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Real Estate


Tom Kelly
Tom Kelly
The Real Estate Adviser
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June 7, 2001

Should banks be allowed to sell real estate?

You can mention the Gramm-Leach-Bliley Act in a crowd of real estate professionals OR bankers, just not in mixed company. The debate whether banks should be permitted to enter real estate brokerage can bring lengthy and fiery debate. “GLB” authorized the Federal Reserve and Treasury Department to define permissible activities for financial holding companies. Those agencies have recently proposed allowing banking institutions to engage in real estate brokerage and management. The banking industry supports this proposal, which it believes will increase competition and choice for consumers and enable banks to round out their services. The National Association of Realtors opposes it, arguing sellers and financers should be separate and independent.

However, the banks-in-brokerage issue is only a portion of the huge GLB package. The act, also known as “The Financial Services Modernization Act,” imposes specific new federal privacy obligations on companies conducting financial transactions with consumers that go into effect July 1, 2001.


 
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