Despite COVID, some interesting discussions on use of federal funds to fight COVID, and some splits in the majority party over certain issues, the 2021 Legislature was generally positive for banks and trust companies. For trust companies and bank trust departments, 2021 marked the 23rd year the Governor’s Task Force on Trust Administration Review and Reform presented its trust bill to the Legislature, and the 23rd year of passage.
Davenport Evans lawyer Terry N. Prendergast prepared this article for the Davenport Evans Banking eNewsletter. Click on the link below to join the list.
Highlights for this year in which you may be interested are clarification of the duties of successor trustees and clarification that in a directed trust situation, the trustee is not liable for loss on tax filings or positions taken based on recommendations or instructions received from a tax preparer or professional the trustee was directed to use by the grantor or an investment advisor or trust protector. Also, the Division of Banking previously had three chapters of the South Dakota Code dealing with regulation of (1) bank trust companies; (2) trust companies and (3) non-depositary trust companies, and much surplusage was removed in converting these three chapters of the Code to two chapters.
Another bill of interest to bankers and their business clients provides a limit on liability on lawsuits for exposure or potential exposure to COVID-19 unless there is (a) a diagnosis of COVID-19 and (b) there was intentional exposure with intent to transmit COVID-19. There are also exceptions for health care providers, landlords, and those dealing in personal protective equipment. The law sunsets on December 31, 2022.
Finally, one of the most watched laws affecting banking was the act to authorize banks to engage in business with industrial hemp or marijuana licensees and associated persons. This is a very simple bill which states that a bank may, directly or through subsidiaries, carry on the business of banking with any person licensed in this state to engage in the business of industrial hemp or marijuana, or with any person engaging in legal business dealings with such licensee. Note that the bank must still determine that the party it is dealing with is licensed to engage in the business of industrial hemp or marijuana or is engaged in “legal” business dealings with the licensee.
Davenport, Evans, Hurwitz & Smith, LLP, located in Sioux Falls, South Dakota, is one of the State’s largest law firms. The firm’s attorneys provide business and litigation counsel to individuals and corporate clients in a variety of practice areas. For more information about Davenport Evans, visit www.dehs.com.