Bank of North Dakota: A Century of Unique State-Owned Banking in a Conservative Landscape
- Established by the Nonpartisan League in 1919, the Bank of North Dakota is the only state-owned bank in the U.S.
- With assets nearing $11 billion, it has gained support from North Dakota’s conservative political leaders despite its socialist origins.
- The bank plays a critical role in managing state deposits and providing loans to aid local economic development.
BISMARCK, N.D. — The Bank of North Dakota, established in 1919 by the Nonpartisan League, remains the only state-owned and operated bank in the United States. The Nonpartisan League emerged from the progressive farmer-labor movement, channeling a populist sentiment against large banks and corporations.
Arthur C. Townley, a former Socialist Party member and failing flax farmer, mobilized support for public ownership of banks and various key industries, culminating in the establishment of the bank. More than a century later, the Bank of North Dakota manages approximately $11 billion in assets and has maintained broad support from the state’s political leaders, even as the region’s politics shifted from progressive roots to strong conservatism.
“I think it’s weird, right? We’re one of the most conservative states in the union, and we have this state-run bank that was started by first-generation Norwegian immigrants,” said North Dakota Governor Kelly Armstrong. He expressed gratitude for the bank but acknowledged the challenges of establishing a similar institution today.
The bank continues to meld political and financial objectives by overseeing state deposits, issuing loans, and supporting local economic initiatives, including subsidizing interest rates for agriculture and energy projects.
Democratic and progressive candidates use the Bank of North Dakota as a model while advocating for the expansion of public banking across the country. In the run-up to the 2026 midterm elections, the bank is tied to the growing conversation around public banking amidst another wave of populism in the U.S.
A Foundation of Populism
Historically, about a dozen states have established state-run banks, but most have ceased operations by 1900. Lawmakers view the Bank of North Dakota as a potential template for revitalizing public banking initiatives nationally. Politicians such as Washington state Senator Bob Hasegawa highlight the need for states to leverage their own resources for public infrastructure projects.
Other states, including Massachusetts and California, are exploring similar public banking initiatives, driven by progressive populism. Representative Alexandria Ocasio-Cortez has introduced legislation to streamline the establishment of public banks in collaboration with her colleagues.
“We’re populists, whereas in other parts of the country Republicans aren’t as populist as they are conservative,” said Senator Kevin Cramer, suggesting that the Bank of North Dakota’s model attracts interest from both Democrats and Republicans.
A Bank for Community Resilience
The Bank of North Dakota primarily engages in partnership loans, commercial real estate, and agricultural loans while helping small community banks secure funding for projects beyond their financial capabilities. By focusing on participation loans and direct student loans for residents, the bank supports various local initiatives while maintaining a stable deposit base from state treasury funds.
The bank’s governance structure, featuring oversight from the Industrial Commission, allows it to operate without competing against local banks. CEO Don Morgan noted that the bank serves at the pleasure of the Industrial Commission while ensuring adherence to its foundational principles.
Recently, the bank facilitated a crucial financing deal for Rainbow Energy’s acquisition of the Coal Creek Station, effectively coordinating the transaction to ensure job retention in the region’s coal industry. Rainbow’s CEO remarked that the deal would not have succeeded without the bank’s involvement.
Innovation Meets Tradition
In a move that combines modern finance with traditional banking, the Bank of North Dakota is launching its first stablecoin, the Roughrider Coin. This initiative aims to enhance real-time bank-to-bank transfers within the state’s network of community banks.
The bank’s continued evolution shows how it balances its historical roots with modern economic challenges and opportunities. As North Dakota grapples with the implications of evolving energy production and agriculture, the state-owned bank remains a critical component of its economic landscape.
News Courtesy of CNBC
