Congress Introduces Community Choice In Real Estate Act, or more accurately, Keep Banks Out of Real Estate Act
There has been movement by some of the larger banks in the country to become active participants in all aspects of the real estate transaction. Since the depression banks have been limited to only interacting in the financial side of the transaction, not the brokerage side.
Obviously, the National Association of Realtors has opposed this, and Senators Hillary Clinton and Wayne Allard have introduced the Community Choice in Real Estate Act, S.413 to keep banks out of the real estate brokerage business.
What are your opinions on this separation or would it not bother you if banks got into the brokerage business?
The Community Choice in Real Estate Act, S.413, introduced Friday, Jan. 26, 2007, is co-sponsored by senators on both sides of the aisle: Jeff Bingaman (D-N.M.), Sherrod Brown (D-Ohio), Richard Burr (R-N.C.), Maria Cantwell (D-Wash.), John Ensign, (R-Nev.), Russ Feingold (D-Wis.), Tom Harkin (D-Iowa), Joe Lieberman (I-Conn.), Richard Shelby (R-Ala.), Bernie Sanders (I-Vt.) and Olympia Snowe (R-Maine).
In a letter circulated earlier in the week, Clinton and Allard explain that allowing banks into the real estate industry would “upend one of our nation’s most fundamental economic policies – the separation of banking and commerce — and put our economy at risk.” The letter also notes that “allowing banks into real estate hurts competition and consumers. It will result in bigger banks, higher costs and less consumer choice and service.”
NAR has communicated to Congress its longstanding support for keeping banks as impartial providers of credit and not permitting them to control all aspects of real estate transactions. via the Huntington News.
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Comment by LandlordSuccess.com on 31 January 2007:
In my opinion, quality of service would suffer as well as prices would increase. I think that this legislation is a good thing for the real estate industry.
Comment by Brian on 5 February 2007:
Banks originate mortgages and there are independent mortgage brokers.
Thus, if banks entered the real estate business as brokers, there would likely still be independent real estate agents.
I’m open to arguments, but I don’t see how additional competition would lead to higher costs for consumers.
Comment by John on 5 February 2009:
Banks can sure leverage a dollar but the current housing mess puts even their ability to do that in question. They should not be allowed into any new arenas until they get lending right. One of the biggest complaints is that a home owner in trouble has to be 90 days in arrears until the lender will even talk to them. The process is incredibly tedious and frustrating. With banks entering the sales and management side I do not see service improving or costs going down for the consumer. Banks are too large as it is and broadening their reach and influence sounds like a lose/lose for the consumer and the nation. I see less competition, worse service and no savings never mind conflicts of interest!