BB&T Bank Refuses Eminent Domain Loans

John AllisonBB&T Chairman and Chief Executive Officer John Allison may have a bright orange libertarian streak running through his company (via Volokh, who sees it as an Atlas Shrugging moment):

BB&T, the nation’s ninth largest financial holdings company with $109.2 billion in assets, announced today that it “will not lend to commercial developers that plan to build condominiums, shopping malls and other private projects on land taken from private citizens by government entities using eminent domain.”

In a press release issued today by the bank, BB&T Chairman and Chief Executive Officer John Allison, said, “The idea that a citizen’s property can be taken by the government solely for private use is extremely misguided, in fact it’s just plain wrong. One of the most basic rights of every citizen is to keep what they own. As an institution dedicated to helping our clients achieve economic success and financial security, we won’t help any entity or company that would undermine that mission and threaten the hard-earned American dream of property ownership.”

The argument is actually pretty clear-cut that they see eminent domain as having a negative financial impact on their industry. Still, I’m willing to bet the bank will be taken to court over alleged discrimination in lending practices in some not-too-distant point in the future, probably by a local government city council to boot.

Update: Hit & Run has more:

Is this an attempt to improve BB&T’s image among home buyers looking for mortgage lenders, or a plain, old-fashioned stand on principle? Maybe a little of both. If BB&T is doing well by doing good, it could hardly be faulted by shareholders. But what if it actually stands to lose more money by turning down developers’ business than it gains by taking a stand in defense of property rights?

This seems more like a shrewd business move rather than pandering to public opinion. After all, they could have led the way in stealing property from other banking institutions, but then the banking industry probably wouldn’t do so well if everyone was only trying to fuck the other guy over.

14 Comments
  1. This shows that some companies will do the right thing even if it’s not in their best short-term financial interests. Hopefully others will follow this example, and hopefully it will be in their long-term financial interests.

  2. Zounds; the exploitation of eminent domain reminds of the 1920’s… nice to see a bank stand up for long term profit over short term.

  3. I still say this is a simple, straightforward business decision: What good is having collateral for your mortgage lending if it can be seized by the government?

  4. Kip – I considered that, but also considered that major banks have enough leverage with the state level political process (a significant problem here in Alabama) to ramrod legislation to ensure that a mortage gets paid off as part of the eminent domain compensation procedure.

    It was a little ballsy for BB&T, and I’m impressed.

  5. I sent them an email thanking them for standing up to overpowering government, and I got back a nice little note explaining their position on eminent domain. A form letter, yes, but they recognize the importance of the issue to people.

  6. “This seems more like a shrewd business move rather than pandering to public opinion.”

    In a competitive marketplace, pandering to public opinion IS a shrewd business move. Furthermore, as a member of the public, I’m rather pleased with that state of affairs.

    As I mentioned in my blog post, BB&T has a contact form that can be used to send them praise, well wishes and probably RFPs.

    https://www.bbandt.com/apps/contact/corporate.asp

  7. I compliment BB&T bank on their move. I hope other businesses will stand up for the principle of individual rights. Companies like Wal*Mart should publically swear off any development plans that use the power of eminent domain.

  8. Here here! May the have the very best of luck in defending their clients. I too just sent them an e-mail commending Mr. Allison on his company’s position.

    Sending encouragement to companies who take a stand against imminent domain sounds like a great campaign. Does anyone know of other businesses who have done likewise?

    (Tired Immigrant, Wal*Mart’s moral issues don’t end with using imminent domain. Take for instance their campaign to raise the minimum wage. They know that they can afford the wage hikes, but their competitors certainly cannot.)

  9. I am in agreement to what BB&T is doing! To take away someone’s property to use for the sole benefit of enriching a government body is wrong.

    I have moved my finances to this bank in support of a bold stance.