Letter: Behind the bank
I’d like to comment on Patrick Hunter’s letter of 5-7. While the Bank of North Dakota sounds like a good idea, one must consider when and why BND was formed, and how forming a state-owned bank may or may not work in present times.
The Bank of North Dakota was formed in 1919 as protection for farmers from “predatory lending” by out-of-state banks (Minneapolis) that were financing growth within the state at the time. People did not want to finance farms, then lose them to out-of-state entities. BND was started by populists in the NPL, or Non-Partisan League as a state bank/credit union.
Originally, the bank’s functions were blocked by out-of-state banks and financial players not being willing to purchase bonds backed by the BND, to finance the BND’s lending. The Independent Voters Association, a business-backed group of residents, attempted to shut the bank down. This resulted in the recall of Gov. Frazier and scrapping the original plan.
BND was then organized as a more conservative central bank. Loans are funded and deposits were insured by the general fund of North Dakota. All state funds are kept at the BND, which is not FDIC insured, but has an account with the Federal Reserve Bank providing the ability to clear financial instruments with neighboring states.
When I graduated from Williston High School in 1976, I was, as any North Dakota student was, offered and provided student loans at a reduced rate when compared with federal student loans while I attended any college within the state.
BND has worked only because of when it was formed, and the conservative values of the people of North Dakota that still exist. To quote my sister last year when I supported the DAPL protest … “we don’t want those kind of people (liberals with different ideas) up here.” North Dakota was, and still is to a large degree, a land-locked ultraconservative island. BND exists only because of the desire of North Dakotans to isolate themselves, and the predominant conservative ideologies.
The size of a bank’s carbon footprint is not relative to ownership type.
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