2 articles on Eminent Domain abuse

Subject: 2 articles on Eminent Domain abuse (squeeze on banks)
Date: 1/26/2006 7:18:05 AM Eastern Standard Time
From: kitchen@hellskitchen.net
Sent from the Internet (Details)


Publication: The New York Sun; Date:Jan 26,
2006; Section:Business; Page:8

Seized Land Has Bank Taking Stand
BANS LOANS TO BUILDERS IF EMINENT DOMAIN USED
By PAUL NOWELL � Associated Press

HARLOTTE, N.C. � Regional bank BB&T Corporation, one of the nation�s largest
financial institutions, will make no loans to developers who plan to build commercial projects
on land taken from private citizens by the government through the power of eminent domain,
the company said yesterday.

�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,� the bank�s chairman and chief executive,
John Allison, said in a statement.

In an interview,BB&T chief credit officer Ken Chalk said the bank expects to lose only a
tiny amount of business, but believes it was obligated to take a stance on the issue.

�It�s not even a fraction of a percent,�he said.�The dollar amount is insignificant.�

But he added: �We do business with a large number of consumers and small businesses in our
footprint. We are hearing from clients that this is an important philosophical issue.�

Mr. Chalk said he knows of no other large American bank with a similar policy.

BB&T, which is headquartered in Winston-Salem, ranks among the nation�s top 10 banks by assets.

In June, a divided Supreme Court ruled that cities may raze people�s homes to make way for
shopping malls or other private development. The 5�4 decision gave local governments the power to seize private property in the name of increased tax revenue.

The ruling upheld a decision by the City of New London, Conn., to seize seven property
owners� land so developers could build a hotel and highend condominiums to keep pharmaceutical giant Pfizer expanding in the state.

Scott Bullock, a senior attorney with the Arlington, Va.-based Institute of Justice, who
represented homeowners in the New London case, applauded the bank�s decision.

�Eminent domain abuse is wrong and unconstitutional,� Mr. Bullock said in a statement. �BB&T has stepped up and recognized its corporate responsibility to not be a part of this shameful abuse of individual rights.�

The policy also will protect the assets of banks such as BB&T by not tying up their money in
projects that may draw political opposition, said Columbia University law professor Thomas Merrill, a specialist on eminent domain.

*************************************************

Publication: The New York Sun; Date:Jan 26,
2006; Section:Editorial & Opinion; Page:6

�A Straightforward Decision�

The fight-back against eminent domain abuse following the Supreme Court�s ruling in Kelo
v.New London has thus far unfolded in the halls of the Capitol, state houses, and city halls, but
a piece of news from the business world reminds everyone that private citizens also have a role
to play in protecting constitutional liberties.

BB&T Corporation, the nation�s ninth-largest bank with operations in the South and mid-Atlantic, announced that it will no longer lend to commercial developers who exploit the
government�s power of eminent domain for their projects. Whatever its practical effects, the
move has symbolic significance, highlighting legislative efforts and laying down a challenge
to other financial institutions.

�While we�re certainly optimistic about the pending legislation, this is something we could
not wait any longer to address,� a senior executive vice president, W. Kendall Chalk, said
in the press release announcing the decision.

�This was a straightforward decision; it�s simply the right thing to do,� he continued in the
statement. Mr. Chalk told us later that executives reached their decision without any
pressure from outside groups and in the knowledge that they were the first of their competitors to announce they would forego such business. One prominent property rights activist we reached yesterday, Scott Bullock � who litigated the Kelo case � was pleased but surprised by the move.

Cynics might argue that BB&T can afford to be virtuous in this instance. According to Mr.
Chalk, eminent domain development projects represent only an insignificant slice of the
bank�s business. Yet corporations are inherently live-andlet-live in respect of so many hot-button political issues that we can�t help but think that a sense of principle has played a role in the bank�s decision.

The question now is, what next? Mr. Bullock reports that he and other activists have tried
over the years to dissuade many companies from using eminent domain in development projects (although he had not been in touch with BB&T).

Companies usually demur, as long as their competitors are willing to exploit eminent domain.

Just as a retailer or developer might have a fiduciary duty to take advantage of a legal
opportunity to snatch a prime location, banks could face a tough sell to shareholders in
respect of passing up the profits from these loans. While the surest way to secure property
rights remains in the hands of our legislators, BB&T�s decision reminds those legislators that
even in the world of billion-dollar banking, private citizens are prepared to take risks for the right to property.

-----------------------------------------------------------------------
Hell's Kitchen Online(tm) -- NYC's West Side Wonderland
web: http://hellskitchen.net
email: kitchen@hellskitchen.net
TenantNet(tm), for Residential Tenants: http://tenant.net