REAL ESTATE
by Jim Coleman, REALTOR®
SEPARATION OF BANKS FROM REAL ESTATE IS IMPORTANT
The matter of whether or not to permit banks to be owners and operators within the real estate industry has been debated for several years now. The recent disasters in the lending and real estate industries experienced in American, along with the current economic difficulties, should provide prima-facie evidence that it is a good thing banks have not been permitted, and should be banned from being able to be in such a position of ownership, power and control within the real estate industry.
The National Association of Realtors® has been a leading force to bar and ban this from ever happening. In a recent news release, the NAR expressed it position by stating: "Allowing large national banks to enter into real estate brokerage and property management could be devastating to the safety and security of the nation's economy, which is why the National Association of Realtors® has been calling for legislation that would permanently ban banks from entering into real estate transactions."
NAR President Charles McMillan further stated, quoting Senator Boxer, that "during the introduction of the Community Choice in Real Estate Act Sen. Boxer said, 'Permitting banks to engage in commerce could compromise their lending decisions and create conflicts of interest while restricting consumer choice and competition among mortgage lenders.'"
President McMillan went on to say: "Some national banks had petitioned the federal government for the power to own and operate local real estate brokerage or property management companies. Since 2003 language has been included in annual appropriations bills to temporarily block implementation of these actions. The Community Choice in Real Estate Act would make the prohibition permanent." He said, "Imagine how much worse the crisis in the financial sector and our overall economy would be if banks had been permitted to enter into commercial activities such as real estate. We hope that Congress will work quickly to close any loopholes and pass laws that maintain the separation of banking and real estate and protect our nation's economy from unnecessary and avoidable risks."
Using our recent past history as a backdrop or framework, one does not have to have "guru" status or possess much of an imagination to be able to envision the sorts of behavior, associations and arrangements that could easily come into play if such conditions of having banks in real estate were permitted. For the sakes of all related industries and the good of the public, there should forever be a separation of banks from real estate.
St. George REALTOR® Jim Coleman is Associate Broker and Partner/Owner of ERA Brokers Consolidated. He Specializes in Residential, Investment and Commercial Real Estate, holding National Designations of Accredited Buyers Representative (ABR), Certified Residential Specialist (CRS), Resort and Second Home Property Specialist (RSPS) and Seniors Real Estate Specialist (SRES). You can contact him by e-mail at Jim@RealtorJimC.com. Call: (435) 674-0600; or write: Jim Coleman, 201 East St. George Boulevard, St. George, Utah 84770. This and other columns are available at www.RealtorJimC.com/articles.