NJ Realtors® has worked to keep banks out of real estate for many years.
This issue started when several of the nation’s largest banks asked the Federal Reserve Board and the Department of the Treasury to change the definition of real estate brokerage and management to “financial activities” rather than “commercial” ones. If the definition were changed, then banks would be permitted to enter into the real estate brokerage/management industry. For the past two centuries Congress has mandated the separation of banking and commerce and has determined that real estate is not financial in nature.
In 2007, President Bush signed a law which included a two-year provision prohibiting banks from entering the real estate brokerage, property leasing and management business.
In 2009, after the ban expired, President Obama signed the FY2009 Omnibus Appropriations Act that permanently prohibits banks from this activity.