|
Maybe you’ve heard that some real-estate
folks oppose banks getting into the real-estate brokerage business. There’s
even a bill in Congress (H.R. 3424—the Community Choice in Real Estate
Act) to keep banks out of the business permanently. I happen to believe
that more competition in the way houses are bought and sold in America
will be good for consumers.
The National Association of Realtors (NAR) is advocating passage of this
bill. Yet Congress passed financial modernization legislation in 1999
to update the financial system’s rules and expand competition. Americans
always benefit when companies scramble to offer consumers better, cheaper
services. The NAR-supported bill would protect real-estate agents from
the very competition that Congress said was a good thing.
And while the NAR wants to keep banks out of real estate brokerage, some
of the group’s largest members—Century 21 and Coldwell Banker,
for example—combine brokerage and lending. They can do what banks
do, and more. Somehow that doesn’t seem equitable.
I had an opportunity to speak at a conference of real-estate agents in
San Francisco last July. I urged cooperation, not competition, between
our industries. And I outlined the many opportunities that will exist
for real-estate people should banks enter the business, from joint ventures
to many other partnership arrangements.
I came away from that conference with the sense that many real-estate
people believe, as I do, that such partnerships will improve services
and lower costs for America’s home- buyers and sellers.
Incidentally, state-chartered banks in 25 states and the District of Columbia,
credit unions and savings institutions already have the authority to broker
real estate. The NAR would close the door on just the subsidiaries of
national banks and financial holding companies. That sounds exclusionary
to me, when what we should be trying to do is open the housing marketplace
and let competition work to everyone’s advantage.
Banking is not a protected industry. Neither is real estate. If real-estate
companies can both lend and broker real estate, why can’t banks?
James E. Smith is president of the American Bankers Association
and chairman and CEO of Citizens Union State Bank & Trust in Clinton,
Mo. He can be reached by phone at 660.885.2241.
|
|
In recent weeks we have seen the devastation
caused by the current economic instability in our country. Now, big banking
conglomerates want to add real-estate brokerage and property management
to the already growing list of businesses they provide. Can we afford
to let the American Dream of Homeownership go the way of the retirement
savings of thousands of corporate employees? The Community Choice in Real
Estate Act (H.R. 3424) is designed to protect the dream of homeownership
for millions of Americans by prohibiting financial holding companies and
national banks from engaging in real-estate brokerage or real-estate management
activities.
If banks were allowed into real estate services, it would create an industry
dominated by just a few large banking conglom-erates. REALTORS® have
been working hand in hand with the government and other organizations
on programs designed to increase the percentage of homeownership. We have
succeeded in making the American Dream a reality for millions of new homeowners
who would not qualify for the limited mortgage offerings available at
the big banking conglomerates.
With their access to private financial data about their depositors, borrowers,
credit-card holders, and investors, big bank conglomerates will pressure
consumers to buy their proprietary products—mortgages, insurance
and other financial offerings—whether or not these products are the
best option for the consumer.
Banks that broker real estate and also sell mortgages cannot avoid a conflict
of interest. The real-estate brokerage business today is highly competitive,
widely available, efficient and structured to provide a high level of
personal service to buyers and sellers. Allowing banks to plumb the intimacies
of the real-estate transaction can only intensify consumers’ perception
that their privacy is being violated.
It is crucial to stop the banks’ big grab for the real-estate business
now, before big bank conglomerates capture an even larger share of a precious
resource—our privacy.
This legislation will help to keep local entrepreneurs and businesses
operating in our communities. It will help keep the dream of homeownership
alive for millions of our fellow Americans.
Mark Stallmann is president of the Missouri Association of REALTORS
and is broker/owner of Capital Realty Inc. He can be reached by phone
at 573.445.8400.
|
