[Congressional Record Volume 155, Number 18 (Thursday, January 29, 2009)]
[Senate]
[Page S1067]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. BOXER (for herself and Mr. Burr):
  S. 356. A bill to amend the Bank Holding Company Act of 1956 and the 
Revised Statutes of the United States to prohibit financial holding 
companies and national banks from engaging, directly or indirectly, in 
real estate brokerage or real estate management activities, and for 
other purposes; to the Committee on Banking, Housing, and Urban 
Affairs.
  Mrs. BOXER. Mr. President, I rise today to introduce the Community 
Choice In Real Estate Act of 2009. I am pleased to have Senator Burr 
join me in introducing this bill. In previous Congresses, this bill was 
introduced by former Senators Allard and Clinton, and I am happy to 
continue their efforts.
  The Community Choice in Real Estate Act of 2003 would clarify 
Congressional intent that real estate brokerage and management are not 
financial activities and would therefore retain the separation of 
commerce and banking that was intended during consideration of the 
Gramm-Leach-Bliley Act.
  The Gramm-Leach-Bliley Act got many things wrong when it repealed the 
firewall between the activities of banks and those of the stock market, 
bonds and insurance and allowed these institutions to engage in riskier 
activities. But one thing that it did get right was maintaining the 
firewalls separating the financial and commercial sectors.
  We already have seen the damage to our economy and real estate market 
caused when banks began to engage in certain previously prohibited 
activities. If the firewall separating banking and commerce also were 
to be torn down, it would further undermine banks' ability to be 
neutral arbiters of capital and lend based on financial principles and 
without bias. The S&L crisis of the 1980's has already shown us what 
can happen when federal rules keeping financial services separate from 
commercial activities are weakened.
  Real estate brokerage and management have always been considered by 
Congress to be commercial transactions, and not financial matters. This 
was further reflected when Congress specifically chose not to include 
real estate activities as one of the powers given to national banks and 
financial holding companies as part of Gramm-Leach-Bliley.
  However, following the passage of that Act, the Federal Reserve and 
the Treasury Department proposed rules in response to a petition by 
some financial services entities that would have allowed them to own 
and operate local real estate brokerage and property management 
companies.
  Since fiscal year 2003, Congress has included language in the annual 
appropriations bill for the Treasury Department to prevent the use of 
funds to implement these regulations. These have only been temporary 
fixes, however, and we ought to resolve this issue once and for all in 
the 111th Congress.
  I urge my colleagues to support this legislation.
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