The agencies expressed concern that the bills would likely cause Rhode Island consumers and businesses to pay more for real estate closings and prevent them from benefitting from competition from out-of-state and Internet lenders that could provide more convenient closing services.

Currently, non-lawyers compete with lawyers to close real estate deals in Rhode Island; the bills would end that history of competition. The bills would eliminate this competition by requiring a lawyer to close almost all real estate deals.

"This bill would likely deprive Rhode Islanders of the significant benefits of competition, such as lower prices, more convenient services, and the option to use inexpensive Internet-based loan services," said Timothy J. Muris, Chairman of the Federal Trade Commission.

"The bill will likely raise prices for Rhode Islanders in two ways," said R. Hewitt Pate, Acting Assistant Attorney General in charge of the Justice Department's Antitrust Division. "Consumers who would not pay for a lawyer would have to do so, and, traditionally, lawyers charge more than lay providers. Second, without competition from non-lawyers, lawyers' fees are likely to increase."

A similar bill was introduced last year but did not become law. The DOJ and the FTC had urged the Rhode Island legislature to reject that bill. The two bills being considered are H. 5639 and H. 5936, both entitled, "An Act Relating To Criminal Offenses - Law Practice," which were referred to the Rhode Island House Judiciary Committee. The bills cover virtually all real estate transactions, including residential and commercial deals and purchases, refinancings, second mortgages and other transactions.

For more information on the letter at the FTC, contact Jerry Ellig, Acting Director of the FTC Office of Policy Planning, at 202-326-3528. For more information on the letter at the DOJ, contact Renata B. Hesse, Chief of the Networks and Technology Section, at 202-307-6200.

Source:FTC.gov