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Bank of North Dakota. Why not use this as a model and save our banking system?

April 6th, 2010

Why can’t we have a bank for all of America like the Bank of North Dakota?

The Bank of North Dakota, unlike commercial banks, is not part of the FDIC. It was founded in 1919, and is the only state owned bank in the country. All deposits are guaranteed by the state. The bulk of the deposits come from state run institutions, tax revenues and pension contributions. In 2009 the Bank of North Dakota had a profit of $58.1 million.

The Bank of North Dakota avoided the sub-prime lending fiasco. Overall, the state itself is on solid financial footings with one of the lowest foreclosure rates in the nation. The State has a delinquency rate of about 1.84%, the lowest in the country. This bank has to be doing something right. It is keeping it simple. No fancy derivatives. No credit swaps.

Other states are considering their own bank. Oregon Democrat and candidate for the governor’s mansion, Bill Bradbury, is calling for the creation of a Bank of Oregon.

In Michigan, another Democrat, Virg Bernero would like to see a Bank of Michigan.

The movement is on and some day we will all sleep peacefully knowing that our money and our pensions and our mortgage are secured in a bank, just like the Bank of North Dakota.

Entry Filed under: The call for state owned banks