Who do you trust? Most South Dakotans unaware of the massive impact of financial firms on state's ec
South Dakota’s reputation as a financial haven is once again in national news thanks to the Pandora Papers as told by the Washington Post. Though I am far from an expert in trust and finance law, I thought I'd share some thoughts and data on how this happened.
Again, finance law is not my area of expertise, but there's an interesting history of how South Dakota initially drew large-name banks to Sioux Falls and then nourished the trust industry. I'm mostly interested in how this went on largely without scrutiny and below the public's radar.
It started in the late 1970s with a landmark court ruling — Marquette National Bank vs First of Omaha Corp — which allowed banks to follow usury laws in the states they were based in, not in the state the customers were living in.
This created a race to the bottom between a few states, scrapping usury laws to draw bank's credit card operations away from New York. Delaware and South Dakota stepped up in a big way and succeeded.
Read more: https://www.sdstandardnow.com/home/who-do-you-trust-most-south-dakotans-unaware-of-the-massive-impact-of-financial-firms-on-states-economy