May 20, 2003
Senators Warner and Allen
and Representative Moran
Senators Warner and Allen
and Representative Moran
PO Box 8208
Alexandria, VA 22306-8208
May 20, 2003
The Honorable John William Warner
United States Senate
225 Russell Senate Office Building
Washington, DC 20510-4601
The Honorable George F. Allen
United States Senate
204 Russell Senate Office Building
Washington, DC 20510-4604
The Honorable James P. Moran
U.S House of Representatives
2239 Rayburn House Office Building
Washington, DC 20515-4608
Dear Senators Warner and Allen and Representative Moran:
As a constituent of yours, I am writing to express my strong opposition to bills that have been introduced in the House and Senate (H.R. 111 and S. 98). This legislation, if enacted, would undermine both a Congressionally mandated regulatory process and the banking industry’s ability to compete on a level playing field to fully serve the nation’s communities.
H.R. 111 and S. 98 would permanently prevent national banks of all sizes and financial holding companies from offering real estate brokerage and property management services. The bills’ promoter, the National Association of Realtors (NAR), is claiming that real estate brokerage and lending don’t mix, despite the fact that many real estate brokerages offer one-stop-shopping, including mortgage lending and insurance. Real estate firms like Coldwell Banker and ERA are significant mortgage lenders. In fact, other depository institutions, including credit unions, can offer real estate brokerage.
In 2001, the Treasury Department and the Federal Reserve issued a proposal that would allow national banks and financial holding companies to offer real estate brokerage and property management. Congress explicitly established this regulatory process, in order to keep our financial system up-to-date, when it overwhelmingly approved the Gramm Leach-Bliley Act (GLBA) in 1999. Now, the NAR wants Congress to deny the regulators the authority to complete the process. I agree with House Financial Services Committee Chairman Mike Oxley, who recently said, “The rulemaking process by the Fed and Treasury – as set in law by the [Gramm-Leach-Bliley] Act – should be allowed to take its course without legislative interference.”
Our country thrives on competition, and our free market system is what makes America the most vibrant and innovative country in the world. NAR’s poorly named “Community Choice in Real Estate Act” would, in fact, limit competition and consumer choice.
I urge you and your colleagues in Congress to oppose this protectionist legislation. Thank you.
Sincerely,
James Landrith
June 27, 2003
Mr. James Landrith
P.O. Box 8208
Alexandria, Virginia 22306-8208
Dear Mr. Landrith:
Thank you for contacting my office to express your views about a proposed rule to allow banks to engage in real estate brokerage services and property management activities.
In November 1999, the Financial Services Modernization Act was signed into law (P.L.106-102), allowing for new forms of affiliation among banks, insurance companies, and securities firms. Under the Act, Congress delegated authority to the Treasury Department and the Federal Reserve Board to determine what activities are “financial in nature or incidental to financial activity and would therefore be covered under the scope of the legislation.
The Treasury Department and Federal Reserve requested public comment on a proposed rule that would authorize Financial Holding Companies and their financial subsidiaries to provide real estate brokerage services and real estate management services. The question is if real estate activities can be classified as financial in nature.
Many argue that allowing banks to participate in real estate activities would increase competition and provide consumers with more options and opportunities, and I share concerns that the opposite would be true. It is important to understand the potential impact on consumers.
Representative Anne Northup (R-KY) added an amendment to the House-passed FY2003 Treasury Appropriations bill, H.R.5120, during the 107th Congress, to prevent the Treasury Department from using any appropriated funds to issue the proposed regulation. That amendment was carried forward into the appropriations package passed early in the 108th Congress, H.J.Res. 2. As a result, the Treasury Department is forbidden to act upon its regulation until October 2003, when fiscal year 2004 begins. Consequently, the Federal Reserve cannot issue it before that time.
In addition, on January 7, 2003, Senator Wayne Allard (R-CO) introduced S.98, the Community Choice in Real Estate Act, and this bill was referred to the Senate Committee on Banking, Housing, and Urban Affairs. This legislation would prohibit financial holding companies and national banks from engaging in real estate brokerage services or property management activities.
Please be assured that I am closely monitoring further developments regarding the proposed regulation. Again, I appreciate that you have contacted me on this important issue.
With kind regards, I am
Sincerely,
John Warner
JW/vas