Information, observations, and analysis from the James River valley on the Northern Plains-----
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Yesterday we posted the news that the Iowa Attorney General had obtained an agreement with MetaBank to reduce interest rates on loans for cars that consumers had bought from the Dan Nelson Auto companies. If you pursue the Iowa AGs link at the end of the post, you can inspect all the provisions of that agreement.
However, Erin of Iowa who has tracked the court actions against the Dan Nelson Auto firm and those taken in behalf of customers has posted a comment stating that MetaBank made its loans to Dan Nelson Auto when it knew the company was in serious financial trouble. [Scroll below and read her comment.]
The Iowa AG states that the agreement to provide consumers some relief from exorbitant interest rates and loan terms that are fraudulent will not mitigate the actions he has taken against Dan Nelson Auto.
The implications of MetaBank in this affair reaches deep into a part of the South Dakota economy. The state is referred to by some sardonic observers of the financial community as the Usury Capital of the World. The state made it very attractive and comfortable for lending institutions to conduct their operations in South Dakota.
The relationship of banking institutions and state officials is cause for suspicion. The state put some of its funds into banks and refused to inform the state treasurer how much was in the funds and where they were. Go figure that one out.
Then when state officials had reason to investigate some corporate doings within the banking industry, other officials very quickly passed a "gag law" which made it a crime for any state official to inform the press or the public about any investigations being made into corporate businesses. Our current governor while serving in the legislature led the charge to make sure any news of financial hanky panky was effectively suppressed. While that "gag law" has been modified somewhat, it still remains on the books.
In the meantime, the public has no idea of what kind of transactions and what kind of business dealings the banking industry is supporting in South Dakota.
From the Iowa Attorney General and Erin, we have information about how business practices were investigated and responded to in Iowa.
In the meantime, South Dakota is more interested in protecting its banking cronies than it is in keeping consumers from being ripped off.
I hope Erin keeps us posted on developments in this matter. We need some tips on how to run a government for the people.