February 29, 2012
In the wake of the financial and mortgage crises, proponents are pushing for states to rely less on large national private banks and establish state-run financial institutions.
North Dakota serves as the model for this new experiment that 17 states are looking at. However, the state bank in North Dakota, the only one of its kind in the U.S., is not new, having been in operation since 1919.
With the Bank of North Dakota, financing is made available to support loans to students, farmers and others, while the bank’s profits go into the state budget to help provide more revenue for government programs.
Some states, such as Idaho and Vermont, have introduced legislation to study the idea of starting a state bank. Other states, like New Hampshire, Virginia, Hawaii, Washington and California, are debating bills that would create a state bank.