Last week more than 8,000 members of the National Association of Realtors® (NAR) attended its mid-year conference and meetings in Washington, D.C. Meetings of the organization's committees and board of directors formed a large part of the agenda, but the emphasis was overwhelmingly on political involvement.

Real estate is an intensely local business, and it is probably fair to say that the average real estate practitioner doesn't give much thought to the relationship between his or her business practices and political activity at a larger level. When there is awareness, it most often has to do with events at the state capitol, not Washington. This is because real estate licensing and regulation is a state, not federal, function.

Nonetheless, a few days spent at the NAR Washington meetings serves as a powerful reminder of the vast influence that federal laws and regulations may have on the day-to-day business of the average Realtor. Moreover, as has become increasingly clear to Realtors who have been paying attention to these sorts of things, many of their causes of concern arise not from the actions of legislators, but rather from the activity of unelected regulators.

The Realtors primary national legislative concern is -- and has been for five years now -- the question of allowing national banks to engage in the real estate business. It provides, for all who involve themselves in it, some fascinating, if not inspiring, lessons about the political process. At issue is a joint proposal, made in the year 2000, by the Federal Reserve Board and the Treasury Department that would allow financial holding companies and financial subsidiaries of national banks to engage in real estate brokerage and property management. NAR has argued that this would violate existing federal law, which prohibits national banks from engaging in commercial activities. Proponents of the regulation argue that real estate brokerage properly falls under the financial activities that banks are chartered to engage in.

Without going into the merits of the pro and con arguments, let it be noted that NAR has strongly supported legislation that would specifically bar national banks from engaging in real estate brokerage. That legislation was originally introduced in 2001, in response to the proposed regulations. Currently, in the 109th Congress, it is pending as H.R. 111 in the House, and as S.98 in the Senate. Both bills enjoy bipartisan support. H.R. 111 was authored by Rep. Ken Calvert (R-CA) and, by the end of last week, had over 200 cosponsors. S.98 was introduced by Sen. Hillary Clinton (D-NY) and has 16 cosponsors.

With that kind of support, one would think that the Realtor -- supported legislation would be a slam dunk.

Wrong.

It can't even get a hearing, having been (continually) bottled up in committee by Financial Services Committee Chair, Michael Oxley (R-OH).

Why the chairman can't be overridden is just one of the little political lessons to be learned here (Short answer: tradition). More intriguing is, why is Rep. Oxley so dug in on this issue? There's no clear, out-in-the-open answer available to this one, although, this year, NAR delegates were all provided with a Realty Times article by Blanche Evans entitled "Is Congressman Oxley Going After The Real Estate Industry?" The article didn't provide any "why?" answers, but it certainly made a case that Rep. Oxley is operating from a pro-bank, anti-real estate bias. NAR leaders suggested that Realtors leave copies of this article with their legislators when they made their lobbying calls.

Additionally, Realtors took to the Hill some strongly-worded complaints that the industry is growing mightily weary of continual attacks from (what NAR perceives to be) overzealous regulators at the Federal Trade Commission and the Department of Justice, whose goal seems to be that real estate services and information should pretty much be provided free to any member of the public who wants them.

A trip to our nation's capitol can be an inspiring experience, as many of the NAR delegates would attest. When you get down to issues, however, it can also expose a person to some things you might just as soon not know about. But, in the Realtors case, they are certainly things that they need to know about.

Published: May 17, 2005

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Bob Hunt is a former director of the National Association of Realtors and is author of the recently published book, "Real Estate the Ethical Way." A graduate of Princeton with a master's degree from UCLA in philosophy, Hunt has served as a U.S. Marine, Realtor association president in South Orange County, and director of the California Association of Realtors, and is an award-winning Realtor. Contact Bob at .