You don’t always find the executive of a major bank and tea partyists lining to bash the Republican state Senate. But that’s the case today.
Both are pointing to SB 448, sponsored by Senate Rules Chairman Don Balfour, R-Snellville, which they say would allow developers to escape payments on personally guaranteed loans for projects that have gone bust during the Great Recession.
Most impressive is a March 12 letter from BankSouth CEO Harold Reynolds that is making the rounds of the state Capitol today. In his letter, which can be read here, Reynold asks the House to halt the “disaster” contained in the Senate legislation. A couple excerpts:
If the Legislature can retroactively annul a guarantor’s promise to pay, then banks cannot make loans based on a borrower’s signature. That is one of the surest means to restrict needed capital for small business. Certainly, you know of many businesses started in a garage with a signature loan from a community bank. What will the Legislature propose next to retroactively alter contractual arrangements to the [detriment] of citizens and businesses of Georgia?”
One can only hope that in its haste to react to some of the aftereffects of the financial meltdown that the Georgia Senate did not adequately consider the unintended consequences of this bill…
The Atlanta Tea Party was more blunt in its assessment:
SB 448, sponsored by Senator Don Balfour in the Senate (now in the House) is an attempt at what amounts to a bailout for big money land developers who made millions off land speculation during the real estate boom, but now want to be retroactively (yes retroactively) absolved of their personal guarantees.
While millions of Georgians are paying their debts during this hard economic time, while small businesses struggle to get loans, and while thousands of Georgians’ homes are being foreclosed on, well-connected developers are seeking to be bailed out of their financial obligations…ultimately at your expense.
With all do respect to tea partyists, it is the BankSouth letter that may dig a hole for this bill, even at the risk of angering the Senate Rules chairman.
- By Jim Galloway, Political Insider