South Dakota’s power in the financial services sector now has a very big number attached to it: $2.5 trillion. According to an article in the June 19 Sioux Falls Business Journal, as banks nationwide have consolidated their charters, many have chosen to make South Dakota a home base. Among them are big players worldwide: Citibank NA, Wells Fargo & Co. and Great Western Bank.
The article goes on to say that by the end of last year, the growth was enough to give South Dakota its top ranking, with 18 percent of the country’s total bank assets, surpassing Ohio by a few million. That amount represents the state’s total bank assets, according to the Federal Deposit Insurance Corp., and it ranks South Dakota first in the nation.
“There isn’t one reason why they come,” said Curt Everson, president of the South Dakota Bankers Association. “But I would guess the common threads are South Dakota has a well-established track record in terms of consistent support for the banking industry.”
The catalyst occurred in the early 1980s when the state lifted its usury cap, paving the way for Citibank to relocate credit card operations to Sioux Falls. Attorney Doug Hajek of Davenport, Evans, Hurwitz & Smith LLP has followed the growth in bank deposits ever since and said South Dakota’s willingness to let banks set rates and fees put it on the map. “Nobody knew where South Dakota was, and we’ve gone to having a very high profile in financial services,” he said. “I think it changed our way of thinking about things.” As banks locate home offices in the state, jobs have followed, he said. “When you establish that connection and you learn more about the infrastructure we have here and the work ethic here, it just makes sense for expansion to occur.”
Click here to read the full article from the Sioux Falls Business Journal.