RISMEDIA, May 23, 2007-The National Association of Realtors® said the House passage today of H.R. 698, the Industrial Bank Holding Company Act of 2007, would close a significant loophole in the current law, enhance the regulation of the parent companies that own industrial loan companies (ILC), and reinforce the long-standing national policy separating banking and commerce.
“This is a huge victory for the real estate industry and for the stability of our nation’s economy,” said NAR President Pat V. Combs. “NAR has consistently opposed blurring the lines between banking and commerce, the entry of large commercial entities into the banking business and the entry of national banking conglomerates into the business of real estate.”
“Today’s action by the House is a vital step towards keeping this important separation measure in place. Realtors oppose any efforts that weaken this policy, either by allowing commercial firms to engage in banking, or by permitting large national banks to engage in commercial activities, such as real estate brokerage and management,” Combs said.
The Realtors see H.R. 698 as a critical component to the continued stability of the nation’s financial system, largely by enforcing the prohibition against commercial firms controlling an ILC, directly or indirectly. “Closing the ILC loophole and permanently stopping commercially owned ILCs are important steps reinforcing the law prohibiting the mixing of banking and commerce,” said Combs.
Because banks play a unique role in our financial system, Congress established a national policy against mixing banking and commerce. “This policy is meant to keep banks focused on the business of banking,” said Combs. “When commerce and banking activities mix, it creates risks to the security and vitality of our financial system and can also have a negative impact on competition on many fronts.”
NAR continues to encourage Congress to consider additional legislation such as the Community Choice in Real Estate Act, H.R. 111, which like H.R. 698, would clarify and prohibit the mixing of banking and commerce.
“H.R. 111 clarifies congressional intent that real estate brokerage and management are commercial activities, not banking activities,” Combs said.
NAR commended Congressmen Frank (D-Mass.) and Paul Gillmor (R-Ohio) for their determined efforts to protect the nation’s financial system by strengthening the laws that prohibit the mixing of banking and commerce.
For more information, visit www.Realtor.org.
