For America’s Future

From the NAR President: Having affordable health insurance and keeping big banks out of real estate is vital for the country, not just the real estate industry.

Because REALTORS® represent a broad cross-section of the American public, what’s best for REALTORS® is often what’s best for the country at large. That’s certainly true with two battles the National Association of REALTORS® is waging: the drive for affordable health insurance and the campaign to keep big banks out of real estate.

What do health insurance and banking have in common? For one thing, both systems are fundamental to our country’s well-being. For another, both systems touch all our lives in ways that can be profoundly good or terribly bad.

Let’s first look at health insurance and acknowledge that the current system isn’t fair. According to the most recent U.S. Census data, 45.8 million citizens are uninsured, including more than 21 million full-time workers and 6 million part-time workers.

Many of those uninsured workers are self-employed or work for small employers that can’t afford to offer benefits. There’s no way John Doe Real Estate can get anything close to the rates available through a union or large employer plan—so John goes without insurance or settles for only catastrophic care. That’s why NAR has joined a broad coalition of small-business organizations to advance a new idea in health insurance: permitting associations to provide coverage to their members through small business health plans (SBHPs), also known as association health plans. If Congress were to enact SBHP legislation, we estimate NAR members who pay individual insurance rates could cut their overhead costs by as much as 30 percent.

SBHPs are an idea whose time has come. The U.S. House of Representatives has already passed the authorizing legislation, and the Senate is now considering two bills. One version is expected to reach the Senate floor in early April. Since President Bush has indicated his support for SBHPs, Senate passage would mean almost certain victory. In the event of a Senate vote, NAR will issue a Call for Action, asking you to write to your senators.

There’s little ambiguity over the health insurance issue, but our battle to keep large banks out of real estate is a bit more complicated. The most recent volley was fired by the Office of the Comptroller of the Currency in December, when Comptroller John C. Dugan gave three national banks the OK to develop and invest in various real estate projects.

As NAR Chief Economist David Lereah argues forcefully (page 20), the OCC’s decision expands the authority of national banks to invest in real estate for purposes other than their own use. That’s bad news for American taxpayers. The savings and loan crisis of the 1980s was caused by government policies that allowed the mixing of banking and commerce. U.S. taxpayers paid 80 percent of the cost of that crisis, to the tune of $123.8 billion, according to a 2000 article in the FDIC Banking Review.

NAR is doing all it can to stop this expansion of bank powers into the real estate business by educating our friends in Congress and questioning the wisdom of these regulatory decisions.

When you receive a Call for Action from NAR on either of these issues, please do respond. It takes just a few moments. Our positions on both issues, while driven by our mission to serve you, also are about ensuring a better future for all Americans.