September 22, 2008
Bailout's potential impact on church-state relations
Howard Friedman looks at what could happen for church-state relations if the government's proposed bailout is approved.
The bailout would give the government powers to purchase mortgage related assets (residential or commercial mortgages) from any financial institution with headquarters in the United States. Friedman points to an article by The Deal, which reports that several churches are short in their mortgage payments and face foreclosure.
"In many cases the mortgage holders are not financial institutions, but instead holders of church bonds. But where the mortgage lender is a bank, is the draft bailout legislation broad enough to permit purchase of shaky church mortgages by the Treasury? If so, are there any church-state problems with the federal government essentially owning an interest in church buildings?"