Senate Bill 448 may provide some of the better entertainment of this session. Sponsored by Don Balfour (R-“I’m bulletproof”), it retroactively alters personal loan guarantees made by people who told a bank that they would once stand behind someone else’s credit to help induce a loan to be made, but now find dealing with debt collectors somewhat irritating.
Rumors as to the orgin behind SB 448 as to a small circle of developers, perhaps a circle as small as one, who are using the legislature rather than the time honored tradition of a bankruptcy attorney to absolve these debts.
While the bill passed the Senate without opposition (Remember all those recent posts about not wanting to get on the wrong side of Balfour?), some folks in the House are asking some tough questions. Like, “You do know that 25% of this state’s banks have failed, and those that are left would like to be able to collect on the bad debts bought from those banks to help cover the continued loan losses due to a bad economy, falling housing prices, and our inability to create jobs no matter how many times we say “jobs” in our re-election ads, right?”
While wounded, banking interests remain a powerful lobby in this state. The same can be said for developers. They are hotly divided over this bill. Who is around to break the stalemate? The Tea Party Patriots, who I suggested last week, apparently incorrectly, were not willing to stand up to Balfour and his constant drumbeat for crony capitalism. Their position on this bill:
More bailouts for the well-connected few? Did you think it was impossible in Georgia? Think again!
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.
Do we need to find solutions to help rebuild the housing industry? Absolutely, but this is NOT it!
SB 448 will hinder lending, it will impact credit, it will cause banking jobs to leave Georgia, and ultimately, the government/taxpayers will pay the price. This bill is not an answer to helping the housing industry or small business. It does not does it help the poor or regular citizens. It is simply a bailout for well-connected, wealthy developers.
SB 448 is unconstitutional – The retroactive effect of the pending legislation violates the contract clause of the U.S. constitution, as the government is violating private contracting rights.
What is even worse is that a shadow LLC was formed called “Citizens for a Better Georgia, Inc.” which provides no names or contact information, has apparently hired multiple lobbyists to influence the passing of this big developer bailout. We agree with Speaker Ralston that there should be greater transparency and this attempt to cover-up who is behind hiring these lobbyists to push this bill is a gross violation of that call for transparency.
SB 448 passed the Senate and is now being considered in the House. Please contact your state representative and the committee members below and tell them to please defeat this bill.
The House Banks and Banking Committee will hold hearings on Monday and Tuesday. We will be there and we will keep you updated.
The Committee Chairman is Rep. Greg Morris: 404.656.5115
Here’s a link to the full committee. Please call them today!
Pass the popcorn, sit back, and enjoy.