When BB&T bank — which has 241 branches in Northern Virginia, Washington and Maryland — announced in January it would no longer finance commercial development based on eminent-domain seizures, there was no way the bank could know it would trigger a rush of new accounts.
“The policy was announced in January, and in February we had more net new accounts posted than in any previous month in the bank’s history,” BB&T spokesman Bob Denham said.
The 134-year-old, 1,400-branch bank netted 16,462 new accounts in February, as compared with 10,611 in February 2005 and 11,197 in January 2006.
And though Denham acknowledged that March’s new high of 21,591 net new accounts probably commingled the impact of two promotions that month, he insisted that February’s spike was not influenced by variables such as net new branches opened. BB&T has had about the same number of branches for the last five years, he said.
“I personally have received probably 30 to 40 inquiries and comments from individuals telling me how much they appreciated the stand,” Denham said, explaining that many inquiries were from outside the bank’s operating area, asking for local locations of BB&T branches.
But despite BB&T’s experience with the policy, no other major bank in the 9,200-bank/S&L industry appears to have followed suit.
American Bankers Association Senior Economist Keith Leggett said he knew of no other major bank imitating the practice, and calls to both the Mortgage Bankers Association and the Consumer Bankers Association turned up no names.
Winston-Salem, N.C.-based BB&T has a commercial loan portfolio of $40 billion — which, Denham conceded, never represented much eminent-domain lending — and posted second quarter profits of $429 million. BB&T did, however, lose one multi-million dollar account as a result of the policy, Denham said.
“Over the years, we have used authorized eminent domain for redevelopment,” confirmed Pat Brown, executive director of Charleston Urban Renewal Authority, “and BB&T took a strong stand that they were against that. So it simply didn’t make sense for us to keep our funds there.” Brown said, however, that, unlike some eminent-domain redevelopment, CURA uses the authority only for slum and blight removal.
