Why Not Ohio? A State-Owned Bank Like The Bank of North Dakota

[Dan Moadus]

Not a bad idea, on its face. Kind of like a credit union, which is owned by the people. Actually credit unions are even better. People have direct control over their operation with less government involvement.

[irishbobcat]

Why Not Ohio? A State-Owned Bank Like The Bank of North Dakota

The AP ran a story last week on the State Bank of North Dakota....

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(AP) The Bank of North Dakota - the nation's only state-owned bank - might seem to be a relic.

But now officials in other states are wondering if it is helping North Dakota sail through the national recession.

The Bank of North Dakota serves as an economic development agency and "banker's bank" that lessens the loan risks of private banks and helps them finance larger projects. It offers cheap loans to farmers, students and businesses.

The bank had almost $4 billion in assets and a $2.67 billion loan portfolio at the end of last year, according to its most recent quarterly financial report. It made $58.1 million in profits in 2009, setting a record for the sixth straight year. During the last decade, the bank funneled almost $300 million in profits to North Dakota's treasury.

The bank has the advantage of being the repository for most state funds, which can be used for loans and occasional relief for private banks that need a jolt of cash during sluggish credit markets.

The state earns roughly 0.25 percent less interest than state agencies would get from a commercial institution. The bank also pays no state or federal taxes and has no deposit insurance; North Dakota taxpayers are on the hook for any losses.

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Why not a state bank for Ohio? With a state bank like North Dakota's we could fund new businesses and restore our crumbling infrastructure.