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Justin Pearson, Fargo, column: State-owned bank gives N.D. an edge

By Justin Pearson FARGO -- As North Dakota residents, we are certainly excited to witness the positive (and long overdue) national media attention on the economic boom that our state is experiencing. As we bask in this recognition, let's not forg...

By Justin Pearson

FARGO -- As North Dakota residents, we are certainly excited to witness the positive (and long overdue) national media attention on the economic boom that our state is experiencing.

As we bask in this recognition, let's not forget one of the most important catalysts for this success: our very own Bank of North Dakota.

We are the only state in the nation that has a taxpayer-owned bank, a concept that has been the envy of several other states and spawned a few imitators.

Most recently, the state of California passed a bill to study the feasibility of establishing a state-owned bank to address the growing state deficit.

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As the nation's curiosity in a state-owned bank continues to grow, do not be surprised to see current BND president Eric Hardmeyer or former bank president and current U.S. Sen. John Hoeven as featured guests across the nation explaining how this "state-owned bank" concept has worked for North Dakota.

You have to go back 90 years to our ancestral farmers to understand why there was a need for this type of institution in North Dakota. Frustrated by the grain pricing from out-of-state dealers and the high interest rates offered by national banks, our state legislators sought to create an environment where North Dakota farmers could have more control over their destinies.

In 1919, the Legislature created the Bank of North Dakota and the North Dakota Mill and Elevator Association.

In the early years, the bank was tagged with the mission to "promote agriculture, commerce and industry" and it still stands by those principles today.

North Dakota Tax Commissioner Cory Fong continues to report on the record gross domestic product growth in this state, which makes it exciting to recognize how this successful cycle begins in North Dakota. Many sectors of our state continue to grow and increase tax revenues, and the Bank of North Dakota becomes the depository for all of those state tax collections and fees.

The impact to the state comes in two ways.

First, income earned at the bank has been available to transfer back into the state's general fund, from which it can then be used to pay for many state services that benefit North Dakotans.

Second, BND can inject those bank deposits into the state's economy through various bank financing programs. The bank's extensive line of lending products are used to help local farmers, small businesses, private banks, residential housing and North Dakota college students.

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In no situation is BND interested in competing with our local or national private banks.

BND's focus is to collaborate and partner with not only private banks but also other loan enhancement programs. These include programs run by the Small Business Administration, the U.S. Department of Agriculture, the North Dakota Development Fund, regional development councils, economic development agencies and the Greater Fargo Moorhead Economic Development Corporation.

The end result of this collaboration is a financial package that will not only create economic growth, capital investment and jobs right here in North Dakota, but also might have gone unfunded without BND's participation.

As a local economic developer, I recognize the benefit that a state-owned bank brings and how it sets North Dakota apart.

And as federal regulations and lending requirements continue to tighten, the advantage of having the Bank of North Dakota to participate in these opportunities could not be more apparent.

Pearson is vice president for business retention and expansion for the Greater Fargo-Moorhead Economic Development Corp.

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