After an eight-year fight, the battle for banks to engage in real estate brokerage ended quietly last week, according to American Banker with NAR declaring victory.
Congress passed an appropriations bill that would permanently ban the Treasury Department and Federal Reserve Board from finalizing a 2000 proposal to let banks into the brokerage business. The American Bankers Association had led the crusade against the provision for years and had succeeded in changing it to a series of one-year delays.
REAL Trends Comment: We opposed NAR's position on this issue and continue to think that it is ill considered and will result in decreasing the value of real estate firms in the future. Not many national banks are in any hurry to invest in brokerage at this time. What the bill insures is that were banks to enter real estate services they won't have to invest in the legacy infrastructure of the brokerage business and not be able to be paid on a commissionable basis. It most certainly does not prohibit financial institutions that are not Federally chartered or those who simply charge access fees from competing in new and unexpected ways."
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