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Senate Bill Would Bar Banks From RE Industry

WASHINGTON, DC-The House introduced a similar bill a few weeks ago. Industry groups are hopeful of the bill's chances.

By Erika Morphy | Updated on January 29, 2007

WASHINGTON, DC-The Senate has introduced legislation that would prohibit financial-holding companies and national banks from getting involved in the real estate brokerage or real estate management industries. Dubbed the Community Choice in Real Estate Act, S.413 was sponsored by Sen. Hillary Rodham Clinton (D-NY) and Sen. Wayne Allard (R-CO). It is very similar to legislation introduced in the House a few weeks ago.

Representatives of the real estate community have been lobbying for such a ban for the past few years, citing competitive factors and the overall economic health of the country as reasons to oppose it. “We believe that the introduction of S.413 is a significant step in ensuring that banks cannot blend into commerce activities,” a spokeswoman for the National Association of Realtors tells GlobeSt.com. “We are highly supportive of it.”

NAR is currently conducting studies in-house that would better quantify the impact on the economy if banks were to enter this realm, she says. Anecdotal evidence of the dangers includes the S&L crash of the 1980s.

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