What do West Virginia, Mississippi and California have in common?

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West Virginia has the worst legal climate in the U.S., followed by Louisiana, Mississippi, Alabama and California, according to a survey of corporate attorneys and business executives.

The survey ... asked respondents to rank states based on their overall treatment of tort, contract and class-action litigation, including the impartiality and competence of their judges and the fairness of their juries.

Delaware was ranked No. 1, followed by North Dakota, Nebraska, Indiana and Iowa.

Two-thirds of the corporate attorneys and executives surveyed said a state’s legal climate is likely to affect company decisions, such as where to locate or expand.

http://phoenix.bizjournals.com/phoenix/stories/2010/03/22/daily63.html?ana=yfcpc

[Peikko 1,575]

Oh dear.

[scandal 951]

South Dakota state laws allow any bank chartered in the state to charge whatever interest rate they like on credit cards. That's why Citibank and others moved their credit card operations to SD. I'm not sure if the new federal legislation will impact this, I don't think it does.

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Do you ever wonder why your Citibank credit card bill comes from South Dakota, and your payment goes there as well, when you know that Citibank is headquartered in New York? It is because of a combination of federal law and 50 different state laws that allow a bank in New York to use a South Dakota address to bill a customer in California.

Many states have a usury law which limits the interest rate that a company may charge.

Most of these laws capped interest rates at 18%. However, some states, such as South Dakota, do not have a usury law, allowing in-state businesses to charge as much interest as they want.

Congress has the power to regulate interstate commerce, which includes regulating nationally chartered banks which do business in more than one state. In the Supreme Court case Marquette v. First Omaha Service Corp. in 1978 the Court ruled that nationally chartered banks do not have to follow state law in which they do business, but only the law of the state in which the company is incorporated. Because state usury laws were not uniform this rendered all of them irrelevant as credit card companies picked up and moved to the states that allowed them to charge the highest interest rates.