by Marcie Geffner
Inman News
The Bush Administration wants to co-opt real estate brokers into helping the government fight its “war on terrorism” on the home front. The proposals are misguided, and brokers should applaud the National Association of Realtors’ efforts to block adverse impacts on realty businesses.
The government’s chief weapon in the domestic “war on terrorism” is the U.S Patriot Act, which was enacted with strong Congressional support after the Sept. 11, 2001, terrorist attacks on the Pentagon and the World Trade Center in New York City. The Patriot Act broadened the U.S. Justice Department’s authority to investigate a wide variety of activities that the government believed possibly could be connected to terrorists or terrorist groups operating in the United States.
The Patriot Act wisely better coordinated law enforcement efforts against domestic terrorism, but it also unwisely gave the government intrusive new powers to snoop into personal activities. U.S. Attorney General John Ashcroft is delivering a dozen speeches around the country to counteract civil liberties groups’ criticism of the Patriot Act. The law itself is under fire and has become “almost a dirty word in some circles,” according to a New York Times story last week.
Two regulatory proposals that surfaced directly from the Patriot Act were of particular concern to real estate brokers: A Treasury Department regulation would require “financial institutions” that include “persons involved in real estate closing and settlements” to establish anti-money laundering programs. An Immigration and a Naturalization Services regulation would have halved the maximum amount of time visiting foreigners could stay in the United States.
NAR’s position on the money laundering regulation is that real estate licensees shouldn’t be considered to be “financial institutions” for purposes of the Patriot Act. The association’s reasoning is that licensees don’t receive or distribute money for home buyers and sellers other than holding an earnest money deposit. “The burden of compliance by licensees would likely outweigh any benefit in terms of detecting money-laundering schemes,” the association stated in a position paper on the subject.
The INS shortened stay regulation was worrisome for Realtors who sell homes in resort and vacation markets that attract large numbers of foreign nationals. This regulation wouldn’t have imposed compliance duties on Realtors; however, it would have made the purchase of homes in the United States less attractive for foreign nationals coming to the country on extended business or vacation trips.
“These changes could have a devastating effect on the real estate industry...Foreign homeowners purchase property in (resort and retirement) communities because they know with certainty that they can visit these properties. To restrict visitation or to create the perception that visitation may be limited will have a negative impact on the ability of the real estate professional to sell these properties,” the association stated in a position paper.
NAR argued that INS rules already recognized homeownership as a legitimate reason for maximum and extended visits into the country and the existing rules shouldn’t be altered. The INS formally withdrew the proposal on February 28, 2003, after officials met with representatives from NAR, the travel industry and other concerned groups.
No one questions the real threat of terrorism on domestic soil. And few would argue that the entire Patriot Act is wholly without any merit whatsoever in helping the government identify, stop and prosecute terrorists at home. But the burdens the Treasury and INS regulations would place on real estate brokers would be overly costly and wouldn’t provide a significant benefit to law enforcement authorities.
That’s why NAR’s no positions are right on the money.
The association is a political powerhouse that has sided with the Bush Administration on other initiatives, most especially an effort to spur minority homeownership. Taking a position against sections of the Patriot Act demonstrates the association’s independence and counters the myth that Realtor associations are always in accord with the Republican agenda.
Fight on, NAR.