NAR Board of Directors approves credit union and other actions

LAS VEGAS – Nov. 20, 2007 – The National Association of Realtors®’ (NAR) Board of Directors, at its meeting on Nov. 16 in Las Vegas, took actions that guide it through the coming year.

The board gave NAR the go-ahead to launch a Realtor-friendly credit union. The credit union, which will be Internet-based with U.S. call center operations, will use underwriting standards that recognize the irregular commission-based income of real estate professionals. It will handle loan applications and account transactions on a 24/7 basis.

All earnings will flow back to credit union members in the form of beneficial interest rates and dividends.

To get the process started, the board asked NAR staff to file a credit union charter application with the National Credit Union Administration and provided $10 million in start-up capital. It also authorized $5 million to be available on an as-needed basis to meet regulatory capital contingencies.

Legislative

The board also positioned NAR on a number of national issues:

• Affordable housing. Declared support for a national affordable housing trust fund that doesn’t take away from other federal, state and local housing programs, or negatively impact real estate prices, transaction fees or loan costs.

• Risk-based pricing for home loans. Supported FHA risk-based pricing with the caveat that the new flexibility not leave traditional FHA borrowers at a disadvantage for financing.

• 1031 exchanges. Opposed changes to like-kind exchange tax rules that would make certain types of property ineligible (swapping improved real estate with unimproved agricultural real estate.)

• Carried interest. Opposed tax rule changes that would convert the carried interest in a real estate partnership of the general partner from a capital gains rate to an ordinary income rate.

• Accessible housing. Supported voluntary (rather than mandatory) “visitability” requirements. Visitability refers to making homes accessible to visitors with mobility impairments.

• Flood insurance. Supported adding wind damage to coverage under the National Flood Insurance Program, among other land use policy changes.

Code of Ethics Rule changes

The board amended the NAR Code of Ethics to ensure that the “true picture” test in Article 12 applies to electronic communications such as e-mail and text messages; and it added a Standard of Practice to ensure that Realtors present a true picture in their URLs and domain names.

The Code of Ethics changes required passage by the Delegate Body, which approved the measure at its meeting following the Board of Directors. Related changes to model MLS rules were also adopted.

The board also authorized Realtor MLSs to impose financial penalties of up to $15,000 — an increase from $5,000 — for violations of MLS rules; authorized Realtor MLSs to remove any or all of a participant’s listings in cases where the participant fails to report status changes on a timely basis; and adopted measures on the procedures for imposing discipline.

The board also renamed the “Standards of Conduct for Realtor Associations.” The new name is “Professional Practices for Realtor Association Leadership.” It directed NAR to increase awareness of the practices, which cover ethics and business practices among volunteers and staff leaders.

Additional board steps

The Board approved $475,617 for five legal cases involving questionable infrastructure improvements required of subdivision developers, an ongoing Internet mapping patent infringement case, the validity of a listing agreement with an incomplete property legal description, an ongoing challenge against a municipality’s real estate transaction ordinances, and the legality of excluding exclusive agency listings in MLS feeds to broker and other listing Web sites.

The board referred back to the Nominating Committee for further consideration a proposed package of changes to the procedures for electing national officers. The proposed changes are expected to be considered for a vote at the Board of Directors meeting at the 2008 NAR Midyear Legislative Meetings in Washington.

Reports from leadership

• Getting more young practitioners involved. 2008 President Richard F. “Dick” Gaylord highlighted the need to reach out to younger practitioners in the industry and showcased NAR’s efforts to recognize younger members through the Young Professionals Network, a newly formed organization that grew out of Realtor Magazine’s annual “30 under 30” feature.

• NAR on strong financial footing. The board heard an upbeat report on the financial health of the association, which has now reached 1.4 million members and has $300 million in total assets, $247 million in total equity and $218 million in its investment portfolio. The association’s only debt, $25.5 million, is for its Washington, D.C., building. That debt is being paid down quickly, said NAR Treasurer Bruce Wolf.

• Gearing up for election year. With 2008 national elections nearing, the Realtors Political Action Committee (RPAC) is well positioned with more than $7.2 million in contributions for 2007. The total includes $6.7 million from states – 109 percent of the fair share goal – as well as $282,000 from the 160 members of the President’s Circle; $26,000 from NAR’s affiliated societies, institutes and councils; and $20,000 from NAR staff, said RPAC Fundraising Chair Marbury Little.

• Realtor.com meets iPhone. Errol Samuelson, president of Realtor.com, reported to the board on innovations to the Realtor-owned site, which today hosts an average of 4.3 million listings a day and sees monthly traffic of about 5 million to 6 million consumers. The site now has an interface for the popular Apple iPhone digital device and has rolled out an enhanced “Find a Neighborhood search feature” that enables consumers to search by the kind of neighborhood they’re looking for, such as “family friendly” or “hip and cool.” The search results provide detailed information through maps, photos, and narrative descriptions posted by residents.

Awards

The board recognized the 2007 Distinguished Service Award winners, Henry Ray, CRB, CRS, GRI, of Birmingham, Ala., and George Peek, GRI, of Reno, Nev.; and the William R. Magel Award for outstanding Realtor association executive, Benny McMahan, GRI, of the Texas Association of Realtors. The 2007 Terry McDermott Community Leadership Award went to Carol Shapiro, Eastern Middlesex (Mass.) Association of Realtors.

Delegate body actions

In addition to approving the change to Article 12 of the Code of Ethics, the NAR Delegate Body approved the following amendments to the NAR Constitution:

• Increase size of the Executive Committee to allow for two representatives from the Real Estate Services Advisory Board.
• Make the Member Mobilization chair a member of the NAR board of directors.
• Make the vice chair of the Finance Committee’s Subcommittee on Reserves Investment a member of the Finance Committee.

Source: Realtor Magazine Online

© 2007 FLORIDA ASSOCIATION OF REALTORS

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