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To the Members of the United States Senate:

The undersigned trade associations are writing to express our strong opposition to S. 1839, which undermines years of deliberation and work by the Congress in enacting the historic Gramm-Leach-Bliley Act (GLBA) in 1999.  S. 1839 amends GLBA to limit competition in communities in real estate brokerage and property management services.

Congress deliberated financial modernization legislation for nearly two decades.  The outcome of this deliberation was Congress' determination that a flexible regulatory framework was the best way to make certain that the new statute would resist obsolescence and adapt to innovations in the marketplace.  Consistent with this framework, the Treasury Department and Federal Reserve Board have issued a proposed regulation that would benefit consumers by authorizing subsidiaries of national banks and financial holding companies to offer real estate brokerage and property management services.  Contrary to Congressional intent, S. 1839 prohibits the regulators from completing the regulatory process set forth by GLBA.

Efforts to prevent new and innovative providers of real estate services from entering the market are anti-consumer and anti-competitive.  Increasing the number of providers in the market raises the bar for all participants by forcing improvements in efficiency, pricing, and service levels.  We firmly oppose such efforts to limit competition. 

In addition, the claim by real estate interests that there is something wrong with banks and real estate agents working together is disingenuous.  Real estate firms, such as ERA, Century 21, Long and Foster, and others, already offer the combined financial services prohibited by S. 1839, including real estate brokerage, mortgage lending, title insurance, and property insurance.  Furthermore, other depository institutions – state-chartered banks in 25 states, credit unions, and savings institutions – have the authority to engage in real estate brokerage activities.  Thus, the effect of S. 1839 is to discriminate only against subsidiaries of national banks and financial holding companies.  Moreover, such legislation is not healthy for the economy.  The marketplace cannot operate at maximum efficiency and productivity when artificial barriers are imposed by legislation.  The purpose of GLBA was to eliminate artificial barriers in the financial services industry.  We oppose efforts to turn back the hands of time by imposing new barriers in the marketplace.

Congress worked long and hard to modernize this nation's financial services industry in a manner that expands consumer choice and increases competition.  S. 1839 represents the antithesis of Congressional intent under GLBA.  The regulatory process should be allowed to proceed just as Congress intended.

Sincerely,