Federal Reserve Board governor Laurence H. Meyer laid out the debate for the House Subcommittee on Financial Institutions and Consumer Credit. In 1999, when Congress passed the Gramm-Leach-Bliley Act that reformed the banking industry, it amended the Bank Holding Company Act to allow banks to engage in activities the Fed, in conjunction with the Secretary of the Treasurer, determine to be "financial in nature or incidental to a financial activity."
Not surprisingly banking officials argue that real estate and property management are financial or incidental to financial activity, while real estate officials argue they aren't. According to Meyer, most of the comments received by the Fed and the Secretary of the Treasury have been against the measure, mostly from real estate brokers.
Meyer told the subcommittee that the Federal Reserve Board hadn't come to a decision on the matter. "While we do not relish being in the middle, we believe that a debate on these matters is the best way to identify and sort through the issues and to reach an informed decision, and is precisely the type of debate envisioned in the GLB Act," he said.
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