Magazine article American Banker

Statehouse Report: South Dakoda: S.D. Eyes Expansion of Branching Powers

Magazine article American Banker

Statehouse Report: South Dakoda: S.D. Eyes Expansion of Branching Powers

Article excerpt

State-chartered banks in South Dakota could soon get the same authority to branch as freely within the state as their national bank counterparts.

The South Dakota Banking Commission has offered legislation that would ease the regulatory process for banks wanting to open branches or establish loan production offices or for start-ups looking to obtain state charters. Of the 89 banks and thrifts based in South Dakota, 67 are state-chartered, according to the Federal Deposit Insurance Corp.

"We want our state banks to be more on par with national banks," said Curt Jensen, a lawyer in Rapid City who works with the commission and helped draft the legislation. "We want to make sure there is parity in the marketplace."

Under the legislation, banks would no longer have to go in front of the five-person commission to get approval for branches. The same goes for the organizers of start-ups seeking state charters.

Though typically those hearings are not particularly controversial, they can become tough to schedule, Mr. Jensen said. Instead, decision-making authority would be shifted to the state banking director. Applicants could still present their case to the commission, if denied by the director.

"That would speed along routine applications," Mr. Jensen said.

Banks would also no longer have to prove there is "a need for additional banking in the community," he said. They would still have to prove they were well-capitalized and able to serve the community, but their viability would be determined by market conditions.

"Eliminating that 'need' requirement brings South Dakota in line with the same criteria that a national bank has when [it is] seeking to branch," Mr. …

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