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
td
March 19th, 2012
5:00 pm
Centrist
March 19th, 2012
4:30 pm
I saw a report a few weeks ago talking about the real cost of older people on the states. There is a hidden high Medicaid cost Florida is paying for the last few months of life for the elderly. It is a trade off if you as a state wants to be competitive for attacking the elderly for retirement.
I am moving to Florida not only to save 6% in state taxes but also because I have a condo on the beach that is already paid for.
woodrow
March 19th, 2012
5:11 pm
Basically the banks are saying stop the bail-outs. But only after we bail the banks out. Now I’m thinking we need to not bail anyone out. Let’s go back to calling it charity. Like rich peoples taxes being low. That’s charity we cannot afford. And we can’t afford to let businesses escape taxes either. They make money, they pay taxes. They won’t let me escape taxes. Why make exceptions for anyone?
Centrist
March 19th, 2012
5:15 pm
td posted “I am moving to Florida not only to save 6% in state taxes but also because I have a condo on the beach that is already paid for.”
Nice.
I am shying away from OWNING a beach condo because of the tax, condo fees, and hurricane insurance all of which skyrocketed. Currently, renting for vacations is a better alternative than owning, and Mexico and some Caribbean islands are even better than Florida. The economics are always in flux, so owning might again be the way to go in the future. Wish you the best with your paid off condo, and hope you enjoy it full time when you retire.
Double Zero Eight
March 19th, 2012
5:40 pm
The lobbyists own our politicians in Georgia.
There will never be a bill against lobbying that has
“any teeth”. This coincides with an article on AJC
this morning that ranked Georgia as the most corrupt
state.
Bob
March 19th, 2012
5:45 pm
This is not the same Republican party that helped to build our nation/state…Reynolds, Balfour, Rogers, even Graves…all crooks using the mantra of being a conservative Republican. Past time to outsource Gov’t adm and get all these Lawyers, Real Estate con men, and motivational speakers out of making decisions. Why are we continuing to finish last as a state?
findog
March 19th, 2012
5:52 pm
Graves doesn’t have any opposition because the GOP has threatened all who dare
Bob
March 19th, 2012
6:05 pm
@findog…how can Graves face his constituents with a straight face? What part of fraud, lying, theft, and cheat does he nor understand? And, how can voters in my district vote for him? The “endtimes” are near…repent!
Look before I leap...
March 19th, 2012
6:07 pm
Not sure why the uproar here.
The act specified addresses secondary creditors only.
It does not apply to federally insured banks.
If I am reading the bill correctly, this seems to target the debt purchase industry wherein they buy old/written-off debt from a lender at a discount, then pursue the face value of the write-off from the borrower.
Joe Blow has a Visa card with BigBadBank and runs up a $3,000 balance then stops paying BigBadBank.
BigBadBank calls poor Joe daily for months trying to get their money, adding late fees, bumping up the interest rate from the 9% teaser rate to the 32% default rate along the way and trashing Joe’s credit score.
Finally, BigBadBank is forced to write-off the debt against their bad debt reserve cuz ole Joe just isn’t gonna play.
Enter Shyster, Shyster and Shark, PA and their debt purchase division, PayYourbillsYouDeadbeat who has an agreement to buy the face value of the debt from BigBadBank for a fraction of its book value (say $300). BigBadBank gets some of its money back to offset the hit to its reserve and incurs no additional collection costs.
Now PayYourDebtsYouDeadbeat starts calling on ole Joe for the entire $3,000.
This bills says PYDYD can’t do that. They are only entitled to the $300 plus accrued interest on the $300 at the original rate of 9% – from the time PYDYD acquired the debt. And PYDYD must disclose what they paid for the debt to begin with.
Am I reading the bill incorrectly?
findog
March 19th, 2012
6:08 pm
Bob, did you get all those free mailings from Graves during the last set of elections in 2010? Isn’t Franking priveledges great for the incumbant?
td
March 19th, 2012
6:10 pm
findog
March 19th, 2012
5:52 pm
Sorry but I am calling BS on that statement. I live in Paulding county and am an active member of the county Republican party. Paulding is the largest county of the new 14th and I have NEVER heard anyone threaten or even discourage anyone from running in a primary against Graves or any other politician.
Centrist
March 19th, 2012
6:19 pm
New Political Insider blog about the legislature up.
http://blogs.ajc.com/political-insider-jim-galloway/2012/03/19/senate-democrat-deals-for-jobs-appointments-fueled-passage-of-charter-school-measure/?cp=1#comment-215124
Bob
March 19th, 2012
6:21 pm
@findog…yeah, I received them and what a waste. Too bad td (a fine person and intelligent blogger) can’t see what’s going on in our party. McCain, Romney, Graves, Palin, Graves…joke!
findog
March 19th, 2012
6:41 pm
9th in Hall not the 14th
ReadBeforeYouComment
March 19th, 2012
8:51 pm
People, you are not reading/understanding!!! The “Tea Party” and Harold Reynolds (CEO BankSouth) are lobbying to DEFEAT the Balfour introduced bill. They are OPPOSED to what amounts to a bailout of developers. Totally agree, Balfour needs to be sent packing!!
ReadBeforeYouComment
March 19th, 2012
8:55 pm
Also, Harold Reynolds IS NOT sames as Linger Linger Development or the owner of Reynolds Plantation. Harold Reynolds is NOT a developer and clearly states in his letter that Balfour’s bill is wrong!
Madison
March 19th, 2012
9:56 pm
…and then there’s SB402 that will allow state pension mgrs to SECRETLY invest in risky mortgage backed securities and products offered by the corporate donors.
Z
March 19th, 2012
10:46 pm
If this session of our elected Republican Legislators hasn’t proved to everyone with an iota of sense that this group of fools making laws for our state needs to go, then I don’t know what does. The audacity of this republican group of morons is mind boggling. First they pass bills taking rights away from women and now they want to give their buddy developers the gift of not having to pay the developer loans back to the bank..Are they freaking nuts!!!!!! Have they even brought up one Jobs bill???????
Get your Voter ID, Get Registered and vote come November 2012 election. The state of Ga. can’t afford these lunatics in office another year.
Michael
March 19th, 2012
10:47 pm
People complain about lawyers. I talked to three people today who had no money — oh, I’m unemployed, oh, I’m a student, oh, I have no money. What do you all think lawyers cost to go to court with you? $50? Then you call us greedy and underhanded as if we’re all driving around in a Porsche and smoking $100 bills during our backroom deals like they do on tv. My education cost me about $60,000. If you have no money, stop calling us.
nomaj
March 20th, 2012
2:17 am
Don Balfour’s legislation is absolutely BRILLIANT! What a guy!
Just think how far we can take this remarkable concept: “You know, I’ve decided I can’t afford to pay you these monthly car payments anymore, but I really like the car, so I’ll just keep it anyway, thanks.”
Big Hat
March 20th, 2012
9:42 am
In the words of the great American, Steve Ballmer: “Developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers, developers!”