Lawmakers Block Banks, For Now

National banking conglomerates won’t be entering the real estate business—at least for much of this year.

April 1, 2003

A provision Congress passed in February prohibits the U.S. Treasury from using fiscal year 2003 funds to implement its proposed rule defining brokerage and management as financial activities. The fiscal year ends Sept. 30.

The restriction, submitted by Rep. Anne Northup, R-Ky., is identical to a measure Congress passed last year and makes clear Congress’ position on the issue. “Congress has taken action showing its intent to keep banks out of real estate,” says 2002 NAR President Martin Edwards Jr., who continues to advocate NAR’s position on Capitol Hill.

“REALTORS® are a critical link in helping American families realize the American dream of owning their own home,” says Rep. Northup. “I was pleased to attach an amendment to the 2003 Treasury-Postal Appropriations bill to keep banks from entering into real estate transactions. By keeping real estate and banking separate, we have preserved essential characteristics of America’s financial infrastructure so that it remains independent, transparent, and objective.”

The restriction marks a significant legislative accomplishment as REALTORS® continue their effort to persuade Congress to pass the Community Choice in Real Estate Act. That legislation would permanently prohibit banks’ entrance into real estate. The legislation, H.R. 111 and S. 98, is identical to legislation sponsored last year by more than two-thirds of members in the House and almost 20 in the Senate.

As of late February, more than 175 members in the House and almost a dozen in the Senate have cosponsored the legislation.

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