Regional bank BB&T 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 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, chairman and chief executive of the Winston-Salem-based bank, said Wednesday.
No other large U.S. bank has a similar policy, according to BB&T spokesman. The bank declined to estimate how much business they expect to lose as a result of the new policy.
In June, a divided Supreme Court ruled in Kelo v. City of New London 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.
BB&T said 38 states have recently passed or are considering laws to ban the use of eminent domain for private development. Similar legislation is pending before Congress.
"While we're certainly optimistic about the pending legislation, this is something we could not wait any longer to address," said BB&T chief credit officer Ken Chalk. "We're a company where our values dictate our decision-making and operating standards. From that standpoint, this was a straightforward decision; it's simply the right thing to do."
BB&T is the nation's ninth-largest bank, with $109 billion in assets and more than 1,400 branches in 11 states and Washington, D.C.
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