FTC and Department of Justice Comment to the Honorable William J. Murphy et al. Concerning H. 5936 and H. 5639 to Require Lawyers to Represent Buyers in Real Estate Closings

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
UNITED STATES OF AMERICA
Federal Trade Commission
Washington, DC 20580
Department Of Justice
Washington, DC 20530
March 28, 2003
The Honorable William J. Murphy
Speaker of the House of Representatives
Speaker's Office
State House
Providence, Rhode Island 02903
The Honorable Gordon D. Fox
Majority Leader of the House of Representatives
Majority Leader's Office
State House
Providence, Rhode Island 02903
The Honorable Robert A. Watson
Minority Leader of the House of Representatives
Minority Leader's Office
State House
Providence, Rhode Island 02903
Members of the House Judiciary Committee
c/o The Honorable Robert E. Flaherty
Chairperson, Committee on the Judiciary
House of Representatives
State House, Room 206
Providence, Rhode Island 02903
The Honorable Rene R. Menard
House of Representatives
Providence, Rhode Island 02903
Re:
Proposed Bills H.5936 and H.5639, Proposed Restrictions on Competition From Non-Attorneys In Real
Estate Closing Activities
Dear Speaker and Members of the House of Representatives:

We understand that the Rhode Island House of Representatives is considering two bills that would amend the
definition of "practice of law" to require lawyers to represent buyers in virtually all aspects of the real estate closing
process. These bills are H.5936 and H.5639, both entitled, "An Act Relating To Criminal Offenses - Law Practice."
Both bills are very similar to H.7462, considered by the House of Representatives last year. The Department of
Justice and the Federal Trade Commission urged the House to reject that bill because it would have restrained
competition between lawyers and nonlawyers for real estate closing business, likely resulting in increased costs for
Rhode Island consumers. The current bills raise many of the same concerns as H.7462 did. Accordingly, we urge the
General Assembly to reject the current legislation for the reasons stated in our March 29, 2002 letter.(1) A copy of our
2002 letter is attached.
Sincerely yours,
R. Hewitt Pate
Acting Assistant Attorney General
United States Department of Justice
Antitrust Division
By Order of the
Federal Trade Commission,
Timothy J. Muris
Chairman
1. The bills primarily differ from the old bill in two respects. First, the new bills will allow realtors to answer questions
about purchase and sale agreements and other issues that the old bill would have forbidden. Second, H. 5639
contains a provision present in the old bill that would permit employees of corporations owned exclusively by Rhode
Island attorneys to close transactions. We believed this provision could raise interstate commerce clause and other
concerns. H. 5936, however, does not include this provision. In any event, these changes do not diminish our
concerns about the potential anticompetitive impact of the bills and we urge their rejection.