CANDO, N.D. -- Many think North Dakota has been insulated from the U.S. economic crisis, thanks in part to our strong agriculture and energy sectors. But they would be hard pressed to find a North Dakotan who has not been impacted by the national recession.
Perhaps you have a child who has lost his job, or your plans to retire have been postponed for years, or your interest on savings has been all but eliminated or your business is struggling from weaker sales.
Even though North Dakotans have been good stewards of our resources, we still have been impacted because we are financially interconnected to the rest of the nation.
As the Senate takes up financial regulatory reform, we have an once-in-a-lifetime chance to make sure that we lay the foundation for a sound and stable economy to keep future generations safe from the kind of economic chaos that has brought unemployment, foreclosures, empty storefronts and reduced services.
There are two forces at work in the debate over regulatory reform: Those who want real reform of Wall Street's reckless practices that caused the near-collapse of the global economy, and those who want the status quo.
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As a community banker in Cando for the past 30 years, I don't believe that maintaining the status quo is an option. I strongly support real reform. Without it, the Wall Street megafirms will continue to grow even bigger and more powerful.
Did you know that although there are 7,960 banks in the U.S., just five of them control more than 50 percent of our nation's deposits? Did you know that Citigroup and Bank of America alone got more than $500 billion in direct capital injections and government debt guarantees?
Did you know that Wall Street financial firms paid out a record $140 billion in bonuses in 2009, the year after they received record bailouts? And did you know that Goldman Sachs, the investment firm that is under federal investigation, spent $2.8 million in 2009 to influence Congress and the administration?
Yet, even though my small community bank played by the rules, didn't break any laws and didn't get a bailout, our FDIC insurance premiums jumped from $9,941 in 2008 to $68,810 in 2009. And on top of that, we were required to prepay $203,595 to the FDIC for future years!
Community banks didn't cause this mess, but we are forced to pay for it through higher insurance premiums and massive regulatory burden.
If we don't put an end to the too-big-to-fail policies that allowed this imbalance, then the next time a crisis occurs, the needs of Main Street once again will be sacrificed to the greed of Wall Street. Consumers will lose the personalized services that community banks provide, and small businesses will lose their strongest champions.
If we don't pass real financial reform that holds the currently unregulated firms to the same rules that community banks must follow, then we leave ourselves open to the kind of irresponsible lending practices that preyed on unsophisticated borrowers and led to the subprime mortgage crisis.
If we don't pass real financial reform -- if we uphold the status quo -- then we leave ourselves and our children vulnerable to the kind of wild economic ride that has put our savings, our pensions, our homes, our jobs and even our communities at risk.
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It would be a shame to waste this crisis. It is our responsibility to do something.
Tell Sens. Kent Conrad and Byron Dorgan, both D-N.D., that the future of North Dakota depends upon real financial reform.
Jorde is president of CountryBank USA.
