Second Bank Within Week To Reject Eminent Domain for Private Gain
PRESS RELEASE: February 6, 2006
Arlington, Va.—Montgomery Bank, which has six branches in St. Louis and five branches in Southeast Missouri, announced late last week that “it will not lend money for projects in which local governments use eminent domain to take private property for use by private developers.”
In a press release issued by the bank, Chief Operating Officer Troy Wilson said, “The sanctity of private property ownership is one of the hallmarks of our individual rights as private citizens. Eminent domain should only be used for public projects, not to benefit private developers.”
Joel Montgomery, vice-chairman and general counsel, added, “We’ve already witnessed the chaos unleashed on local communities when city councils and private developers threaten to use this type of legislation.”
The century-old financial lending house with $800 million in assets is the first Missouri bank to take a principled stand against eminent domain for private development. One week earlier BB&T—the nation’s ninth largest financial holdings company with $109.2 billion in assets—became the first in the nation to refuse loans to projects involving the threat or use of eminent domain.
“Banks refusing to fund eminent domain for private gain makes sense both financially and as a customer matter,” said Institute for Justice President and General Counsel Chip Mellor. “As we’ve seen with the Kelo case, when eminent domain for private use occurs, years of litigation rightfully follow, which ties up financial capital that could be more productive. Also, surveys across the nation find an overwhelming majority of the public objects to eminent domain for private use, so by refusing to fund these deals, banks are adhering to the views of the vast majority of their customers. We hope other financial institutions will follow BB&T and Montgomery Bank’s principled examples.”
Steven Anderson, the coordinator of the Castle Coalition—a nationwide grassroots network determined to stop the abuse of eminent domain in their communities—said, “Missouri has one of the worst records of eminent domain abuse in the country. By taking this courageous stance, Montgomery Bank is helping to stop the railroading of individual rights in the Show Me State.”
After Kelo, Missouri Governor Matt Blunt formed an Eminent Domain Task Force, which recently acknowledged Missouri has a problem, but the task force failed to offer many substantive solutions. Missouri is one of more than 40 states nationwide currently considering legislation to reform its eminent domain laws.
Scott Bullock, an IJ senior attorney who argued the Kelo case on behalf of IJ, said, “Eminent domain abuse is wrong and unconstitutional. When citizens and businesses take these important stands, we’re one step closer to protecting the rights of all Americans.”