The National Association of Realtors trade group is asking Ben Bernanke, the new chairman of the Federal Reserve Board, to oppose Wal-Mart’s pending application to the Federal Deposit Insurance Corp. for an industrial loan company charter.
“NAR strongly believes that Wal-Mart’s effort to obtain a federally insured (charter) will establish a dangerous precedent that will inevitably lead to an erosion of the separation of banking and commerce,” said Thomas M. Stevens, NAR president, in the letter to Bernanke.
“We see serious consequences for the continued stability and growth of the nation’s financial system if the FDIC approves the application. Accordingly, we ask that, early in your term, you actively oppose approval by the FDIC of deposit insurance for the proposed Wal-Mart ILC,” he stated.
Stevens’ letter charges that banks that were created by commercial firms operate “under an inherent and irreconcilable conflict of interest.”
NAR also has aggressively opposed efforts by banks to engage in real estate brokerage and real estate development activities. The association has aggressively lobbied Congress to pass legislation for the past four years that blocks the issuance of a Federal Reserve Board-Treasury Department rule that would permit financial holding companies and financial subsidiaries to engage in real estate brokerage and management.
“NAR hopes that the irreconcilable clash of commercial and banking industries over these activities in different regulatory forums will compel the Federal Reserve Board to support efforts to have Congress resolve these issues through the legislative process,” according to the announcement.
“The fact that banks are involved in real estate financing and other related activities cannot be a basis for concluding that real estate brokerage and management activities are financial or related to financial activities. Such false reasoning leads to the conclusion that banking organizations may broker any product whose sale they may finance – appliances, automobiles, airplanes, artwork, etc.,” Stevens stated.
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