Ought private businesses to express their political views through policy? Is there any sort of discrimination claim that prospective borrowers could make against the bank? Can the federal government prohibit BB&T from enacting its policy, or is that a violation of free speech?
As I see it, it’s high time that businesses took some route other than lobbying to make their points. It’s good to see someone put their principles where their money is. I applaud Allison’s decision and will encourage my own bank to do the same.
I think businesses should be able to make a political point in such a manner, but it skates close to discrimination. Great care needs to be taken to avoid any action that could be construed as such. Otherwise, great idea. Money talks louder than words.
As well, the decision seems far-sighted to me from a philosophical viewpoint. Businesses are private property too. Once the precedent of taking Widow Smith’s home to build a casino is set, what is to stop the taking of Banker Smith’s parking lot? Maybe Allison has seen the writing on the wall and has taken steps to protect his vested interests. If so, then he has exercised extraordinary fiduciary care on behalf of his shareholders.
Is that the only factor involved here? If I were investing money, I wouldn’t touch an economic development project that depended on eminent domain with an eleven-foot pole – states are under pressure to restore eminent domain to its traditional constitutional purpose (i.e. such a project could fall apart at the stroke of a pen), and public opinion is firmly set on the issue (i.e. you couldn’t get a worse PR debacle short of erecting a statue of Osama bin Laden in the foyer).
True enough. I imagine competitors would have a field day. I can envision the ad, and it would involve Mr. Money Bags climbing stairs made of the bodies of old women, poor people, and children as he ascends to the top and pours hot asphalt over them. “Do you want to do business with this man?”
For-profit, publicly-traded companies should not be making political statements. They should make decisions solely on what’s profitable for the company, preferably looking on a time-horizon as distant as practical.
In this case, the bank is probably making a good decision. One of the foundations of sustainable free market is enforceable property rights. The government running rough-shod over those in order to redistribute wealth is not good for the free market or the businesses that compete in it. So the bank is taking a surprising long view and doing what’s in its own best interest.
I agree with their decision, but it’s because I agre with their decision, not because I think the mechanism (throwing the weight of money behind a political cause) is always a good mechanism. I can imagine circumstances under which a bank refused to lend money for other political reasons (e.g., to keep a nonprofit devoted to increased scrutiny of the financial industry from being able to set up operationas) that I’d find reprehensible.
How do you draw the line between acceptable political discrimination and non-acceptable? If some bank in Texas decided to stop doing business with non-citizens, is that okay? Or anyone of Hispanic origin? It’s a dangerous precident to set.
I made the point in another thread that this is purely a marketing ploy on the part of the bank – a successful one, I might add. The chances that this bank would actually be involved in a deal involving “eminent domain profiteers” strikes me as remote. So they can forswear these deals at no cost to themselves, and gain a marketing advantage. And thus is capitalism served.
The same way we’ve drawn it for decades: by interpreting the 14th Amendment and applying strict judicial scrutiny to policy that abrogates the equal rights of suspect classes.
Building developers who use eminent domain to seize property are not a suspect class.
How so? BB&T is one of the Charlotte area banks (headquartered in nearby Winston-Salem). As such, it services businesses in states all across the Southeast in fast-growing areas where construction contractors stay very busy. It competes with Wachovia and Bank of America, both headquartered in Charlotte.
Why so? If the company’s owners, the shareholders, agree with this stance, why not, exactly? If they don’t agree, they’re free to fire the company’s executive officers… If they do support this position, other, unhappy shareholders are free to sell their stocks.
My point is that local governments are going to be reluctant to exercise eminent domain in this highly controversial and unpopular way, such that the number of these projects cropping up is bound to be small overall, if not actually zero.
Yeah, but that was in Connecticut – and it set off such a storm of protest that any local government would have to think long and hard about doing anything like that. I’m just theorizing, of course, but I’d be interested if anybody could cite any recent examples (ideally in the Southeast where this bank is located) of eminent domain profiteering, as per the OP.
Not offhand, but then absence of evidence is not evidence of absence. Perhaps the bank’s decision is helping to sway the minds of local magisterial entities.