Bank of North Dakota
Encyclopedia
The Bank of North Dakota (BND) is a state-owned and -run financial institution based in Bismarck, North Dakota
. Under state law the bank is the State of North Dakota
doing business as
the Bank of North Dakota.
The state and state agencies are required to place their funds in the bank, local governments are not required to do so. The Bank of North Dakota was established by legislative action in 1919 to promote agriculture, commerce and industry in North Dakota. Other entities may also open accounts at the Bank; however, BND offers fewer retail services than other institutions, and has only one office, limiting its competitiveness in consumer banking.
Instead, BND has taken a role more akin to a central bank
, and has many functions, such as check clearing, that might be expected from a branch office of the Federal Reserve. The bank does have an account with the Federal Reserve Bank
, but deposits are not insured by the Federal Deposit Insurance Corporation
, instead being guaranteed by the general fund of the state of North Dakota itself and the taxpayers of the state.
BND also guarantees student loans (through its Student Loans of North Dakota division), business development loans, and state and municipal bonds.
Though initially conceived by Non-Partisan League
populists
as a credit union
-style institution to free the farmers of the state from predatory lenders, the bank's functions were largely neutered by the time of its inception by the business-backed Independent Voters Association
. The recall of NPL Governor Lynn Frazier
effectively ended the initial plan, with BND taking a more conservative central banking role in state finance. The current president and CEO is Eric Hardmeyer
, however the bank is managed by the North Dakota Industrial Commission, which is composed of the Governor, Attorney General, and the Agriculture Commissioner (formerly the Agriculture and Labor Commissioner) of North Dakota.
The Bank of North Dakota is the only state-owned facility of its type in the United States other than the Puerto Rico Government Development Bank
.
Bismarck, North Dakota
Bismarck is the capital of the U.S. state of North Dakota and the county seat of Burleigh County. It is the second most populous city in North Dakota after Fargo. The city's population was 61,272 at the 2010 census, while its metropolitan population was 108,779...
. Under state law the bank is the State of North Dakota
North Dakota
North Dakota is a state located in the Midwestern region of the United States of America, along the Canadian border. The state is bordered by Canada to the north, Minnesota to the east, South Dakota to the south and Montana to the west. North Dakota is the 19th-largest state by area in the U.S....
doing business as
Doing business as
The phrase "doing business as" is a legal term used in the United States, meaning that the trade name, or fictitious business name, under which the business or operation is conducted and presented to the world is not the legal name of the legal person who actually own it and are responsible for it...
the Bank of North Dakota.
The state and state agencies are required to place their funds in the bank, local governments are not required to do so. The Bank of North Dakota was established by legislative action in 1919 to promote agriculture, commerce and industry in North Dakota. Other entities may also open accounts at the Bank; however, BND offers fewer retail services than other institutions, and has only one office, limiting its competitiveness in consumer banking.
Instead, BND has taken a role more akin to a central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
, and has many functions, such as check clearing, that might be expected from a branch office of the Federal Reserve. The bank does have an account with the Federal Reserve Bank
Federal Reserve Bank
The twelve Federal Reserve Banks form a major part of the Federal Reserve System, the central banking system of the United States. The twelve federal reserve banks together divide the nation into twelve Federal Reserve Districts, the twelve banking districts created by the Federal Reserve Act of...
, but deposits are not insured by the Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
, instead being guaranteed by the general fund of the state of North Dakota itself and the taxpayers of the state.
BND also guarantees student loans (through its Student Loans of North Dakota division), business development loans, and state and municipal bonds.
Though initially conceived by Non-Partisan League
Non-Partisan League
The Nonpartisan League was a political organization founded in 1915 in the United States by former Socialist Party organizer A. C. Townley. The Nonpartisan League advocated state control of mills, grain elevators, banks and other farm-related industries in order to reduce the power of corporate...
populists
Populism
Populism can be defined as an ideology, political philosophy, or type of discourse. Generally, a common theme compares "the people" against "the elite", and urges social and political system changes. It can also be defined as a rhetorical style employed by members of various political or social...
as a credit union
Credit union
A credit union is a cooperative financial institution that is owned and controlled by its members and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members...
-style institution to free the farmers of the state from predatory lenders, the bank's functions were largely neutered by the time of its inception by the business-backed Independent Voters Association
Independent Voters Association
The Independent Voters Association, or IVA, was a North Dakota political organization formed on May 1, 1918, at the height of the Non Partisan League's influence on the North Dakota Republican Party. The IVA was a conservative, capitalist faction created to counter the NPL's socialist leanings. ...
. The recall of NPL Governor Lynn Frazier
Lynn Frazier
Lynn Joseph Frazier was a politician from North Dakota, serving as a U.S. Senator from 1923 to 1941 and the 12th Governor of North Dakota of that state from 1917 until being recalled in 1921. He was the first American governor ever successfully recalled from office...
effectively ended the initial plan, with BND taking a more conservative central banking role in state finance. The current president and CEO is Eric Hardmeyer
Eric Hardmeyer
Eric Hardmeyer is the current president and CEO of the Bank of North Dakota.Hardmeyer is a Mott, North Dakota native, and a graduate of the University of North Dakota, and the University of Mary. He has been employed with the bank since 1985....
, however the bank is managed by the North Dakota Industrial Commission, which is composed of the Governor, Attorney General, and the Agriculture Commissioner (formerly the Agriculture and Labor Commissioner) of North Dakota.
The Bank of North Dakota is the only state-owned facility of its type in the United States other than the Puerto Rico Government Development Bank
Puerto Rico Government Development Bank
The Government Development Bank of Puerto Rico was the brainchild of Governor Rexford Guy Tugwell, who signed Law 252 of May 13, 1942, creating the institution in charge of economic development for the Government of Puerto Rico...
.
Presidents
| # | Name | Term |
|---|---|---|
| 1 | F.W. Cathro | 1919 |
| 2 | J. R. Waters | 1920–1921 |
| 3 | G.R. Green | 1922–1929 |
| 4 | C.F. Mudgett | 1930–1932 |
| 5 | R.M. Stangler | 1933–1936 |
| 6 | F.A. Vogel | 1937–1944 |
| 7 | H.C. Bowers | 1945–1956 |
| 8 | T.W. Sette | 1957–1961 |
| 9 | G.M. Thompson | 1962–1968 |
| 10 | H.L. Thorndal | 1969–1986 |
| 11 | Joseph Lamb | 1986–1992 |
| 12 | John Hoeven John Hoeven John Henry Hoeven III is the junior United States Senator from North Dakota. He is a member of the North Dakota Republican Party. He is expected to become the state's senior senator when Kent Conrad retires from the Senate in January 2013.Hoeven served as the 31st Governor of North Dakota,... |
1993–2000 |
| 13 | Eric Hardmeyer Eric Hardmeyer Eric Hardmeyer is the current president and CEO of the Bank of North Dakota.Hardmeyer is a Mott, North Dakota native, and a graduate of the University of North Dakota, and the University of Mary. He has been employed with the bank since 1985.... |
2001–present |
External links
- Bank of North Dakota website
- Student Loans of North Dakota website
- Mother JonesMother Jones (magazine)Mother Jones is an American independent news organization, featuring investigative and breaking news reporting on politics, the environment, human rights, and culture. Mother Jones has been nominated for 23 National Magazine Awards and has won six times, including for General Excellence in 2001,...
- How the Nation’s Only State-Owned Bank Became the Envy of Wall Street - Economy prompts fresh look at ND's socialist bank, By Dale Wetzel, Associated Press, 2/16/10.]
- North Dakota Industrial Commission