Why would federally chartered banks want to own (residential) brokerage companies? It's the money, my friend. As a bar chart accompanying the NYT article shows, total residential real estate commission revenue rose from $43 billion in 1998 to $54 billion in 2002. (Source: Real Trends.) And that's an attractive pot of money in today's weak economic environment.

But can you imagine worse partners than banks and brokerage firms? How could you really merge these two cultures -- one salary-based and the other commission-based? Aren't commercial banks already suffering from regulatory problems caused by aggressive IPO brokers and wheeler-dealer securities analysts?

On the other hand, why shouldn't real estate brokers take the money? According to NAR (the National Association of Realtors), that would be bad public policy. NAR argues that "the change could lead to nationwide consolidation in the industry, one that could ultimately cut competition, hurt service and drive up fees to consumers." Those are fighting words in Washington, DC. So look for this battle to continue.

Spread the Word... Thanks to Stephanie Weeks and MacMunnis for sponsoring this week's (pun intended) PikeNet Dispatch. If you'd like to sponsor future issues, send e-mail or call me at 415-485-6700.

--Peter Pike