Bank Balking at Loans if Land Was Seized

In a response to the outrage generated by the Kelo decision which gave municipalities the right to sieze private property and give it to developers, one bank is saying no:

BB&T, the nation's ninth-largest financial holding company, announced yesterday that it would deny loans to developers building shopping malls and other private projects on land acquired through eminent domain.

"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," John A. Allison, the chairman and chief executive of the bank, said in a statement. Based in Winston-Salem, N.C., BB&T has more than 1,400 branches, mainly in the Southeast.

BB&T is believed to be the first bank to have made public such a policy in the wake of a Supreme Court ruling last June that set off a firestorm across the nation and led to bills in Congress and in more than two dozen states. The decision upheld the right of officials in New London, Conn., to condemn homes and businesses to increase the tax base of one of the state's poorest cities.

Could this start a trend among lenders? Maybe.

But in the bank's view, Mr. Chalk said, the Supreme Court "opened the door wider," making broader use of condemnation powers more likely. "We thought it was just timely to let people know how we feel," he said. "We are a very values-driven, principled organization."

Officials at the Institute for Justice, a property-rights group based in Arlington, Va., that has led the fight against eminent domain, welcomed the announcement but said it came as a surprise.

"It's going to set an example and encourage other banks and hopefully developers to say they will not take advantage of the government's power of eminent domain to force people out of their homes and businesses," said Dana Berliner. "It's the right thing to do, and it also makes sense as a business decision. These projects are so wildly unpopular, they're going to encounter political opposition and maybe litigation, and they often don't work anyway."

The bank has put principle (and not the loan kind) above profit, and good for them.