Not So Fast: KBW expects the Department of Justice to flex its muscles
Not So Fast:
KBW expects the DOJ to flex its muscles
Yesterday, the National Association of Realtors provided a timeline to approval of the proposed settlement agreement announced on March 15, 2024, to end litigation of claims brought on behalf of home sellers related to industry practices and commissions.
Actual timing, final terms, and liklihood of approval are still in flux, but here’s what we know so far.
NAR Settlement Update and Timeline
Katie Johnson, Chief Legal Officer, writing on behalf of the NAR via email to members, stated:
We expect that the Court will rule on the motion for preliminary approval soon.
The practice changes set forth in the settlement agreement are slated to take effect in late July of this year, and class notice will take place no earlier than August 17, 2024.
The settlement is subject to final Court approval, and plaintiffs have requested a hearing on final approval of the settlement to be held on November 22, 2024…
Further,
The motion for preliminary approval is the plaintiffs’ position. While we disagree with some of plaintiffs’ statements about NAR and real estate professionals, we agree that the settlement is fair, reasonable, and should be approved by the Court.
Following a March 29, 2024 ruling by the U.S. Court of Appeals for the District of Columbia, the Justice Department can reopen an antitrust probe into the National Association of Realtors.
“In particular, we believe it is likely that the DOJ will now look to intervene in the recent NAR nationwide settlement agreement in order to close any loopholes/workarounds, such as off-MLS compensation offers, and ensure more impactful changes to commission policies,” read a note published April 7, 2024.
“Real-estate commissions in the United States greatly exceed those in any other developed economy, and this decision restores the Antitrust Division’s ability to investigate potentially unlawful conduct by N.A.R. that may be contributing to this problem,” said Assistant Attorney General Jonathan Kanter, the head of the DOJ’s antitrust division, in an emailed statement.
“The Antitrust Division is committed to fighting to lower the cost of buying and selling a home.”
It is too soon to presume or expect that the Realtor settlement as proposed will receive final approval. Even using the NAR’s timeline of a late-April preliminary approval and a late-November 2024 hearing for final approval leaves six months for objections, DOJ influence, and for unknowns to be uncovered and expressed.
Now known as Keefe, Bruyette & Woods – A Stifel Company after the 2013 merger, the firm is probably best known for the KBW Bank Index. The index, formed in 1991, served as a banking sector benchmark and brought name recognition to the highly respected boutique firm.
KBW and 9/11
The firm’s NYC headquarters occupied the 88th and 89th floors of the World Trade Center South Tower. On that infamous day, 67 of 172 New York employees perished.
September 11, 2001, forever changed our country, our industry, and our organization. Today, we pay special tribute to 67 KBW associates who died in the World Trade Center that day and reflect on the incredible legacy they left behind. As KBW CEO Tom Michaud explains, “the story of 9/11 isn’t over, the chapters just keep getting turned.
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