A. Privacy Self-Regulatory Program and Member Education Campaign REALTORS® recognize that as data collection continues to become a valuable asset for building relationships with their clients, so does their responsibility to be trusted custodians of that data. Consumers are demanding increased transparency and control of how their data is used. While each state has its own definition of “Personally Identifiable Information,” for purposes of these principles “personal information” will be interpreted broadly to mean any information that can be used to uniquely identify, contact, or locate a single person or can be used with other sources to uniquely identify a single individual. For this reason, REALTORS® endorse the following Data Privacy and Security principles:
Collection of Personal Information Should be Transparent REALTORS® should recognize and respect the privacy expectations of their clients. They are encouraged to develop and implement privacy and data security policies and to communicate those policies clearly to their clients.
Use, Collection and Retention of Personal Information REALTORS® should collect and use information about individuals only where the REALTOR® reasonably believes it would be useful (and allowed by law) to administering their business and to provide products, services and other opportunities to consumers. REALTORS® should maintain appropriate policies for the reasonable retention and proper destruction of collected personal information. Data Security REALTORS® should maintain reasonable security standards and procedures regarding access to client information.
Disclosure of Personal Information to Third Parties REALTORS® should not reveal personal information to unaffiliated third parties unless 1) the information is provided to help complete a consumer initiated transaction 2) the consumer requests it; 3) the disclosure is required by/or allowed by law (i.e. investigation of fraudulent activity); or 4) the consumer has been informed about the possibility of such disclosure through a prior communication and is given the opportunity to decline (i.e. opt-out.) Maintaining Consumer Privacy in Business Relationships with Third Parties If a REALTOR® provides personal information to a third party on behalf of a consumer, the third party should adhere to privacy principles similar to the REALTOR® that provides for keeping such information secure.
Single Federal Standard NAR supports a single federal standard for data privacy and security laws in order to streamline and minimize the compliance burden.
B. Second Century Initiative Briefing
C. Legislative/Regulatory Technology Issue Updates
Data Privacy, Security & Breach Legislation Public concern about the confidentiality of personal medical, financial and consumer data has put pressure on policy makers to increase regulation on the uses of this information. The recent popularity of marketers to use online advertising targeted to individual consumers has also concerned members of Congress. To date, more than 16 data privacy and security bills have been introduced in Congress. Many of these measures would: apply privacy regulations to both online and offline data collection, storage and flow; require privacy notices and impose other information safeguards. Some bills would also permit industry to develop their own self-regulatory privacy programs that, if endorsed by the Federal Trade Commission, would create a safe harbor from regulation.
Network Neutrality Net neutrality is shorthand for the concept that Internet users should be in control of what content they view and what applications they use on the Internet. More specifically, net neutrality requires that broadband networks be free of restrictions on content, sites, or platforms. Networks should not restrict the equipment that may be attached to them, nor the modes of communication allowed on them. Finally, networks should ensure that communication is not unreasonably degraded by other communication streams.
Copyright Reform Two online piracy bills were recently introduced the Stop Online Piracy Act (SOPA) H.R. 3261 and the Protect IP Act (PIPA) S. 968. These bills have garnered a storm of media attention in the past few weeks. The bills main targets are "rogue" overseas sites like torrent hub and The Pirate Bay, which are a trove for illegal downloads of movies and other digital content. The bill would authorize the U.S. Department of Justice to seek court orders against websites accused of infringing on copyrights, or of enabling or facilitating copyright infringement. After delivering a court order, the US Attorney General could require US-directed Internet service providers, ad networks, and payment processors to suspend doing business with sites found to infringe on federal criminal intellectual property laws. The Attorney General could also bar search engines from displaying links to the sites.
These bills appear to have stalled while the interested parties on both sides of the issue seek consensus on how to move forward.
Patent Reform In 201, Congress passed legislative reforms to patent law in response to growing concerns that the patent system was unable to deal with challenges presented by the ever growing number of patent applications being submitted and increasing complexity of the technology for which a patent is being requested. In addition, the growing number of cases of licensing demands being made by holders of obscure software patents as well as number of patent lawsuits being filed pointed to the need for reform. Many in the tech industry believe that 2011's reforms did not adequately address the issue of "patent trolls" and that additional legislation is necessary to reduce the costs of litigation caused by "non-practicing patent entities."
President Obama signed the America Invents Act into law on September 16, 2011. The intent of the bill is to speed up the patent process so that innovators and entreprenuers can bring their products to market as quickly as possible. The US Patent and Trademark Office (USPTO) is now required to draft regulations needed to implement the patent reform law. These regulations will take effect over the next 12 months.
On August 1, 2012 the Saving High-Tech Innovators from Egregious Legal Disputes (SHEILD) Act of 2012 (H.R. 6245) was introduced. It is unlikely to be passed in this Congress but will serve to tee up discussion for the 113th Congress.
VII. Other Legislative/Regulatory Updates A. Treasury Anti-Money Laundering Education On April 10, 2003, FinCen issued an advance notice of proposed rulemaking regarding anti-money laundering program requirements for “person involved in real estate closing and settlements” including real estate agents. On June 9, 2003, NAR submitted comments stating that “without evidence suggesting that regulation would substantially benefit the fight against money laundering, the burden on brokers of having to adopt and implement anti-money laundering programs clearly outweighs any perceived benefit.” In proposed rules published on December 9, 2010, covering anti-money laundering programs for non-bank residential mortgage lenders and originators, FinCEN deferred proposing rules for real estate agents and others until it could conduct further research and analysis on business operation and money laundering vulnerabilities.
B. RESPA Updates
H.R. 2446, Home Warranty Legislation Amends the Real Estate Settlement Procedures Act of 1974 (RESPA) to state that no prohibited kickback or unearned fee incident to a real estate settlement service involving a federally related mortgage loan shall be deemed to include, or be deemed to have included, homeowner warranties or similar residential service contracts for the repair or replacement of home system components or home appliances.
Truth-in-Lending/Good Faith Estimate Form Reform On July 9, 2012, The Consumer Financial Protection Bureau (CFPB) issued the long awaited RESPA/TILA harmonization proposal. The proposal, at 1,100 pages is far more ambitious than simplifying and combining the Good Faith Estimate (GFE) and Truth in Lending (TIL) disclosures given to consumers upon application for a mortgage. The proposal contains many significant changes to the settlement process including combining the HUD-1 Settlement Statement and the final TIL into a single document to be provided by an undetermined party three days before closing.
3% Cap on Fees and Points The “Ability to Repay” provisions of Dodd-Frank include among other provisions, a provision that if a loan’s fees and points do not exceed 3%, the loan will be considered a “Qualified Mortgage” (QM). NAR believes that the QM will define the universe of readily available mortgages for a long time to come and non-QM mortgages will be rarely made. The problem is that the calculation of fees and points under the 3% cap discriminates against real estate and mortgage firms with affiliates involved in the transaction. NAR strongly urges Congress to pass H.R. 4323, the ‘Consumer Mortgage Choice Act”, to correct this discrimination and level the playing field between affiliated and unaffiliated firms and also makes a technical correction that prevents the potential double counting of compensation against the 3% cap.
C. Gift Rules and Limits on Federal Employee Attendance at Meetings A Member, officer, or employee may accept an offer of “free attendance” at a widely attended event if: (1) invited by the organizing event sponsor; (2) at least 25 persons from outside Congress will be attendance, (3) attendance at the event is open to members from throughout a given industry or profession, or to a range of persons interested in an issue; and (4) it is connected to the official’s Senate duties. In addition:
May also accept free attendance for one accompanying individual.
May accept a meal that is offered to all attendees as part of the event.
May accept local transportation to the event, if offered by the event sponsor.
May not accept a gift bag, unless it is valued below the Gifts Rule limit or qualifies for an exception to the rule.
D. Visa Updates - EB-5 Regional Centers, VISIT-USA & JOLT The EB-5 Investor Visa is a United States visa program administered by the U.S. Citizenship and Immigration Service that allows foreign nationals to obtain a visa for permanent residence in the United States by investing between $500,000 and $1 million (depending on where the investment is made) and creating or preserving 10 or more American jobs.
Recently Congress passed, and the President signed legislation to reauthorize the EB-5 regional center program for 3 years, through 2015. NAR will continue to work our partners in this area to ensure that the EB-5 program is successful.
E. Supreme Court Health Reform Ruling Twenty-eight percent of REALTORS® are uninsured. As part of efforts to address the health insurance needs of members, NAR has advocated for reform of the health insurance markets that provide coverage to the self-employed and small employers for more than nine years. Among the legislative approaches that NAR has advocated are small business health options plans (SHOP), small business health plans (SBHPs) and association health plans (AHPs). NAR continued to represent the interests of the Realtor community in the recently completed comprehensive health reform debate.
While the House passed H.R. 0002, legislation to repeal the Affordable Care Act (ACA), in January 2011 on a party-line vote of 245-189 and continues to take up bills focused on changes to the individual components of the health reform bill, these measures have not found the needed support in the Senate.
On the regulatory front, federal agencies are working on drafting the regulations needed to create the regulatory framework that Congress provided in the bill’s text. To date, the Department of Health and Human Services has issued numerous requests for comment and final rules, including those of particular interest to the small business community. These include requests for input into defining what the appropriate guidelines for the new health insurance Exchanges and grandfathered existing insurance plans are, as well as benefits will be require in insurance plans deemed to be in compliance with the ACA’s essential coverage provisions. The Internal Revenue Service has issued guidelines for the small employer tax credits available now to those small firms that provide coverage to their employees. NAR submitted comments on the proposed rules for the Exchanges, grandfathered plans and signed on to a business coalition comment letter on the design of benefits and coverage summaries (SBC) required for all employer insurance plans.
Increasingly the most important parts of the implementation debate are taking place at the state level. The ACA placed much of the responsibilities on the states for creating the Exchanges that will serve as the new insurance marketplace for individual and small business insurance coverage. States have until mid-2013 to decide whether to create a state-run Exchange or allow the federal government to create and run the Exchange within their states. Realistically, however, the decision window is much smaller since states that take on the responsibility to build an Exchange must have it up and running by January 2014.
To date, states have taken an array of approaches with some moving forward aggressively to create their Exchange and others deciding not to implement any of the health reform bill’s provisions, including the Exchange. The National Conference of State Legislatures has a map showing the status of the issue in each state; it can be accessed at http://www.ncsl.org/?tabid=21388.
Finally, a number of federal court challenges have been heard by the judicial system. Some have been thrown out, while others have been successful or remain pending. On September 28, 2011, the Obama administration asked the Supreme Court to hear its appeal of a decision by a three-judge panel of the United States Court of Appeals for the 11th Circuit, in Atlanta, that struck down the individual mandate provisions of the law by a 2-to-1 vote. The Supreme Court agreed to take the case and heard three days of arguments in the spring of 2012 on the various components of the lawsuit. The Court subsequently announced its decision upholding the constitutionality of the Act's individual mandate which had been challenged.
Copies of NAR's letters, testimony and statements, as well as NAR's health reform Q&A document and additional information on the health reform bills, are available on Realtor.org at www.realtor.org/topics/health-care-reform.