(WASHINGTON, DC) - The National Association of Realtors® in a letter to Federal Reserve Board Chairman Ben Bernanke has expressed deep concern over GMAC's application for bank holding company status.
"NAR continues to support the separation of banking and commerce," said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth.
"During this time of economic uncertainty, we can't risk a departure from the one element of our regulatory system that has worked."
NAR has consistently maintained the need to keep the lines between banking and commerce clear and unambiguous. GMAC's renewed effort, if successful, would be a dangerous precedent that would inevitably lead to the erosion of the separation of banking and commerce.
"The risk is too high, and the reward too dubious for GMAC's application to be approved. Given the serious problems facing the nation's financial system, now is the time to enhance stability, not undermine it," said McMillan.
Because banks play a unique role in the nation's financial system, Congress established a national policy against mixing banking and commerce.
"This policy is meant to keep banks focused on the business of banking, as well as to protect the overall economy from commerce activities that may go awry," said McMillan. "The current condition of the auto industry just reinforces the need to separate banking and commerce. When these activities mix, it creates risks to the security and vitality of our financial system and can also negatively impact competition on many fronts. It is imperative for GM to completely divest of GMAC before this application is granted consideration, or the application should be disapproved."
NAR will closely follow this application as well as any other attempts to mix commerce and banking.