A new rule by the U.S. Office of the Comptroller of the Currency that exempts national banking conglomerates from state consumer protection and lending laws harms consumers, small business and the local real estate community, the National Association of Realtors said Wednesday.
NAR joined the National Association of Attorneys General, the U.S. Conference of State Banking Supervisors, the Consumer Federation of America and U.S. Reps. Barney Frank (D-Mass.) and Luis Gutierrez (D-Ill.) at a press conference Wednesday in opposition to the rule.
The OCC adopted a regulation Feb. 12 that allows national banks by virtue of their federal charter to ignore state banking, advertising, privacy and insurance laws designed to protect consumers from predatory lending and other abusive banking practices. It also puts local real estate companies at a significant competitive disadvantage when compared to national banks and their operating subsidiaries, which no longer have to comply with state regulations. The rule has already been the subject of a congressional hearing and a budget amendment, with more hearings scheduled next month.
“NAR is extremely troubled by the OCC’s broad preemption of state consumer protection laws, which we maintain goes well beyond the agency’s supervisory powers spelled out by Congress,” said NAR President Walt McDonald, broker-owner of Walt McDonald Real Estate in Riverside, Calif. “Realtors have long been concerned about the detrimental effects on home buyers, local communities and small businesses when so many financial institutions consolidate into a handful of huge national banking conglomerates. Our consumer concerns were heightened when the OCC, which derives its funding from national bank fees, finalized a rule that favors banking conglomerates over the objection of consumers, local businesses, states and many members of Congress.”
“There’s no doubt that the OCC rule puts consumers at the mercy of more bank consolidation with fewer protections and less oversight,” McDonald said. “Under this rule, consumers are forced to turn to a federal regulator who is not even listed in their local phone book for protection from abusive lending practices by national banks. Realtors will continue to work with Congress to oppose the OCC rule and any other power grabs by national banks that are bad for consumers, bad for homeowners, bad for small businesses and bad for real estate.”
The National Association of Realtors is a trade association representing 1 million members.
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