"Banks should not be allowed to expand their existing powers at your expense." That's what Sen. Richard Shelby (R-Ala.) told attendees at the 2002 REALTORS Conference & Expo being held here. More than 22,000 Realtors are attending the Nov. 9-11 meetings.

Sen. Shelby, a cosponsor of the Community Choice in Real Estate Act (S. 1839), spoke at length during a public policy political forum about why banks should not be allowed to enter real estate. When the 108th Congress convenes in January, he is likely to assume the chairmanship of the Senate

Committee on Banking, Housing and Urban Affairs, which is the committee with jurisdiction over this issue.

Mixing banking and commerce, which is what would happen if banking conglomerates were allowed to get into the real estate business, would have far-reaching negative effects on the economy, job creation, the availability of credit, market consolidation and the stability of the financial services industry, Shelby said.

"A large part of the thrift crisis of the 80s and 90s can be attributed to changes resulting from the mixing of banking and commerce. That?s not something I want to see happen ever again," Shelby told Realtors. "If banks were allowed to enter real estate, they would make mortgage decisions based on business ties rather credit-worthiness. The best (economic) outcomes involve some limit on permissible banking activities," he said.

"Real estate brokerage is definitely a commercial activity. The sale of land is no different than the sale of any other product. Banks should not be on multiple sides of commercial transactions. They should not be allowed to control the sale of goods and the financing of goods," Shelby explained.

Shelby also acknowledged Realtors for the work they do and the positive impact they have on the American economy. "The real estate industry is very, very important to America. You help people achieve the American dream of homeownership. Real estate is a sustaining force of the economy."

The forum also featured election analysis from noted political analyst Charlie Cook, author of The Cook Political Report. Cook analyzed the results of Tuesday?s election and congratulated the Realtors on their political and grassroots efforts.

Referring to NAR President Martin Edwards Jr., a partner in Colliers Wilkinson & Snowden Inc. of Memphis, Tenn., Cook exclaimed, "I've never seen a president of a trade association more engaged and more effective on Capitol Hill. As an organization, you are an incredibly effective force. The Realtor party had a great night Tuesday night and you should be proud." Edwards led NAR's legislative efforts on the banking issue this year and will continue to do so next year. Under his leadership, over 245 members of the U.S. House of Representatives and 15 U.S. Senators signed on as cosponsors of the Community Choice in Real Estate Act.

Published: December 11, 2002

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