Wednesday, January 25, 2006

BB&T to Refuse Loans for Economic Development Projects That Abuse Eminent Domain

The AP is reporting this afternoon that North Carolina-based bank BB&T--which is one of the larger banks in West Virginia--has announced that it will not approve loans to support "economic development" projects that use eminent domain to seize property from private property owners.

"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 Allison, the bank's chairman and chief executive, 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.''

Chalk said he knows of no other large U.S. bank with a similar policy.

BB&T, which is headquartered in Winston-Salem, ranks among the nation's top 10 banks by assets. BB&T operates in West Virginia.

Hopefully, other banks will follow suit.