PUBLIC BANKING UNIT V: THE BANK OF NORTH DAKOTA PRESENT

In 2009, in the midst of the greatest economic recession since the Great Depression of the 1930’s, only one state ran a large budget surplus, cut personal and business taxes, and had the lowest unemployment and foreclosure rates in the nation. North Dakota.

Quoting from the “Public Banking Legislative Guide” by the Public Banking Institute in 2011, during some of the worst times of the Great Recession:

“While lawmakers across the country struggle with difficult, even heart-breaking budget dilemmas, the North Dakota legislature debates whether to cut taxes or increase services. True, North Dakota has some good things going for it, such as high global commodity prices in a farming economy, and an in-state oil and gas industry. But other states dwarf North Dakota’s agricultural production and have more oil and gas. (bold added)

This state does have something other states do not: control of the credit flowing to North Dakota families and Main Street businesses. Other states cede this control to bastions of Wall Street—the mega-banks. That’s where these states collectively deposit most of their trillions of dollars in tax revenues.

Private banks use these deposits to make investments that do not extend credit back to the states, their citizens and local businesses, making substantial profits that are siphoned off from communities, never to return.”

Bank of North Dakota

“The solution is public banking: establishing a state or municipality-owned bank in which to deposit state or municipal revenues and/or funds. And to transparently manage these deposits and resulting lending power in the public interest, strengthening (or in some cases reviving) local economies across the state.” (bold added)

Additionally, from Ellen Brown writing for Common Dreams in 2016:

“In November 2014, the Wall Street Journal reported that the Bank of North Dakota (BND), the nation’s only state-owned depository bank, was more profitable even than J.P. Morgan Chase and Goldman Sachs. The author attributed this remarkable performance to the state’s oil boom; but the boom has now become an oil bust, yet the BND’s profits continue to climb. Its 2015 Annual Report, published on April 20th, boasted its most profitable year ever.

The BND has had record profits for the last 12 years, each year outperforming the last. In 2015 it reported $130.7 million in earnings, total assets of $7.4 billion, capital of $749 million, and a return on investment of a whopping 18.1 percent.”

“By increasing its lending into a collapsing economy, the BND has helped prop the economy up. In 2015, it introduced new infrastructure programs to improve access to medical facilities, remodel or construct new schools, and build new road and water infrastructure. The Farm Financial Stability Loan was introduced to assist farmers affected by low commodity prices or below-average crop production. The BND also helped fund 300 new businesses.

And for those private local and community banks who fear a public bank will compete with them, there are these statements from the private banks of North Dakota taken from the BND website:

Barry Haugen, president of the Independent Community Banks of North Dakota (ICBND), shared in 2016, “Community banks are vital to the financial success of rural America, particularly as it relates to agricultural lending. Nowhere is that more true than in our state where ICBND-member banks provide financing for a diverse agricultural economy in a very rural state. Critical to our ability to fund diverse needs is Bank of North Dakota’s very important partnership with these local community banks. The programs developed and implemented by Bank of North Dakota provide the flexibility for community banks to serve their customers in times of growth and expansion, or periods of challenging commodity process as we’re currently experiencing. Without a doubt the Bank of North Dakota’s proactive response to the needs of its partners strengthens the important role that independent community banks provide in North Dakota.”

North Dakota Bankers Association president Rick Clayburgh provided these comments for the Bank’s 2016 Annual Report, “As the only state-owned bank in America, Bank of North Dakota is a unique financial institution and is the envy of many other states. The North Dakota Bankers Association (NDBA) is a champion of Bank of North Dakota. We applaud the agility, stability and opportunity Bank of North Dakota provides state government, local communities and citizens. North Dakota’s banks work closely with BND. Our members look at Bank of North Dakota as a partner, not a competitor. BND is agile when it comes to providing assistance and creating programs to meet the changing needs of our state. Whether it be adapting to fluctuations in major economic sectors like agriculture and energy, responding to catastrophic flooding, or helping first-time homeowners and startup businesses, BND can mobilize assets and partner with North Dakota banks to provide opportunities for communities and customers. BND programs help banks help their customers.”

Establishing a publicly owned bank in Wisconsin is not a partisan issue. North Dakota is one of the most Republican states in the nation. Public banks are a win for all. We don’t need to be captive to Wall Street mega-bank parasitism and predation. We can take back and control our local, main street economies. We can make our money a public utility working for the benefit of all.

Public Banking Unit VI will discuss: A Brighter Future

For further study on public banking:

https://thebndstory.nd.gov/ The BND Story from the BND website

https://www.demos.org/sites/default/files/publications/Demos_NationalBankPaper.pdf  DEMOS study “Banking on America”

https://ilsr.org/rule/bank-of-north-dakota-2/  “Public Banking” by the Institute for Local Self-Reliance

https://www.keiserreport.com/2014/11/wsj-reports-bank-of-north-dakota-outperforms-wall-street/     Oil didn’t save ND: The Keiser Report