Realtors® Support Frank-Gillmor Bill Tightening Loophole in Banking Law

WASHINGTON, April 25, 2007

The National Association of Realtors® announced its support for H.R. 698, the Industrial Bank Holding Company Act of 2007, which provides enhanced regulation of parent companies of industrial loan companies (ILCs) and strengthens the national policy separating banking and commerce.

In testimony before the full House Financial Services Committee today, Thomas M. Stevens, NAR immediate past president, said, "Realtors® have long-supported the national policy against the separation of banking and commerce. We oppose any efforts to 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."

"NAR supports the prohibition of commercial firms from directly or indirectly controlling an ILC.  We see this provision in H.R. 698 as a critical component to continued stability in our nation's financial system," said Stevens. NAR has continued to call on Congress and financial regulators to close the ILC loophole and to permanently stop commercially owned ILCs.

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 Stevens. "When commercial activities 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."

Stevens also encouraged the committee to consider additional legislation including 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 not banking activities, but are commercial activities," Stevens said.

Stevens thanked Chairman Barney Frank (D-Mass.) and Rep. Paul Gillmor (R-Ohio) for their unyielding efforts to protect the nation's long-term financial system, and for enforcing the laws that prohibit the mixing of banking and commerce and urging action on both H.R 698 and H.R 111.

The National Association of Realtors® , "The Voice for Real Estate," is America's largest trade association, representing more than 1.3 million members involved in all aspects of residential and commercial real estate industries. 

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