At press time, the House was nearing a final vote on an omnibus spending package for the remainder of fiscal year 2003. The Senate was expected to take up the bill by February 14.
The massive ($397.4 billion) budget bill apparently will include language doggedly sought by the real estate industry to prohibit the Treasury Department from using any FY 03 funds to issue a rule on whether real estate brokerage and management activities are financial in nature. This rule stems from 1999's Gramm-Leach-Bliley Act, which included joint Treasury-Fed rulemaking authority to determine if financial holding companies and national bank subsidiaries could expand their real estate activities. In late 2000, the agencies issued a joint rule for comment that would allow such expansion, but regulators have since delayed a final decision primarily due to fervent objection from the real estate industry's chief advocacy group, the National Association of Realtors.
ICBA and other financial services trade groups sought to keep this language out of the budget bill, but the realtors have waged an unrelenting lobbying effort and eventually gained key support from Senate Appropriations Committee Chairman Ted Stevens (R-AK) and Senate Banking Committee Chairman Richard Shelby (R-AL). House Banking Committee Chairman Mike Oxley (R-OH) strongly opposed this maneuver. The House had previously added the provision to the FY 03 Treasury Appropriations measure.
The realtors may have won a Pyrrhic victory. Before the final congressional action, Treasury Secretary John Snow had informed congressional leaders that the Treasury and the Fed would not turn to this issue until after the 2004 presidential elections. So the realtors marched up the hill and took no prisoners on an issue that the administration and the Fed had deferred. Come 2005, when the Treasury and the Fed return to this issue-assuming they decide it favorably, as was the clear intent of Gramm-Leach-Bliley-a real-time battle will ensue with sour memories of a premature 2003 fight.