Real Estate Battle Ends with Whimper

By Rob Blackwell

 

After an eight-year fight that seemed ripe to continue in perpetuity, the battle for banks to engage in real estate brokerage ended quietly Tuesday, with bankers conceding defeat and the National Association of Realtors largely refusing to discuss the matter. In these days of financial crisis, it is hard to remember a time when this issue was anything other than a footnote, but as recently as a few years ago it was the subject of congressional hearings and fierce accusations on both sides. But by Tuesday, Congress was poised to pass an appropriations bill that would permanently ban the Treasury Department and Federal Reserve Board from finalizing a 2000 proposal to let banks into the brokerage business. The American Bankers Association, which had led the crusade against the provision for years and had succeeded in changing it to a series of one-year delays, acknowledged that it had given up. Industry observers said it made sense for the ABA to give up, especially given the pressing problems of today. “As the mood shifted, the efforts of banks to defend this — and the degree of political capital the industry is using on everything else — left them unwilling to fight on this political loser,” said Karen Shaw Petrou, managing partner of Federal Financial Analytics Inc.

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