It has no automated teller machines or drive-up windows, doesn't issue credit cards and tends only a few thousand checking and savings accounts...
BISMARCK, N.D. — It has no automated teller machines or drive-up windows, doesn’t issue credit cards and tends only a few thousand checking and savings accounts.
Its only site is a glass steamboat-shaped office near the Missouri River.
The Bank of North Dakota — the nation’s only state-owned bank — was the brainchild of a failed flax farmer and one-time Socialist Party organizer.
But officials in Washington and other states wonder if it is helping North Dakota sail through the recession.
Most Read Nation & World Stories
- Several powerful earthquakes strike off the shore of Canada
- Trump administration eyes defining transgender out of existence
- Did you see that painting hanging behind Trump during ‘60 Minutes’ interview? Here's what we know about it
- 4 Americans among 5 dead in Costa Rica rafting accident
- Leaked video shows Khashoggi 'body double' after killing VIEW
Six Washington state House Democrats have introduced a bill that would authorize creation of a state-owned bank. Gubernatorial candidates in Florida and Oregon have pushed the same. A report to a Vermont House committee last month said the idea had “considerable merit.”
Liberal filmmaker Michael Moore promotes the bank on his Web site.
“There’s a lot of hurt out there, a lot of states that are in trouble, and they’re tying the Bank of North Dakota together with this economic success that we’re having right now,” said the bank’s president, Eric Hardmeyer.
He said he’s received “tons” of inquiries about the bank’s workings.
North Dakota has the nation’s lowest unemployment rate at 4.4 percent, soaring oil production and a robust budget surplus — but Hardmeyer says the bank isn’t responsible. “To put this at our feet is flattering, but it frankly isn’t true.”
The Bank of North Dakota serves as an economic-development agency and “banker’s bank” that lessens loan risks of private banks and helps them finance larger projects. Cheap loans are offered to farmers, students and businesses.
The bank reported a $58.1 million profit in 2009, a record for the sixth consecutive year. Almost $300 million in profits were funneled to North Dakota’s treasury in the past decade.
The bank has the advantage of being the repository for most state funds, which can be used for loans and occasional relief for private banks that need a jolt of cash.
“We think of ourselves as kind of a little mini-Federal Reserve,” Hardmeyer said.
The state earns roughly 0.25 percent less interest than state agencies would receive from a commercial institution. The bank also pays no state or federal taxes and has no deposit insurance; North Dakota taxpayers are on the hook for any losses.
The Bank of North Dakota was a cornerstone of the agenda of the Nonpartisan League, a farmers’ political insurgency.
Founded in 1915 by A.C. Townley, who became a Socialist Party organizer after he went broke growing flax, the NPL advocated state-owned banks to provide low-interest farm loans, along with state flour mills, grain elevators, meatpacking houses and hail insurance.
Supporters gained control of the Legislature and the governorship within five years. The movement’s power quickly waned, but two state-owned businesses survived — the Bank of North Dakota and a state flour mill and grain elevator.
Mauro Guillen, a professor of management at the Wharton School of Business, said it is unlikely other states would open similar banks, in part because of politics.
Hardmeyer isn’t so sure.
“When I see what’s going on around the country,” he said, “it’s not quite as far a leap as I thought it once was.”
Seattle Times staff contributed to this report.