In Sioux Falls, S.D. — 1,200 miles from Wall Street — the lending laws are as wide open as the skies.
“Well, South Dakota has never been a state that is much on government regulation from any level,” says Dan Nelson of the Sioux Falls Area Chamber of Commerce
With no ceiling on interest rates or fees, this rural state is home to the nation's largest issuer of credit cards — Citibank.
But critics say the policies that have brought thousands of jobs here, and to other bank-friendly states like Delaware, are hurting consumers nationwide.
“The credit card companies have moved to states with weak consumer protection laws, and they're allowed to apply those laws to consumers everywhere,” says Ed Mierzwinski with the U.S. Public Interest Research Group.
That’s because there is no federal law capping interest rates.
“Banks are imposing $39 late fees and also raising your interest rate to 25 percent or more if you’re late,” says Mierzwinski.
Credit card fees have skyrocketed since 1980, from $2.6 billion to $21.5 billion.
But what really has consumer advocates furious is a practice called "universal default," where, if you're late paying any bill, the credit card company will raise your rate, sending some north of 20 percent.
This week, Sen. Chris Dodd, D-Conn., will again offer a bill to outlaw universal default and require banks to clearly disclose rate hikes — something the banks have successfully opposed. The nation's top three bank card issuers are among the top 50 corporate contributors to political campaigns.
“I've never been able to get a bill passed of any major significance because they're so big and so influential,” says Dodd.
The American Bankers Association, in a statement to NBC News, says banks need universal default, arguing, “Outlawing this risk management tool would have the effect of either restricting credit or raising the cost of credit for everyone, and we would oppose it.”
The credit card industry is helping cities like Sioux Falls grow, but, critics claim, leaving consumers wide open.