This rule would allow banks to buy up large brokerages and force the closure of thousands of smaller brokers, unable to compete with the advantages of a federal bank charter and the financial resources enjoyed by major banking superpowers. NAR announced its opposition to the proposed regulation on December 13, following the decision by the Federal Reserve's Board of Governors to seek public comment on the proposal. Mendenhall is urging Realtors to write comment letters to the Federal Reserve and Treasury to oppose the regulation, which could take effect if the Board of Governors decides real estate brokerage and property management are financial activities or incidental to a financial activity. America's broker-centric real estate industry is the envy of the world. A measure of its success is today's record national homeownership rate.
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Edwards said NAR is committed to stopping the proposal, and is contacting members of Congress as well as providing comments to the Federal Reserve and Treasury. Fifty-seven percent fear that owning real estate brokerages is too risky for banks and could lead to a repeat of the savings and loan crisis and the Asian financial crisis. Comments on the proposed rule are due by March 2, and Mendenhall urged every Realtor concerned about the issue to contact the Federal Reserve Board, the Treasury and Congress.