Vermont, Other States, Explore State-Owned Banks Posted by AVCU on 1:37 PM

AVCU President Joe Bergeron addressed Vermont’s House Ways & Means Committee recently regarding legislators’ desire to explore how a clone of the Bank of North Dakota might work in Vermont. He, as well as other panelists, had more questions than answers about the merits and practicality of starting a state-owned bank in Vermont. But, the Vermont legislature isn’t the only one scrutinizing the only bank owned by a state government in the country. So are Florida, Oregon, Washington and others.

The Bank of North Dakota has only one office, no drive up and no ATMs. Although it can do business with the general public by law, it rarely does. Instead, in Vermont parlance, it’s an amalgamation Vermont Housing Finance Agency, Vermont Student Assistance Corporation and Vermont Economic Development Authority, with some of the correspondent services of a corporate credit union thrown in. The bank was created 95 years ago, long before the first North Dakota credit union and before most banks as well. The difference between those institutions and counterparts in Vermont and elsewhere, is that they’ve worked with the Bank of North Dakota as a source of student lending, mortgages, business lending and check settlement since their inception. States like Vermont have long since created other relations to fill these needs, posing resistance to major change. Still, the knowledge that North Dakota’s state general fund received ½ of the bank’s profit of $60 million last year no doubt drew the attention of Vermont legislators, who administer a similarly populated rural state.

For more on the Bank of North Dakota see a 2/16 feature article in the Bismarck Tribune.