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The Real Deal
Realtors oopose one bank shopping
Some of the nation's big banking conglomerates want Congress to allow one-stop shopping in the home buying process. Realtors across the United States don't think "one-bank" shopping is good for consumers.
The idea, in the form of a proposal before the Federal Reserve Board and U.S. Treasury, would permit financial holding companies and national bank financial subsidiaries to engage in real estate brokerage and management services. While the Fed and Treasury have failed to finalize this proposal for more than a year, Realtor-supported legislation in the U.S. Congress would stop the proposal dead in its tracks and forbid the nation's big banks from adding real estate to their growing list of permitted activities.
Realtors feel that if banks are allowed to get into real estate brokerage, they'll pressure consumers to buy their proprietary products--mortgage, insurance and other financial offerings--whether or not they are the best options for them. The fear is that big bank conglomerates could use their access to private financial data about their depositors, borrowers, credit card holders and investors to cross-sell their real estate clients with services and products they may or may not need at prices that may not be competitive.
Currently Realtors who work for real estate companies offer some form of mortgage service and are free to find the best deals for their customers. Realtors say that because their primary business is real estate, not lending, they don't have a vested interest in financial services.
Realtors across the country are urging Congress to pass H.R. 3424, the "Community Choice in Real Estate Act," and the Senate companion bill S-1839, which would force large bank conglomerates with unfair competitive advantages of a federal bank charter out of the real estate business.
According to Realtors, the real estate brokerage business today is highly competitive, widely available, efficient and structured to provide a high level of personal service to buyers and sellers. Realtors feel the issue pits communities against big business and threatens local real estate companies. Consumer privacy is also one of the other key issues.
Consumers are clearly worried about how banks would use the financial and personal data gleaned during a real estate transaction. Nearly 90 percent say privacy would be violated if large banks act as real estate agents, according to a 2001 survey by Yankelovich Partners. And 60 percent doubt current banking laws will protect privacy. Four in five don't believe it's a good idea for banks to act as brokers, according to the survey of 2,000 Americans conducted last year.
With identity theft becoming more of a problem every day, the issue of privacy is of real concern to consumers. Realtors are urging consumers to let their legislative representatives know of their concerns about banks getting into the real estate business and their concerns about privacy.
As intricate as real estate transactions are today, it's important to have a knowledgeable and qualified Realtor involved. The 3,000-member Silicon Valley Association of Realtors provides a list of local experienced Realtors who can provide the expertise needed to navigate complicated real estate transactions. Check out its website at www.siliconvalley-realtors.org.
Information provided in this column is presented by the Realtor members of the Silicon Valley Association of Realtors at www.siliconvalley-realtors.org. Send questions on any topic to jnewton@jnpr.com.
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Saratoga, California Since 1955
