For a long time the biggest real estate rumble in Washington D.C. has concerned the question of whether or not banks should be allowed to offer real estate services. Having expanded into stocks, bonds and insurance, many national bankers now want to offer real estate brokerage services. In turn, real estate brokers have generally opposed bankers invading their territory in large measure because they fear being crowded out by well-funded rivals.
Under the Gramm-Leach-Bliley Financial Services Modernization Act of 1999 banks are able to create “financial holding companies,” entities with virtually unlimited portfolios. The Senate Banking Committee explains that under Gramm-Leach-Bliley a bank holding company “can engage in a statutorily provided list of financial activities, including insurance and securities underwriting and agency activities, merchant banking and insurance company portfolio investment activities. Activities that are ‘complementary’ to financial activities also are authorized.”
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