RISMEDIA, May 4, 2007-The National Association of Realtors(R) congratulated the House Financial Services Committee for passing H.R. 698, the Industrial Bank Holding Company Act of 2007, which provides enhanced regulation of parent companies of industrial loan companies (ILCs) and reinforces the national policy separating banking and commerce.
NAR has consistently opposed large commercial entities entering the business of banking, as well as national banking conglomerates engaging in the business of real estate or other commercial activities.
"Realtors have long supported the national policy against mixing banking and commerce. We 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," said NAR President Pat Vredevoogd Combs. "Today's actions by the full House Financial Services Committee are a big step towards keeping this important separation and safety measure in
"We see H.R. 698 as a critical component to the continued stability of our nation's financial system, and we thank Chairman Barney Frank (D-Mass.) and Rep. Paul Gillmor (R-Ohio) for 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," 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 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."
NAR, while applauding today's passage of H.R. 698, also encouraged the committee 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 not banking activities, but are commercial activities," Combs said.
NAR commended Congressmen Frank and Gillmor for their unyielding efforts to protect the nation's long-term financial system by strengthening the laws that prohibit the mixing of banking and commerce.
For more information, visit http://www.realtor.org.
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