Every so often a large business does something so right -- and so moral -- that both comments and compliments are deserved, a moment which arose last week when it was announced that a major bank has decided to forego profits in a voluntary effort to advance the public good.
Based in Winston-Salem, BB&T Corporation is the nation's ninth largest financial holding company, an entity with some $109.2 billion in assets. Last Wednesday the company said 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."
While public pressure has forced governments at every level to run from the Supreme Court's radical Kelo decision, BB&T is the first and only major lender to join with Kelo opponents.
Until Kelo et al v. City of New London eminent domain worked this way: Under the "taking" clause of the Fifth Amendment government is allowed to acquire private property for "public use" but not "without just compensation."
As one example, most people would agree that government can take property to complete a road, something where there is no private profit and where everyone potentially benefits.
Under Kelo the Supreme Court gutted centuries of precedent and said that government could take your home if a "public purpose" was served.
What's a public purpose? With the Kelo decision the Supreme Court said the city of New London could take property from 15 local citizens and then re-sell the land to a private developer. When re-developed, the land will generate more tax dollars and thus bigger tax revenues, said five Supreme Court justices, and this was a dandy and wonderful "public purpose."
Of course, if you're a contributor to political campaigns you can see the instant beauty of the Kelo decision. The folks you support can use the power of government to acquire land that you're unable to buy in the open marketplace. You can then develop the property and make huge sums of money.
To quote the insightful, Russian-born comedian, Yakov Smirnoff , "Is this a great country or what?"
"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," said BB&T Chairman and Chief Executive Officer John Allison.
"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."
By cutting off funds to private developers who use eminent domain condemnations, BB&T has yanked the financial lifeline required to make such projects work. You can bet that BB&T is turning away substantial business, something which will aggravate bean-counting shareholders and Wall Street analysts. No doubt some of the folks at local country clubs and banker's conventions will shun those who work for the North Carolina bank. And among the "smart growth" crowd there must be consternation and outrage because here, finally, a huge bank has acted with common sense.
BB&T did not have to raise its voice. It did not have to get involved. No other major bank has taken such a stance.
And yet it did. It was first, the hardest place to be. BB&T deserves recognition for acting in a way that is fair and moral at a time when the gulf between those who have much and those who do not seems to be widening. Whether any other major lender will follow the path opened by BB&T has yet to be seen.
I can't tell you anything about BB&T or how it ever got billions of dollars -- but I do know that BB&T has some branches near me. I would certainly like to chat with them the next time I have a banking need.
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