By Robert Freedman, Senior Editor, REALTOR® Magazine
Today, with the financial crisis still very much with us, it would be a hard sell for federal banking companies to get the go-ahead to own real estate brokerages and property management companies. It’s safe to say that the Federal Reserve and the U.S. Treasury Department would take a hard look at whether the business lines of federally chartered banking companies should extend so far into the commercial sector like that.
NAR Past President Martin Edwards, Jr., thanks Reps. Ken Calvert (R-Calif.) and Paul Kanjorski (D-Pa.) on Wednesday at NAR headquarters in Washington, D.C. Calvert is to the immediate left of Edwards (back to camera) and Kanjorski is to Calvert’s left.
But eight years ago, when banks sought to get the U.S. Treasury Department and the Federal Reserve to let them do that, they came just shy of succeeding. What stopped them was the action of a few determined members of Congress.
Among them were Rep. Paul Kanjorski (D-Pa.) and Ken Calvert (R-Calif.), who introduced a permanent ban on banks in real estate, called the Community Choice in Real Estate Act, as well as Anne Northup (R-Ky.) and Ernest Istook, Jr. (R-Okla.), who helped pass a series of one-year bans in appropriations legislation.
In the Senate, Richard Shelby (R-Ala.) and Wayne Allard (R-Colo.) also played key roles, as did more members of Congress than can be listed here.
After an eight-year effort, the permanent ban finally passed earlier this year. To mark the occasion, NAR President Charles McMillan and past presidents Martin Edwards Jr., Pat V. Combs, and Richard Mendenhall hosted the industry’s congressional heroes at a luncheon on Wednesday held at NAR headquarters on Capitol Hill to thank them for their support.
And not just for their support but for their foresight. As Rep. Northup (now a former member) said at the luncheon, the meltdown of the banking sector two years ago is all the evidence that’s needed to know that keeping banks out of real estate is the right thing to do.
You can learn more about the legislation that bans banks from real estate, as well as the background on the hard-fought issue, at REALTOR.org.