Keeping Banks Out of Real Estate

Evidently, in that bill that President Obama signed on Wednesday of this week, the Omnibus Appropriations Act, there was something of great importance to all of us who are in real estate.  I didn’t even know this item was included in the bill, because the focus has been on nothing but “earmarks” in the news.

An email I received from NAR alerted me to this item.  Hidden somewhere in this bill — I don’t know about you, but reading a bill is often a pretty big challenge for me — is an action that permanently prevents banks from becoming involved in real estate brokerage.  We’ve known that banks have wanted to get involved in real estate, and now this bill is going to put a stop to that idea. 

You can read more about it here.  I am grateful for the summary that NAR has provided, with a page for Q and A, too.  Here is a quick summary of the context of this story:

In early 2001, the Federal Reserve Board and the U.S. Treasury Department proposed rules to expand the powers of national bank conglomerates. The agencies proposed allowing national bank conglomerates to engage in real estate brokerage and management, reclassifying these activities as financial in nature. NAR strongly opposed the proposal, arguing that the Bank Holding Company Act of 1956 and the Gramm-Leach-Bliley Act (GLB Act) of 1999 did not authorize banking firms to provide real estate brokerage and property management services, as these are nonfinancial, inherently commercial activities.

 If you want to try wading through all the statements in the bill I did locate a place where there is a fairly easy to read version of the bill on the Appropriations Committee web site for the House of Congress.  I’m not sure if this is the final version.  I’m satisfied with the NAR summary.

On another note the sun is shining again today.  What you need to understand if you are wondering why I keep talking about the sun shining, it’s because I live in Northwest Washington.  We are used to having gray skies and rain around here.  I did hear that we may have more snow on Sunday, but for now this sunshine is very welcome.

Tags: banks, nar, omnibus appropriations act, real estate