The National Association of Realtors on April 3 called on the Treasury Department to withdraw a 2001 proposal that would have allowed real estate brokerage and management activities for financial holding companies and financial subsidiaries. The Realtors called the initiative an encroachment into commercial activity that should be off-limits for banking firms.
The letter, which the NAR sent in response to Treasury Secretary Henry M. Paulson’s March 31 proposal to broadly restructure U.S. financial services regulation, said the proposed regulatory blueprint would unwisely allow holding companies to own insured depository institutions and commercial firms. In a letter to Paulson, NAR President Richard F. Gaylord said real estate activities are “purely commercial” activities, and should not be allowed for banking firms.
In 2001, the Federal Reserve Board and the Treasury asked for comment on a proposal that would have allowed certain real estate powers for Fed-regulated financial holding companies and financial subsidiaries of national banks, which are regulated by the Office of the Comptroller of the Currency. The proposal was never finalized, in part because of vigorous opposition in Congress spearheaded by the Realtors. Since 2001, appropriations bills have been the main vehicle for opposition, with the NAR supporting provisions that bar the Treasury from spending any money to finalize the proposal.
In addition, the NAR objected to requiring state banks to also have a federal charter, saying it “will have the effect of weakening and very likely killing the state bank option under the dual banking system that dates to the Civil War. The story of banking in recent years has been one of both consolidation and chartering of new community banks. The vast majority of the new banks have state charters. As an association of small business persons, we believe that the Nation is best served by making sure there will be room for a diverse banking industry meeting the needs of all its customers, large and small.”
Treasury “Blueprint” Causes Concern, Controversy (NAR 4/3/08)
April 8, 2008