jsilver at ncrc.org
05-23-2002, 09:00 PM
***
Embargoed Until 10:00 a.m., May 23, 2002
Contact: John Taylor (202) 628-8866
Internet Address: *www.ncrc.org (for complete copy of the testimony)
NCRC Testifies in Opposition to Banks Engaging in Real Estate Brokerage
Concern Raised Over Consumer Protections and Commitment to Our Communities
WASHINGTON, DC‹May 23, 2002‹The National Community Reinvestment Coalition today testified before the Senate Banking Subcommittee on Financial Institutions in support of legislation that would prevent banks from entering real estate brokerage and property management. *Both the House and the Senate are considering measures, which ban banks from entering the real estate business.
"Allowing banks into real estate will lead to greater consolidation of market power in the hands of a few banking conglomerates and a reduction of real estate and lending services to working class and minority communities," said John Taylor, President and CEO of NCRC.
The financial services industry has maintained that "one-stop shops" will increase competition, ultimately benefiting the consumer by increasing product choice, providing greater convenience and lower costs. *In response, Taylor testified, "Healthy competition does provide low-income and working families with more housing and lending options, and offers them alternatives to high-cost and abusive loans. *However, now that our largest banks own subprime lenders and insurance agencies, we wonder whether product choice is increasing for our communities or whether financial conglomerates are steering consumers into costly and unnecessary products, often layering one product on top of another to maximize their profits."
Mr. Taylor¹s testimony also raised concern about how existing problems within the lending, insurance and real estate markets will be addressed if these industries are further allowed to commingle. *"Predatory lending, insurance redlining and property flipping are rampant in our communities of color. *If Congress allows banks and real estate firms to combine without strengthening the consumer protection laws, our communities are more likely to be victims of scams rather than beneficiaries of greater product choice and lower prices."
NCRC reiterates our strong support for the CRA Modernization Act, H.R.865, co-sponsored by Representatives Barrett, Gutierrez, and 35 other members of Congress. *The CRA Modernization Act would update CRA in several critical ways such as extending CRA to independent mortgage companies, insurance firms, and securities companies. *Any further powers for banks must be accompanied by a strengthening of the Community Reinvestment Act and requiring all parts of bank holding companies to serve low- and moderate-income communities.
The National Community Reinvestment Coalition is a national not-for-profit with over 700 membership organizations with constituents in every state in the country. *The Coalition has spearheaded a proactive community reinvestment movement with the goal of ending discriminatory banking practices and increasing the flow of private capital and credit into traditionally underserved communities.
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Embargoed Until 10:00 a.m., May 23, 2002
Contact: John Taylor (202) 628-8866
Internet Address: *www.ncrc.org (for complete copy of the testimony)
NCRC Testifies in Opposition to Banks Engaging in Real Estate Brokerage
Concern Raised Over Consumer Protections and Commitment to Our Communities
WASHINGTON, DC‹May 23, 2002‹The National Community Reinvestment Coalition today testified before the Senate Banking Subcommittee on Financial Institutions in support of legislation that would prevent banks from entering real estate brokerage and property management. *Both the House and the Senate are considering measures, which ban banks from entering the real estate business.
"Allowing banks into real estate will lead to greater consolidation of market power in the hands of a few banking conglomerates and a reduction of real estate and lending services to working class and minority communities," said John Taylor, President and CEO of NCRC.
The financial services industry has maintained that "one-stop shops" will increase competition, ultimately benefiting the consumer by increasing product choice, providing greater convenience and lower costs. *In response, Taylor testified, "Healthy competition does provide low-income and working families with more housing and lending options, and offers them alternatives to high-cost and abusive loans. *However, now that our largest banks own subprime lenders and insurance agencies, we wonder whether product choice is increasing for our communities or whether financial conglomerates are steering consumers into costly and unnecessary products, often layering one product on top of another to maximize their profits."
Mr. Taylor¹s testimony also raised concern about how existing problems within the lending, insurance and real estate markets will be addressed if these industries are further allowed to commingle. *"Predatory lending, insurance redlining and property flipping are rampant in our communities of color. *If Congress allows banks and real estate firms to combine without strengthening the consumer protection laws, our communities are more likely to be victims of scams rather than beneficiaries of greater product choice and lower prices."
NCRC reiterates our strong support for the CRA Modernization Act, H.R.865, co-sponsored by Representatives Barrett, Gutierrez, and 35 other members of Congress. *The CRA Modernization Act would update CRA in several critical ways such as extending CRA to independent mortgage companies, insurance firms, and securities companies. *Any further powers for banks must be accompanied by a strengthening of the Community Reinvestment Act and requiring all parts of bank holding companies to serve low- and moderate-income communities.
The National Community Reinvestment Coalition is a national not-for-profit with over 700 membership organizations with constituents in every state in the country. *The Coalition has spearheaded a proactive community reinvestment movement with the goal of ending discriminatory banking practices and increasing the flow of private capital and credit into traditionally underserved communities.
This post transferred from the cdb-l mailing list