South Dakota Constitution Article 18 - Banking and Currency.
South Dakota Constitution – Article XVIII: Banking and Currency
Summary:
Article XVIII of the South Dakota Constitution is a very brief provision that addresses banking and currency, specifically concerning the establishment of state banks. It reflects a cautious approach toward the creation of banking institutions in the state.
Full Text of Article XVIII:
Article XVIII – Banking and Currency
No bank shall be established otherwise than under a general banking law.The state shall not be a stockholder in any banking institution.
Explanation and Key Points:
General Banking Law Required:
Banks can only be established under a general banking law, meaning there must be legislation in place that governs how banks are organized and operated.
This prevents the creation of banks by special legislative acts or privileges.
State Ownership Prohibited:
The State of South Dakota is prohibited from owning stock in any banking institution.
This ensures a separation between government and private banking enterprises, reflecting a principle of avoiding conflicts of interest and government entanglement in private finance.
Context and Importance:
This article ensures that banking in South Dakota is conducted within a uniform, legal framework and protects the financial system from political favoritism or state interference. While it’s short, it lays the foundation for the legal and regulatory environment in which private banks operate in the state.
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