Has the National Association of Realtors succumbed to paranoia over the prospect of national banks getting into the real estate business? Or has the association launched a deliberate campaign of misinformation to raise money for its lobbying activities?
A press release the 970,000-member organization released last week about federal banking laws appears to be so farfetched in its assertions that it suggests the folks at NAR have gone at least a little bit bonkers.
The association believes that a new federal banking rule which allows national banks to skirt state banking laws or another hypothetical rule like it could enable national banks to ignore state real estate licensing laws if they were allowed to enter the brokerage business. But the federal agency that regulates national banks has said the rule has nothing to do with real estate brokerage and couldn’t apply to real estate licensing laws.
The Federal Reserve and U.S. Treasury want to open real estate’s doors to national banks, but NAR so far has bent the government to its own protectionist point of view. Not all Realtors agree with NAR’s position, but it’s hard to dispute the effectiveness of the association’s tactics in the battle. The rule first proposed more than three years ago is still stalled and will remain in limbo until at least October.
If the rule were enacted, which seems unlikely given NAR’s opposition, there is a remote chance that federal banking regulators could try to exempt national banks from state real estate licensing laws on the same grounds on which they’ve now exempted those same national banks from state banking laws. But there’s no doubt that NAR, the national Association of Real Estate License Law Officials and consumer groups would fight tooth and nail to prevent that from happening. NAR’s analysis of how it could happen is filled with so many ifs, ands and coulds that only a long stretch of an attorney-like imagination could follow it to NAR’s conclusion.
Consumer and industry groups, including NAR, have raised legitimate objections to the federal rule that preempts national banks from state banking laws. But no one other than NAR has suggested that the rule or another one like it could permit national banks to avoid state realty licensing laws if they could engage in real estate brokerage. What’s more, national banks are still subject to strict federal banking laws while no such comparable regulatory structure for real estate exists at the federal level.
The banking industry’s attempt to crash the real estate party has created enmity between NAR and the American Bankers Association, and both groups have used publicity stunts to rally their members to their cause. But NAR’s recent pronouncement is really over the top. An ABA executive said NAR must be either “paranoid” or “legally incompetent” to have concluded that the new banking rule had anything whatsoever to do with real estate.
So what’s really going on? Is NAR paranoid or legally incompetent? More likely, the folks in Chicago and Washington, D.C., have just been really clever. If a mostly meritless argument rouses Realtors to write fat checks to the Realtors Political Action Committee in a Presidential election year, who cares if the argument is misleading and ignores a few facts? And if a press release can persuade a few news outlets to publicize NAR’s illogical conclusions and tacitly support the plot to get more RPAC money, so much the better, right?
Realtors deserve better than an emotionally charged misinformation campaign from their own association.
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