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In 1980, Citibank took advantage of that decision and moved its money-losing credit-card operations to South Dakota, after persuading that state's legislature and governor to repeal its anti-usury law.
Soon, Citi was losing money on every card transaction its customers made. The bank needed a solution. It found one in South Dakota, a state that in 1980 did not regulate bank interest rates of any kind.
Because South Dakota had just passed a law that eliminated caps on interest rates. And the Supreme Court had just ruled that banks could charge interest based on where their credit-card operations were headquartered, even if the bank's main operations were somewhere else.
Delaware is home to the credit card businesses of Chase, Discover and Barclaycard U.S., ing to the Federal Deposit Insurance Corp. Bank of America and Citi also maintain certain card operations there. Together, those issuers represent about half of the U.S. credit card market.
The Division of Banking is charged with the regulation and supervision of state chartered and licensed financial institutions, to maintain stability and public confidence in state chartered institutions and to protect public interests.
However, some states, such as South Dakota, do not have a usury law, allowing in-state businesses to charge as much interest as they want. Congress has the power to regulate interstate commerce, which includes regulating nationally chartered banks which do business in more than one state.
SOUTH DAKOTA A judgment becomes a lien on real property for a period of 10 years. S.D. Codified Laws § 15-16-7. A judgment may be renewed for an additional period of ten years.
Best Banks for Small Businesses in South Dakota Bluevine: Best Overall Bank for Small Businesses in South Dakota. Capital One: Beat Bank for Managing Your Small Businesses Finances. U.S. Bank: best Bank for Cash Management Services. Bank of America: Good at Financial Management (Online) Lili Bank: Best for Charging No Fees.