In 2008, when the U.S. and the world were suffering from the worst economic recession since the Great Depression, North Dakota’s economy was thriving. Unemployment was the lowest in the nation, housing prices were stable, foreclosures were uncommon, there was a budget surplus of $1.2 billion, and the overall state economy grew by 7.3%.
What's North Dakota’s secret? Part of its success has to do with the Bank of North Dakota, a state-owned bank created in 1919. It is the only state-owned bank in the nation and the state is required by law to deposit all its funds into the bank. Its mission is “to promote agriculture, commerce and industry in North Dakota.” The bank partners with other private banks to give out loans to farmers, students, and small business owners within North Dakota. The bank even returns money to the state general fund – over the last 90 years it has returned $500 million. This successful banking model can be adopted by other states to solve budgetary crises, create jobs, increase lending and challenge the mainstream banking establishment.To learn more about it, check out Ellen Brown’s article, Bank on It: How Cash-Starved States Can Create Their Own Credit.