Why am I writing about a bank in North Dakota, USA? Because this bank is a publicly owned bank which is the only established one in the US so far.
This seemingly business related post is actually a post on civic engagement. How so? The Bank of North Dakota (BND) has a vision to “be helpful to and assist in the development of… financial institutions… within the State.” Thanks to BND small businesses lending is made possible as they provide loan participation and other support to local banks.
North Dakota community banks averaged 434% more lending for small businesses over the last decade than the national average of the US. That’s a huge number to pull off and a lot of people that have been helped with because of that.
The benefits of having an established publicly owned bank are numerous:
- Maintain a higher average loan-to-asset ratio leading to economically productive lending
- Save the people of the state a lot of money by using normal deposits from the state to fund loans the bank makes
- Help the state by borrowing from the Federal Reserve’s discount window and lending directly to local governments at lower rates than the municipal bond market provides
As the only state owned bank in the USA, BND has offered its citizens reliable banking for college/university tuition savings, financing homes and starting up small local businesses.
By Chris Ng