Law Commons^™

The Dual State - Federal Regulation Of Financial Institutions - A Policy Proposal, Tamar Frankel

Faculty Scholarship

In 1983 South Dakota passed an Act permitting its chartered banks to sell and underwrite insurance.¹ The issue that I address is whether states should have the power to pass such a law. I am not concerned here with interpretation of positive law but with public policy implications.

The issue is a matter of congressional policy. Like most financial intermediaries banks are regulated by both state and federal laws,² but it is clear that the federal government has the power to preempt state laws that regulate banks. Therefore, whether South Dakota can pass the statute is not a …