S. 413 - Community Choice in Real Estate Act

110th CONGRESS
1st Session

S. 413

To amend the Bank Holding Company Act of 1956 and the Revised Statutes of the United States to prohibit financial holding companies and national banks from engaging, directly or indirectly, in real estate brokerage or real estate management activities, and for other purposes.

IN THE SENATE OF THE UNITED STATES

January 26, 2007

Mrs. CLINTON (for herself, Mr. ALLARD, Mr. BINGAMAN, Mr. FEINGOLD, Ms. CANTWELL, Mr. BROWN, Mr. SANDERS, Mr. ENSIGN, Mr. HARKIN, Mr. LIEBERMAN, Mr. SHELBY, Mr. BURR, and Ms. SNOWE) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Community Choice in Real Estate Act' .

SEC. 2. CLARIFICATION THAT REAL ESTATE BROKERAGE AND MANAGEMENT ACTIVITIES ARE NOT BANKING OR FINANCIAL ACTIVITIES.

(a) Bank Holding Company Act of 1956- Section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)) is amended by adding at the end the following new paragraph:

`(8) REAL ESTATE BROKERAGE AND REAL ESTATE MANAGEMENT ACTIVITIES-

`(A) IN GENERAL- The Board may not determine that real estate brokerage activity or real estate management activity is an activity that is financial in nature, is incidental to any financial activity, or is complementary to a financial activity.

`(B) REAL ESTATE BROKERAGE ACTIVITY DEFINED- For purposes of this paragraph, the term `real estate brokerage activity' means any activity that involves offering or providing real estate brokerage services to the public, including--

`(i) acting as an agent for a buyer, seller, lessor, or lessee of real property;

`(ii) listing or advertising real property for sale, purchase, lease, rental, or exchange;

`(iii) providing advice in connection with sale, purchase, lease, rental, or exchange of real property;

`(iv) bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property;

`(v) negotiating, on behalf of any party, any portion of a contract relating to the sale, purchase, lease, rental, or exchange of real property (other than in connection with providing financing with respect to any such transaction);

`(vi) engaging in any activity for which a person engaged in the activity is required to be registered or licensed as a real estate agent or broker under any applicable law; and

`(vii) offering to engage in any activity, or act in any capacity, described in clause (i), (ii), (iii), (iv), (v), or (vi).

`(C) REAL ESTATE MANAGEMENT ACTIVITY DEFINED- For purposes of this paragraph, the term `real estate management activity' means any activity that involves offering or providing real estate management services to the public, including--

`(i) procuring any tenant or lessee for any real property;

`(ii) negotiating leases of real property;

`(iii) maintaining security deposits on behalf of any tenant or lessor of real property (other than as a depository institution for any person providing real estate management services for any tenant or lessor of real property);

`(iv) billing and collecting rental payments with respect to real property or providing periodic accounting for such payments;

`(v) making principal, interest, insurance, tax, or utility payments with respect to real property (other than as a depository institution or other financial institution on behalf of, and at the direction of, an account holder at the institution);

`(vi) overseeing the inspection, maintenance, and upkeep of real property, generally; and

`(vii) offering to engage in any activity, or act in any capacity, described in clause (i), (ii), (iii), (iv), (v), or (vi).

`(D) EXCEPTION FOR COMPANY PROPERTY- This paragraph shall not apply to an activity of a bank holding company or any affiliate of such company that directly relates to managing any real property owned by such company or affiliate, or the purchase, sale, or lease of property owned, or to be used or occupied, by such company or affiliate.

`(E) CURRENT ACTIVITIES NOT AFFECTED- No provision of this paragraph, or any determination made pursuant to any such provision, may be construed as prohibiting, restricting, altering, or otherwise affecting, the right, power, or ability of any financial holding company to engage in any activity, or acquire or retain the shares of any company engaged in an activity, if engaging in such activity, or acquiring or retaining such shares, was authorized for financial holding companies on December 6, 2001.'.

(b) Revised Statutes of the United States- Section 5136A(b) of the Revised Statutes of the United States (12 U.S.C. 24a(b)) is amended by adding at the end the following new paragraph:

`(4) REAL ESTATE BROKERAGE AND REAL ESTATE MANAGEMENT ACTIVITIES-

`(A) IN GENERAL- The Secretary may not determine that real estate brokerage activity or real estate management activity is an activity that is financial in nature, is incidental to any financial activity, or is complementary to a financial activity.

`(B) DEFINITIONS- For purposes of this paragraph, the terms `real estate brokerage activity' and `real estate management activity' have the same meanings as in section 4(k)(8) of the Bank Holding Company Act of 1956.

`(C) EXCEPTION FOR COMPANY PROPERTY- This paragraph shall not apply to an activity of a national bank, or a subsidiary of a national bank, that directly relates to managing any real property owned by such bank or subsidiary, or the purchase, sale, or lease of property owned, or to be owned, by such bank or subsidiary.

`(D) CURRENT ACTIVITIES NOT AFFECTED- No provision of this paragraph, or any determination made pursuant to any such provision, may be construed as prohibiting, restricting, altering, or otherwise affecting, the right, power, or ability of any national bank, or a subsidiary of a national bank, to engage in any activity, or acquire or retain the shares of any company engaged in an activity, if engaging in such activity, or acquiring or retaining such shares, was authorized for national banks, or subsidiaries of national banks, on December 6, 2001.'.

END