Industry Tells Congress: Keep Banks Out Of Real Estate

WASHINGTON, DC-Real estate groups have stepped up the pressure on Congress to kill a proposal that would allow banks and finance companies to enter the fields of real estate brokerage and property management. Eight of the nation’s leading real estate trade and professional associations joined the National Association of Realtors in their disapproval of the measure.

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.