Washington, DC – U.S. Senators Barbara Boxer (D-CA) and Richard Burr (R-NC) introduced the Community Choice in Real Estate Act, bipartisan legislation to prevent banks from expanding their business to act as real estate brokers and managers.

Senator Boxer said, “Permitting banks to engage in commerce could compromise their lending decisions and create conflicts of interest while restricting consumer choice and competition among mortgage lenders.  In the wake of the damage caused to the financial system by deregulation and the erosion of financial firewalls, removing the separation between banking and real estate risks additional harm that we just can’t afford.”

Following the passage of the Gramm-Leach-Bliley Act in 1999, some national banks petitioned the Federal Reserve and the Treasury Department for the power to own and operate local real estate brokerage and property management companies.  In early 2001 the Federal Reserve and the Treasury proposed rules to allow national banks to move into these commercial sectors.  Since FY2003, language has been included in annual appropriations bills temporarily preventing the use of funds to implement these regulations.  The Community Choice in Real Estate Act would make that prohibition permanent.

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