Solution to the Banking Crisis? Look to North Dakota

Monday, January 04, 2010

Fed up with the greed and recklessness of large national banks, critics of Wall Street are pointing to North Dakota as an alternative for reshaping the banking industry. North Dakota is the only state in the country to own its own bank, the Bank of North Dakota (BND), which managed to avoid needing a federal bailout and to run a hefty surplus. Instead of diving into subprime mortgages like its larger counterparts, BND has kept its focus on helping state agriculture and partnering with community banks. The BND helps share risk with smaller banks and keep interest rates under control and credit available for North Dakotans. Its loan portfolio is estimated to be more than $2.5 billion. Attorney and financial author Ellen Hodgson Brown says the country would be better off by opening more state-owned banks like BND.

-Noel Brinkerhoff
 

Comments

Kris-ND 5 years ago
Everybody points to the Bank of North Dakota as some savior of the economy, but what is never mentioned is the fact that this idea will NOT work in the states that overspend, like my original home state of California. California has some kind of addiction for spending every penny that comes in, and millions of pennies that don't. They would not be mature enough to handle a model like the bank of our state. The Bank of North Dakota works because we are by and large very responsible spenders in this state, from the legislature down to the individual North Dakotan. We didn't get sub-prime loans, and even if we had wanted one, the bank would not have given us the loan. Auto, mortgage, credit card default are all the lowest or one of the lowest in the nation. We don't, by and large, spend so much we cannot afford to keep up with the payments. A responsible spending state could make this work, but how many states in this country are responsible in their spending?

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