and appraisal, is unsettling to those who earn their livelihood by arranging real estate deals. Legislation, known as the Community Choice in Real Estate Act of 2001, was introduced last week in the House of Representatives that would block large banking conglomerates from entering real estate brokerage or property management. Nearly 70 co-sponsors have signed onto the bill, and the National Association of Realtors threw its weight into the fray Thursday. "Banks do a wonderful job of dealing with financial transactions, but you can't equate buying a house to going to an ATM and withdrawing funds," said Rogue Valley Association of Realtors president Rick Harris. "That's the level major banks want to put real estate transactions on." Major banks have sought permission to sell and manage real estate via a proposed rule before the Federal Reserve Board and the Treasury Department. However, the real estate community holds that the proposed rule is contrary to what Congress intended when it passed the 1999 Gramm-Leach-Bliley Act. The proposed Community Choice in Real Estate Act would halt the banking community's entry into the field. "The banks have been doing an end run around congressional intent by going to the Treasury. They've been working on it for two years," said Harris, who was part of a Rogue Valley delegation to lobby Congress last summer. "We've been successful stalling them by using normal political means of calling our congressmen. If this bill doesn't pass, it would suggest to the U.S. Treasury that there's not enough willpower in Congress to stop it and the rule could be in place in six to eight months." Realtors association president Martin Edwards Jr. said in a prepared release that local real estate brokerages will find themselves at a competitive disadvantage to large federally chartered banks. "Their goal is to control the real estate transaction so that they can cross-sell their own loans and financial products, and discount brokerage fees to drive out competitors," Edwards said. "Banks that broker real estate and also sell mortgages cannot avoid a conflict of interest. They will steer consumers toward their proprietary products and services. When they say 'one stop shopping,' they really mean 'one bank shopping.' If you buy their home, you'll have to buy their loan whether it's the right product for you or not." A residual effect would be to cut out many current agents from the equation. "What makes America work is competition and fair competition," Harris said. "Banks have subsidies we don't have. If we do a bad job, competition will put us out of business. If banks do a bad job, the government will bail them out and we'll all pay for it with taxes." Reach reporter Greg Stiles at 776-4463 or e-mail [email protected] . Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.