Realtors upset about banks' real estate development plans

Brought to you by

Realtors upset about banks' real estate development plans Trade group will seek details through Freedom of Information Act Tuesday, January 10, 2006 Inman News

Watchful of efforts to expand banks' presence into real estate brokerage services, the National Association of Realtors today announced that it is questioning bank-related real estate development projects approved in December by the U.S. Office of the Comptroller of the Currency. This latest saber-rattling focuses on real estate development projects by Bank of America and PNC Financial Services Group Inc. The Realtor trade group plans to file a Freedom of Information Act request "to determine whether the OCC has quietly authorized other banks to engage in real estate activities that may violate the letter or spirit of (the Gramm-Leach-Bliley Act), as well as the National Bank Act, and bring banks one step closer to engaging in commercial real estate brokerage," according to the announcement today. Realtors have been lobbying aggressively for several years to block Congress from allowing federally chartered financial institutions from engaging in real estate brokerage services. Meanwhile, supporters of federal banks' entry into real estate have said that several real estate brokerage companies already offer financial services related to real estate transactions. Bank of America and PNC Financial Services Group Inc. received permission from the OCC in December for two real estate projects, according to the Realtor announcement. "PNC will invest $122 million in a complex near its headquarters that will include a 30-story building for offices, a 150-room hotel and 32 condominiums. PNC employees are projected to occupy 22 percent of the new office and hotel space. Bank of America plans to develop and own a 150-room, 15-story Ritz-Carlton hotel as part of its headquarters complex in Charlotte, N.C., and to use more than 37.5 percent of the rooms on an annual basis," the Realtor group reported. A PNC spokesman was not immediately available for comment today. The association is worried that such projects could bring banks "closer to controlling commercial real estate projects from top to bottom," according to the announcement. The National Association of Realtors has opposed a rule proposed by the Federal Reserve and the Treasury Department in 2001 that would have allowed federally chartered national bank conglomerates to enter residential and commercial real estate brokerage and property management. Realtors have pushed Congress to pass legislation blocking a final rule in every year since.