Talking Points

•  The Banking Commissioner of Georgia has shared with GAR a letter dated November 3, 1997 in which he "permits" a community bank in Northwest Georgia to purchase and operate a real estate brokerage.
• The Commissioner has informed GAR's legal counsel that his decisions are not subject to public review.
• The Commissioner has also informed GAR that we did not have a right to offer input during his decision making process.
• The Commissioner requested that the community bank develop policies and procedures for operating the real estate brokerage and asked that they send him a copy. He did not require these policies as a prerequisite to permit approval but instead requested them after granting approval.
• His permit letter references that operation of the real estate brokerage "poses no significant risk to the bank." We think he is dead wrong. The Savings and Loan failures of the 1980's are directly attributable to their operation of real estate brokerage and development companies. Also, his "permit" makes no mention of consumer protections. Who is protecting the public? The only thing we know is the Banking Commissioner is not.
• The Banking Commissioner made this decision despite the fact that the Georgia Supreme Court ruled against his predecessor who had made almost exactly the same decision in regards to insurance in 1982. The former Commissioner allowed a Cobb County bank to purchase and operate an insurance agency, the Independent Insurance Agents of Georgia filed suit. The case went all the way to the Supreme Court. In a unanimous decision, Chief Justice Jordan wrote "If the power to operate a general insurance agency by State banks... is needed, the proper forum to obtain this power is the legislature, just as national banks have done with Congress."
• The Banking Commissioner announced Friday, January 11, his intention to retire from state employment so as to become the executive director of the Community Bankers Association of Georgia.
• The American Bankers Association is using Georgia as an example of why federally chartered banks should be allowed into real estate. They are claiming national banks are at a competitive disadvantage. They are not sharing with members of Congress that only one bank in Georgia has this special privilege.
• Banks enjoy special privileges, as a result of the Great Depression, the federal government set up protections to stop banks from failing. Bank investors (they call them depositors) have their investment guaranteed up to $100,000 by the Federal Deposit Insurance Corporation. Real estate investors enjoy no similar protection. Additionally, banks may borrow money from the Federal Reserve at a discounted rate, real estate firms are not permitted access to the Federal Reserve window.