It turns out that the bank's chairman, John A. Allison IV, is a devoted Ayn Rand student and a vocal critic of the government's interventions in the economy. He also feels that the current financial crisis, often pilloried as the result of excesses wrought by an era of free-market madness, was largely brought about by the government itself, through the monetary interventions of the Fed and government regulations that supported irresponsible lending by the GSEs.
Here are excerpts from, "Give BB&T liberty, but not a bailout":
"OVER much of the last four decades, John A. Allison IV built BB&T from a local bank in North Carolina into a regional powerhouse that has weathered the economic crisis far better than many of its troubled rivals — largely by avoiding financial gimmickry. And in his spare time, Mr. Allison travels the country making speeches about his bank’s distinctive philosophy...
...Mr. Allison, who remains BB&T’s chairman after retiring as chief executive in December, has emerged as perhaps the most vocal proponent of Ms. Rand’s ideas and of the dangers of government meddling in the markets. For a dedicated Randian like him, the government’s headlong rush to try to rescue and fix the economy is a horrifying realization of his worst fears..."
While your humble editor is not exactly a learned Ayn Rand disciple (still haven't read Atlas Shrugged), I'm sure many of us have heard the accusations that Rand's philosophy of individualism somehow promotes a sociopathic disregard for society as a whole.
With that in mind, here's an excellent example from this article of how BB&T have followed through on their philosophy to protect their firm and our society by working to uphold property rights and keep borrowers (the bank's customers) out of financial danger.
"Mr. Allison cites two examples in which the bank’s philosophy guided its real-world decisions.
After the Supreme Court upheld the right of local governments in 2005 to condemn private property and hand it to someone else for commercial development, he says, BB&T refused to make loans to developers who obtained property that way.
He also says BB&T decided not to offer the controversial “pick a payment” mortgages that got so many of its competitors into trouble. Such loans, also known as “option A.R.M.’s” or “negative amortization loans,” allow borrowers to make payments that don’t even cover the interest on the loans, which causes the amount they owe to grow.
“While we did not foresee the decline in the real estate market, we knew home prices would not continue to appreciate at 15 percent per year forever,” he says, adding that his bank knew that pick-a-payment loans would be trouble for many homeowners.
“We believe Rand’s concept of the ‘trader principle,’ where life is about trading value for value, where both parties benefit from the transaction,” he says."
Yes, morality is inherent to true capitalism. Go read the whole thing.
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1. Atlas Shrugged: from fiction to fact? - Finance Trends.
2. Thomas E. Woods interview: Meltdown - Finance Trends.
