The proposed new rule would declare real estate brokerage, real estate management, and employee relocation to be activities that are "financial in nature" or "incidental to a financial activity.". This would allow financial holding companies and national bank subsidiaries to enter these businesses.

Spurred by the 1929 market crash and in the belief that stock market speculation by the banks led to their collapse, the 1933 Banking Act sought to restore confidence in the banking system. In a section called the Glass-Steagall Act, it forced the separation of commercial and investment banking.

Since the 1980's there has been extensive debate about the shortcomings of the Glass-Steagall Act and, over the last two decades, The Board of Governors of the Federal Reserve System and the Secretary of the Treasury have softened some of the act's separation provisions. The proposed legislation would remove the separation of commercial and investment banking entirely.

In opposition to this legislation is the National Association of Realtors® (NAR), claiming that the consumer would be the ultimate loser if financial institutions entered the real estate brokerage industry. NAR fears that a few large financial institutions would dominate the industry, resulting in less competition and higher costs.

Supporting this legislation is the American Bankers Association (ABA), which contends that the benefit for the consumer is access to greater choice and healthy competition. ABA further feels that it could simplify the real estate brokerage process and introduce the convenience of true one-stop-shopping for the consumer.

A new white paper released today entitled "Real Estate confronts the Banks" is by far the most comprehensive and objective research published about this controversial topic. The white paper was written by Stefan Swanepoel, Dennis Galloway and Kenneth Jenny, and follows on an already established successful track record of three previous publications: "Real Estate confronts Reality" (1997), "Real Estate confronts Technology" (1999) and "Real Estate confronts the e-Consumer" (2000).

According to the authors, the purpose of the white paper is to provide both the banking industry and the real estate industry with a "plain text" synopsis of the facts and discussions surrounding this pending legislation. Contrary to previous studies published recently, Swanepoel says that the intent of this white paper is not to promote one specific viewpoint above another but rather to provide a more objective overview detailing the major view points. The authors have endeavored to do so in an objective and balanced manner, highlighting both the positive and negative of each viewpoint and commenting, where deemed appropriate, to suggest possible counter arguments.

The white paper is published by RealSure, Inc., a strategic development and implementation company, and can be downloaded as a an Adobe PDF file from their website www.RealSure.com by clicking here.

Rebuz