Bank exec, tea partyers bash developer ‘bailout’ bill

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

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70 comments Add your comment

Becky

March 19th, 2012
1:03 pm

How did Balfour propose this with a straight face? And whose pocket is his slimy hand in?

losersville

March 19th, 2012
1:11 pm

Now you can understand why Georgia was just named the most corrupt state. No ethics, no how.

Red

March 19th, 2012
1:12 pm

So let me get this straight…they want to hold on to that bank settlement for a rainy day fund but then turn around and want to bail out developers? And seeing anything with Harold Reynolds’ name on it coming from the capitol smells of political under the table paybacks. Wasn’t this guy involved in bids to develop the coast? And didn’t his family fail in developments at Reynolds Plantation and have to sell off quite a bit there? This DOES NOT pass the smell test. Linger Longer needs to linger no longer.

xdog

March 19th, 2012
1:17 pm

Why the outrage? GOPers have been moving $$ to developers since they took control under Sonny.

RIGHTISWRONG

March 19th, 2012
1:20 pm

Red, not oly does this NOT pass the smell test it emphasizes the Republican mantra of,”It’s OK to do it IF and ONLY IF it benefits ME.”

Unreal….

Red

March 19th, 2012
1:23 pm

RIGHTISWRONG – this is not a partisan issue. Keep in mind this nonsense went on under Dem control as well. Look no further than former Speaker Murphy for that history, This is just flat corruption by those in charge no matter who the party is in power. One of many reasons we need term limits across the board at state and federal level. I’d love to see the Tea Party start pushing that since it would put power back in the hands of the people rather than the elected officials who do more to pad their pockets and hand out favors to buddies in business.

Marlboro Man

March 19th, 2012
1:29 pm

Red, once the GOP took over GA we are going backwards. Strait truth.

clyde

March 19th, 2012
1:38 pm

I don’t care what digs a hole for this bill,as long as the hole is deep.

Bernie

March 19th, 2012
1:38 pm

Rep. Bailfour is doing that because Snellville is “Where Everybody’s Proud to be Somebody” the problem is, they think they are a better SOMEBODY!

Centrist

March 19th, 2012
1:45 pm

And then there is the car dealer lobby getting payback for their campaign contributions too. Individual car sales have a large title transfer fee (read tax) proposed in last minute, sneaky legislation.

Shine a light on these snakes crawling out from under their rocks this last week of the legislative session, and remember them when voting.

The Snark

March 19th, 2012
1:48 pm

I can’t wait for then next time these so-called “conservatives” start lecturing us on personal responsibility.

More of the same

March 19th, 2012
1:59 pm

I’m sure Chip Rogers will be all over this since he welched on his debt.

td

March 19th, 2012
2:01 pm

The Snark

March 19th, 2012
1:48 pm

I will lecture you tell you I do not support this bill because it is totally against personal responsibility. Don Balfour has shown me that he is not a philosophical conservative and every action he takes should watched closely. I hope the voters of his district vote him out in the primary.

Centrist

March 19th, 2012
2:05 pm

The media sure got quiet when Romney swept the Puerto Rico primary vote and delegates. He is set to win Illinois tomorrow. April looks bad for Romney contenders, too, other than Santorum’s last gasp home state.

I have no problem with the media finally being shut up now that they can’t make it APPEAR to be a competitive nomination.

Marlboro Man

March 19th, 2012
2:10 pm

Fees, the GOP word for tax.

Moon Mullins

March 19th, 2012
2:11 pm

These philosophical conservatives td waxes eloquent about are pragmatists. If a situation benefits them or serves their pruposes or meets their needs, to heck with the constitution, budget, debt or deficit.

For example, there will always be money available to start an unwinnable war in some far flung corner of the middle east or in some god forsaken country like Afghanistan. They just love for you to give your life for their country.

Centrist

March 19th, 2012
2:12 pm

@ Marlboro Man – make that “politicians” and the media, not just the GOP. Add “revenue enhancements” as another euphemism.

zeke

March 19th, 2012
2:30 pm

something i can agree with td on, balfour is bad news for ga citizens.

Mrs grammar

March 19th, 2012
2:33 pm

“due” respect, not “do” respect.

Wonder

March 19th, 2012
2:35 pm

It sounds like Mr. Bank CEO is threatening to make loans harder to get or more expensive. Georgia is #1 is bank fauilures, perhaps loans should be harder to get?

WOW

March 19th, 2012
2:39 pm

Enter your comments here

Clanmack

March 19th, 2012
2:40 pm

There may be a serious vocabulary error in the letter cited. In paragraph 3, sentence 2 the word “advocate” is used in foretelling what attorneys will do in court if this bill is passed. I think the word “abrogate” should be used and makes more sense. I hope I am misunderstanding the wording, but if not, I hope the legislators don’t pick up on it. Oh, excuse me, I used the word legislators, who, as a group are as smart as a box of rocks.

This bill clearly is the result of lobbying by the developers who stand to gain from being absolved of their personal loans. This bill proves why Georgia is “ethics poor” and one of the worst to deal with corruption in the country. This is disgusting. If it passes, I hope the IRS drops in on all who benefit and stick it to them for penalties and interest on top of the income “gains,” just like all the short sales have done to the citizens of Georgia. They should be stripped of their previous profits and left destitute. Let them buy lottery tickets then.
Red, above, is right- term limits on all these people. That way those elected who are decent to start, are less likely to be corrupted once they get to the Gold Dome and those who are already corrupt have much less time to line their pockets.

Debbie Dooley

March 19th, 2012
2:44 pm

Voters – throw EVERY SINGLE ONE of them out!!!!

Weetamoe

March 19th, 2012
2:59 pm

Even when the evidence is staring them in the face the people who hate the TEA party will never credit them with their sincerity of purpose, their victories in electing conservatives on every level from small county offices to the House of Representatives, their refusal to drop down into the gutter with those who hurled vulgar homosexual epithets and false accusations of racism. And if you read their letter there is nothing they say that merits the vitriol some of you spew.

catlady

March 19th, 2012
3:00 pm

Yet the sheep will plod to the voting booth, or, more likely to the “early voting” to secure another term for these idiots! And we wonder why things are so bad in Georgia. Look to the top, folks.

Not so much

March 19th, 2012
3:14 pm

You aren’t blogging about our fine ethics ranking?

ramguy68

March 19th, 2012
3:22 pm

Centrist
The media sure got quiet when Romney swept the Puerto Rico primary vote and delegates.

I read it all over. I don’t know what you’ve been reading.

td

March 19th, 2012
3:23 pm

catlady

March 19th, 2012
3:00 pm

Bills like this one is giving an advantage for one private industry over another private industry. The bill is wrong and should not happen because there should be personal responsibility in the private sector and the government should not pick winners and losers. At least this bill is not a politician using taxpayer funds to prop up a business of to grow government. I prefer these bills and the Republicans because they are not messing with my money.

northeast lady

March 19th, 2012
3:28 pm

Vote all congressmen and women out!
We didn’t like the federal bailouts, so remember these new proposed Georgia bailouts!

Centrist

March 19th, 2012
3:31 pm

td posted “I prefer these bills and the Republicans because they are not messing with my money.”

Did you see the sneaky last minute proposals:

Whopping title fee – buy/sell a privately owned car gets hammered.

Planning to retire in GA? New legislation proposals wipe out the current $35K pension exemption and its programmed future increases. Neighboring states don’t tax pension income, so planning to retire there might be more economically advantageous.

Real American

March 19th, 2012
3:38 pm

Centrist, you don’t think the GOP primary is competitive?? LOL, somebody forgot to tell the candidates.

findog

March 19th, 2012
3:39 pm

The sheep will vote to keep gays from marrin
So they done stuck to the banks our bubba kept them gays from a marrin
So what that Jim-Bob abd Betty-Sue can’t get no work cause the banks won’t loan no money to start jobs at least them gays in Atlanter ain’t a marrin here in jawja

findog

March 19th, 2012
3:42 pm

Centrist, Romney beat the guy who told the people in San Juan to learn to speak English. Wow, I wonder why he didn’t get 95% of the vote. And Romney is tied in IL with Rick…

Taylor Wooten

March 19th, 2012
3:43 pm

Wow! Is this Ga Rep serious??? How much $$$ did the Developer put in his pocket?

Unreal!

Taylor Wooten

March 19th, 2012
3:46 pm

Here’s a thought…..how about holding Bank Boards of Directors personally liable when their Bank fails and costs all of Us via the FDIC ….tens to hundreds of millions of dollars

Wish somebody would do a story on that. You can look first at the failure of PAB Bankshares in Valdosta.

T'dubs

March 19th, 2012
3:47 pm

Maybe since the Governor will veto the bill as he stood behind his guarantees on his daughter’s loans and feels everyone else should follow his example? I know I know we aren’t in Kansas anymore…..

Centrist

March 19th, 2012
3:51 pm

Real American posted “Centrist, you don’t think the GOP primary is competitive??”

Nope. The front runner has more than DOUBLE the delegates than his closest challenger and more than ALL of the rest combined. He has a national campaign as opposed to the other regional campaigns. He has much better organization, a much bigger campaign contribution war chest, many more important endorsements, and will will the vast majority of super delegates (party leaders). He is leading in national polls and most of the future state primary/caucuses.

His challengers are running for name recognition for future campaigns, book sales, and/or possible Romney administration jobs.

Hillbilly D

March 19th, 2012
3:51 pm

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.

Can’t say that’s a surprise. After all, who really runs the state in general and Metro Atlanta in particular? Been that way at least 50 years.

In my local area, a lot of people already lost money when 2 or 3 of the local banks went belly up. Those banks were run by developers and their cronies/relatives. I reckon they want to keep on until they sink the other bank or two that’s still standing.

Hillbilly D

March 19th, 2012
3:54 pm

Wish somebody would do a story on that. You can look first at the failure of PAB Bankshares in Valdosta.

I’m not familiar with that bank but I’d think you could just throw a dart at a map of the state and hit a similar situation.

Like I mentioned in my area, some of those ol’ boys are still driving shiny Mercedes and living in their big fancy houses.

Centrist

March 19th, 2012
3:56 pm

findog posted “Romney is tied in IL with Rick…”

Latest Illinois Republican Primary Polls (taken before the expected Puerto Rico win bump):

Poll Romney Santorum Gingrich Spread
Rasmussen 4 32 14 Romney +9
FOX Chicago/WAA 37 31 14 Romney +6
Chicago Tribune 35 31 12 Romney +4

deegee

March 19th, 2012
3:57 pm

Balfour=Snellville= Gwinnett County=politically connected developers=corruption. What do you expect?

Michael

March 19th, 2012
4:04 pm

But the conservatives bristled in 2009 when we tried to pass a law to write down mortgages to value in Chapter 13. Something about the sanctity of contracts. I guess that only counts if it’s the little people’s contracts with the big banks, not the deep pocketed people with the paid-for legislators.

td

March 19th, 2012
4:21 pm

Centrist

March 19th, 2012
3:31 pm

I saw some of them. Paying off the dealerships but then again we either we all pay the same taxes or we do not.

I plan on retiring to Florida where there is no state income tax.

Centrist

March 19th, 2012
4:30 pm

td posted “I plan on retiring to Florida where there is no state income tax.”

That is precisely why the Republicans previously started a $35K pension (includes Social Security) income tax exemption which increases every year until ALL pension income is exempt from income tax. Retirees don’t use services or infrastructure nearly as much as growing families, and they as a group are more law abiding. They still pay property and sales tax with relatively more disposable income than families. Encouraging them to move to all the neighboring states that don’t have income taxes, or exempt pensions is a net loss for Georgia. The problem is that politicians often use static tax analysis, and simply count tax dollars that will actually flee.

I’m between retiring to Florida or Tennessee.

gooberville

March 19th, 2012
4:31 pm

can we make them take a drug test before we hand them free cash back?

Privatized profits, socialized losses. American “capitalism” at its finest hackery.

Road Scholar

March 19th, 2012
4:33 pm

td@3:23: There you go again giving the legislators another idea of how to use taxpayer funds to make the banks solvent on these loans! With the shape they’re in , how can the banks write off more bad loans?

Marlboro Man

March 19th, 2012
4:34 pm

Bartow Co bank failed and one of the causes was attributed to US Reps who decided they should not pay back what they borrowed ? Where is the money ? Guess who is cleaning up their mess ? Well Graves is running for re election, he’s your chance.

R U Kidding Me?

March 19th, 2012
4:48 pm

Don Balfour is a complete bafoon. I think too many smothered and covered hashbrowns has effected his brain.
Last week, in a committee hearing about re-directing the revenue from special fees for drivers training, etc into the general fund for the legislators to play with, Blafour said “We’ve been doing this for 20 years, and I just keep getting re-elected”. It’s time for arrogant d-bags like this to go home.
Then last year, it was Balfour and his lady friend lobbyist being chased around the Capitol by CBS-tv for taking a trip together to Israel on the tax payers money. When asked why he took his lady friend lobbyist to Israel, Balfour uttered “Because she’s jewish”.
Now this brainless fool wants to let everybody who made a bad real estate loan just walk off scott free. He obviously isn’t running for re-election with moves and comments like these. If the voters of his district re-elect him, Georgia needs to allow that district to secede.

td

March 19th, 2012
4:55 pm

Road Scholar

March 19th, 2012
4:33 pm

Banks should have been thinking about the consequences of writing interest only or balloon payment $300,000 loans to people that only make $35,000 per year. They should have been able to look at the market and see done an objective analysis and known that 2000 square foot homes where not worth $300,000 and not loaned millions to developers to build out 100 of them on 40 acres of land. Instead all these banks saw was the bonuses they would receive for writing the loans.

Centrist

March 19th, 2012
4:56 pm

Marlboro Man posted “Bartow Co bank failed and one of the causes was attributed to US Reps who decided they should not pay back what they borrowed ? Where is the money ? Guess who is cleaning up their mess ? Well Graves is running for re election, he’s your chance.”

Evidently Graves is so popular that he has yet to draw any opposition:

http://ballotpedia.org/wiki/index.php/Georgia%27s_14th_congressional_district_elections,_2012

The 14th congressional district of Georgia will hold an election for the U.S. House of Representatives on November 6, 2012.

Candidates wishing to run must file by the signature filing deadline of May 25, 2012. The primary elections will be held on July 31, 2012.

Georgia’s 14th congressional district is a new district that will be created as a result of the 2010 Census. The district includes almost all of northwestern Georgia.

Candidates

Democratic Party (United States) Democratic Primary

No candidates have declared an intent to run yet

Republican Party Republican Primary

Tom Graves: U.S. Representative from 9th district