A Missouri-based bank has announced it “will not lend money for projects in which local governments use eminent domain to take private property for use by private developers,” making it the second lending institution in the nation to do so.
The February 5 announcement by Montgomery Bank, which operates in St. Louis and southeastern Missouri, followed by two weeks a similar announcement by North Carolina-based BB&T Corp., the nation’s ninth-largest bank.
Defending Property Rights
“This issue is near and dear to our hearts. There are not many things more basic than private property rights,” said Troy Wilson, Montgomery Bank’s CEO and president. “Our bank [$800 million in assets] is privately owned and family operated. Our charter is over 100 years old, and all our board members are small business owners and operators. We were very much taken by the Kelo decision and the dissent of Justice O’Connor.”
In a 5-4 ruling in the case of Kelo v. New London, the U.S. Supreme Court last year said local governments may seize private property and turn it over to other private parties who will use the land in ways that promise to generate more jobs and tax revenue. Justice Sandra Day O’Connor wrote a vigorous dissenting opinion in which she said the majority’s ruling threatens all private property and is likely to benefit powerful and politically connected corporations and individuals at the expense of ordinary businesses and citizens.
Fighting ‘Unholy Alliance’
“We said this continued erosion of basic rights by activist courts has to stop, and we need to make a statement,” Wilson said.
Wilson said the response from bank customers and the public “is all very positive. Everybody is for economic development. But when you peel the onion back and see what’s in the core, the Supreme Court is allowing these local governments to take properties from rightful owners, in many cases without even specifying what it’s to be used for. This is a very unholy alliance between developers and local governments that want more revenue. We don’t want to aid it.”
Steve Stanek ([email protected]) is managing editor of Budget & Tax News.