South Dakota Banking Industry Defeats Government Mandate Bill

The SDBA and its membership were successful this week in defeating a bill before the South Dakota Legislature that would have mandated how banks should operate their businesses. Senate Bill 182 titled “Prohibit discriminatory actions against persons engaged with the firearm industry” was brought by special interest groups outside South Dakota. The legislation was aimed only and squarely at banks and would have restricted a bank’s ability to do business with the state if a bank has policies regarding banking firearms customers. 

The measure would have eliminated a banking institution’s capacity to make fair business and lending decisions on financial factors. Instead, it mandated that banks who conduct business with the state are required to do business with a specific industry, regardless of considerations, including credit history or the ability to repay.

The bill was defeated before the Senate Commerce and Energy Committee by a vote of 6-2 on Tuesday, and an attempted "hoghouse" of HB 1314 (deleting the entire content of a bill and replacing it with different material) failed yesterday in the House Judiciary Committee.

"On behalf of the SDBA and its engaged member bankers, the Independent Community Bankers of South Dakota, South Dakota Chamber of Commerce & Industry, Greater Sioux Falls Chamber of Commerce and Elevate Rapid City,  I would like to tip my hat to each of you for your enormous efforts in defeating this measure," said SDBA President Karl Adam. "SDBA Legal Counsel Brett Koenecke and I can’t thank you all enough for your contribution to this effort—enormous to say the least."

The SDBA called on bankers this week and last week to contact legislators, send emails and share their opposition to the legislation. The SDBA will continue to monitor the issue as there is a remote chance that proponents could maneuver to keep the bill alive.

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