The National Association of Realtors has some one million members and a huge political action committee, but what it does not have is the ability to prevent the further swelling of the federal government.

This is not a criticism of NAR, rather it's a reflection of our emerging national reality: State government is now allowed to oversee whatever it is that the federal government does not want to regulate, control or tax -- a list which seems to grow shorter each month.

So when the question arose as to whether national banks could broker real estate as a by-product of their federal charters, when it was asked if national banks could avoid the inconvenience of state regulation, the answer from Washington was pre-ordained: Of course.

According to OpenSecrets.com, NAR has the best-funded political action committee in the 2003-2004 election cycle while the National Association of Home Builders ranks third.

Brokers, builders and mortgage bankers are doing what you're supposed to do according to the civics texts: Make your case in Washington. Support your backers. Show your numbers.

But while it has long been said that "all politics is local," that is no longer the case. The major drivers of political action in Washington are; first, the willingness to spend someone else's money; and, second, the expansion of your fiefdom. As to state governments, they're conveniently trumped by endlessly-expanding federal powers, an expansion which distorts the meaning and intent of our founding documents and thinking.

It was hardly a surprise when the U.S. Office of the Comptroller of the Currency (OCC) -- "the administrator of national banks" -- exempted its charges and their operating subsidiaries from state consumer protection and lending laws. Why not? The ruling effectively gives OCC more to do plus it makes a client industry happy.

One can argue that brokers and builders are driven by narrow self-interest -- as if bankers are not. But what about all 50 state governors? Real estate regulators? AARP? The Consumer Federation of America? The National Conference of State Legislatures? They too opposed the OCC decision.

Does anyone associate the emergence of multi-state banking Goliaths during the past few years with better service? Lower fees? Reduced ATM costs? More branches? More jobs?

In every state we have real estate regulators. You may agree or disagree with given decisions and policies, but such regulators are local, accountable and have the power to fine, suspend and revoke realty licenses -- the ability to limit or end someone's ability to earn a living. You can meet with regulators, use them to file complaints against brokers and agents and toss out the politicians who appointed them -- which means you can ultimately toss out the regulators as well.

The events on Wall Street in recent years are instructive. If not for New York state attorney general Eliot Spitzer, who would protect the public trust? Where were federal regulators? What's been the reaction to Spitzer's efforts? An immediate attempt to limit state regulation even further.

The OCC decision fails to protect the public interest because it removes regulatory authority from the states where it has rested for decades; benefits a relative handful of financial behemoths; creates different rules for the same services; and will inevitably lead to the tying of mortgage loans and trust services to in-house broker representation -- a banking advantage independent brokers will be unable to contest. In the end, there will be fewer local brokers, less competition and higher costs -- the very scenario we see in banking itself under such oversight as the OCC now provides.

It's now up to Congress and the courts to overturn what the OCC has wrought, but the real issue has little to do with regulation or the best interests of consumers. Instead, again, we have a growing central government, declining state authority and a public that will soon require 800 numbers to speak with "local" executives.

For more articles by Peter G. Miller, please press here.

Published: April 13, 2004

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Peter G. Miller, also known as OurBroker®, is the author of six real estate books -- including The Common-Sense Mortgage -- and is the original creator and host of America Online's Real Estate Center. Peter's weekly columns appear in more than 100 newspapers nationwide, he is also published in a variety of other media outlets and he is a frequent speaker at national events and conventions. Peter welcomes your questions, comments, and news releases via e-mail at .