An organization of state-level government officials who regulate real estate brokerage businesses has taken a position that national banks shouldn’t be exempt from state real estate licensing laws and regulations.

“Federal legislation or administrative direction must not contain any provision that exempts national banks or their operating subsidiaries from state or territorial real estate licensing laws and regulations now in place in each jurisdiction,” the Association of Real Estate License Law Officials said in a statement today.

The policy declaration encompasses both real estate-related activity by national banks and federal preemption of state authority over the banking industry.

“We are very concerned that one or both of the above would be the result of any decision that real estate is primarily financial in nature,” the officials said.

ARELLO is comprised of real estate regulators from 48 states, the District of Columbia, Puerto Rico, Guam and the Virgin Islands and other countries and territories around the world. Its mission is “to support jurisdictions in the administration and enforcement of real estate license laws put in place for the purpose of protecting the public interest.”

U.S. state licensing agencies are responsible for state requirements that protect and regulate the sale of real estate and license those brokers and agents who facilitate that process. Many of these commissions promulgate rules and regulations and advise the legislatures on changes necessary to reflect state-specific practices. Real estate commissions also monitor the business of real estate and investigate alleged illegal or fraudulent real estate practices and proscribe education requirements for real estate licensees, according to ARELLO.

The organization’s concern about federal preemption of state real estate laws stemmed from a federal agency’s prior action on state banking laws. The Office of the Comptroller of the Currency in February issued a final rule that preempted national banks and their operating subsidiaries from certain state laws that require licensing, registration, filings and reports by creditors.

“Any federal legislation or regulation, which exempts national banks from the jurisdiction of state real estate licensing authorities, is directly threatening the integrity of the real estate transaction process, to the detriment of the individual buyer and seller–the consumer,” ARELLO warned.


Send tips or a letter to the editor to or call (510) 658-9252, ext. 124.

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