BB&T Takes a Stand on Eminent Domain
Tip It!North Carolina-based BB&T, the ninth-largest bank in the country, has announced that it won’t provide financing for private development that takes place on land that the government has seized through eminent domain. In case you’re not familiar with the concept of eminent domain, it refers to the power of the government to seize property for its own use without the owner’s consent.
Eminent domain is most often invoked to make various public works (such as building a road or a school) possible in the event that the owner of a critical piece of property refuses to negotiate a sale price. In such cases, the property owners are typically paid fair market value for their property (so-called ‘just compensation’). This past summer, however, controversy over eminent domain fired up this past summer when the Supreme Court ruled that the government can seize property for the sake of private development projects. Thus, the government could conceivably force you to sell your property such that it can be sold to a developer that will build pricier houses, offices, etc. The end result is higher property taxes for the government — talk about a conflict of interest!
BB&T’s decision isn’t likely to have major economic repercussions, as only a small fraction of lending opportunities are affected. But it’s still good to see someone (besides the affected property owners) taking a stand.
[Source: CNN/Money]
Published on January 27th, 2006 - 8 Comments
Filed under: Banking
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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January 27th, 2006 at 8:37 am
It’s too bad BB&T has taken this position. As you said, it won’t affect many lending opportunites, but I was pleased to see the entrepeneur (or civil activist, whichever way you look at it) who came up with this idea calling BS on this ruling. While I’d hate to see a supreme court justice be humiliated and lose his home, I was outraged at the ruling (as a lot of us were) and I found this idea perfect in its just irony.
January 27th, 2006 at 10:11 am
Shoot, I heard this on NPR and the other day I was trying to remember what BB&T did so I could right about it. hahahah arggg.
January 27th, 2006 at 10:46 am
Good for BB&T! The idea that my property could be seized so that pricey condos could be built in its place makes me furious.
January 28th, 2006 at 10:30 am
While it won’t make much impact, it’s nice to see that someone’s taking a stand against this.
February 4th, 2006 at 11:00 pm
While the stand may be symbolic, just the buzz that it caused is worth it. There have even been suspect eminent domain moves in government related seizures. When you add the private sector into the mix, who knows where it will take us and the mischief it will cause.
February 5th, 2006 at 1:30 pm
TWO TYPES OF “E.D.”
If you mention the subject of “E.D.” to a man, he will either get upset or get embarrassed. Why? Because there are actually two types of E.D., and neither one is good.
One involves the use of the law to take private property for the so-called “greater good†– it’s called “eminent domain.†The other is a medical condition – erectile dysfunction – that no man on the planet wants to experience.
Believe it or not, the property-stealing E.D. has a lot in common with the medical condition E.D: In one case, someone’s getting screwed. In the other, he’s not.
February 10th, 2006 at 2:18 pm
While I think it is great that there are people and institutions that are willing to stand up against this… I do not think that it is going to stop it. Heck, if private entities are going to be allowed to use the government to steal property, they will also be allowed to use the government to get financing… it is happening in Indianapolis! The owner of the Indianapolis Colts has forced the city (and now state) to build a new stadium. This new stadium has already been founded on eminent domain, without too much fuss. The city become quite fed up, though, when they were trying to take land from a business for parking spaces. The business was willing to give up all land that it didn’t need for operations, but that was not enough. Now, the Colts owner is in need of a loan, so the city is taking out bonds to get the money, and the Colts owner will be paying this back at a much lower rate than otherwise possible!