The groups, which represent more than one million members, sent a letter to members of Congress expressing their concerns. They say the proposal potentially jeopardizes the safety and integrity of the country's financial industry and could hurt consumers. In a recent NAR poll, consumers said they feared for their privacy if banks entered real estate--they worried that financial institutions would be involved in too many arenas to make real estate transactions fair for buyers. In a recent GlobeSt.com poll, 84.2% of 2,218 respondents--mostly real estate professionals--said they were against the proposal.

"If the Federal Reserve/Treasury Department proposal becomes enacted, it is likely to accelerate the consolidation of market power by a few large companies at the expense of smaller banking and financial firms. This could result in limited consumer choice and higher prices for homebuyers and rental tenants," the letter states.

The letter also questions whether banks would be able to offer day-to-day service and customer service, especially in meeting the special needs of first-time homebuyers in minority communities. "It is our concern that with the expansion of banks into real estate, this tradition could be lost quickly."

In addition to NAR, organizations signing the letter are the CCIM Institute, the Institute of Real Estate Management, the International Council of Shopping Centers, the National Affordable Housing Management Association, the National Association of Home Builders, the National Association of Industrial and Office Properties, the National Auctioneers Association and the National Leased Housing Association. Comments on the proposal are due to Congress, the Federal Reserve Board and Department of Treasury by May 1.