The Bank of North Dakota : The Model for Radical Federalist State Banking
Why Every State Must Follow North Dakota’s Lead
In 1919, North Dakota’s farmers and small businesses were being crushed by Wall Street banks that cared more about speculation than survival. That year, they did something no other state had dared to do: they took control of their own financial destiny and created the Bank of North Dakota.
More than a century later, while private banks have collapsed and been bailed out, the Bank of North Dakota has never failed, never needed a bailout, and has returned over a billion dollars in profit to the state. It remains the strongest financial institution in the country—proving that financial sovereignty is not just possible, but necessary.
A state that does not control its own banking system is not truly sovereign.
Most stable bank in the U.S. : Never failed. Never needed a bailout. Always profitable.
Massive public benefit : Over one billion dollars returned to North Dakota’s budget.
Recession-proofing : Keeps credit flowing in downturns. Shields the state from financial crises.
Local-first finance : Works with community banks instead of competing against them.
Ag & small business powerhouse : Funds farmers and entrepreneurs when private banks won’t.
No Wall Street strings : State-controlled. No outside shareholders. No profit-driven risk.
The Bank of North Dakota is not just a success story—it is a blueprint for every state seeking true independence.
I. The Federal Government Uses Finance as a Weapon
How does Washington control the states? It doesn’t need armies or court rulings—it controls them through money.
Medicaid reimbursements frozen: The Trump administration froze Medicaid reimbursements and food assistance programs forcing states to scramble for emergency funding.
Disaster relief withheld: Threatening to withhold wildfire relief from California unless it implemented voter ID laws
Federal grants tied to political conditions: Revoked grants to sanctuary cities using federal funds to force immigration policy changes.
Every economic decision a state makes is distorted by Washington’s financial influence. The Federal Reserve manipulates credit markets, ensuring that state economies are always dependent on federally regulated banks and capital flows.
When a state defies Washington, it does not face a legal argument—it faces an economic siege.
This is not a hypothetical scenario. The above examples show Washington’s willingness to withhold funds, sabotage credit, or impose other penalties any time a state tries to chart its own course.
II. The Bank of North Dakota : A Proven Model of State Financial Independence
For over a century, the Bank of North Dakota has been the backbone of North Dakota’s economic sovereignty.
1. Stability in Every Crisis
The BND has survived every financial crisis in modern American history without failing.
Great Depression (1930s): While banks collapsed across the country, BND remained solvent and supported farmers and small businesses when private banks abandoned them.
2008 Financial Crisis: North Dakota had zero bank failures while hundreds of private banks collapsed nationwide. BND continued lending and ensured that local banks had credit.
COVID-19 Recession: North Dakota achieved one of the highest per-capita distributions of emergency business loans in the country because BND swiftly partnered with community banks to deploy relief.
In every national crisis, North Dakota has had a state-owned financial shield that kept its economy running.
2. Public Banking Keeps Wealth in the State
Most states deposit their revenues into commercial banks, which then use those funds to make investments that prioritize corporate profits over local needs.
North Dakota does the opposite:
Every dollar of state revenue is deposited in the Bank of North Dakota.
Profits from state banking operations are reinvested into North Dakota’s economy.
State projects are funded without reliance on federal grants or Wall Street capital.
Over $1 billion in BND profits have been transferred directly to North Dakota’s general fund. That is money that would have otherwise gone to Wall Street shareholders.
III. How Public Banks Shield States from Federal Retaliation
1. Eliminating Reliance on Federal Grants
Instead of waiting for Washington to approve infrastructure projects, a public bank self-finances them. Instead of accepting federal conditions on education funding, a state can fund its own school system without compromise.
2. Ending Wall Street’s Influence Over State Finances
Every state that deposits its money in a federally regulated commercial bank is giving Washington leverage. A public bank ensures state revenues remain under state control.
3. Resisting Economic Blackmail
A state that controls its own bank, its own revenue streams, and its own financial networks cannot be threatened with federal funding cuts. It does not have to beg for aid, negotiate with out-of-state institutions, or accept economic coercion.
█ A Radical Federalist state that does not control its own banking system is not truly sovereign.
IV. Why Every State Must Establish a Public Bank Now
The Bank of North Dakota should not be an exception—it should be the rule.
Imagine if every state had a public bank.
California: Would not need to fight Washington for wildfire relief—it could fund its own disaster response.
Maine: Would not have to worry about federal education funding cuts—it could finance its own school system.
Texas, Louisiana, and Florida: Would not have to beg FEMA for hurricane aid—they could immediately rebuild.
Public banks are not a theoretical experiment. They are a proven model that every state can implement. The only question is which states will act before Washington escalates its economic warfare.
█ The time to establish public banks is now. A state that controls its own financial system is a state that cannot be conquered.
V. Next Steps: Enact The Blueprint for State Financial Sovereignty
States serious about breaking free from Washington’s control must immediately:
Pass legislation establishing a state public bank.
Require that all state funds be deposited in the public bank, not Wall Street institutions.
Develop loan programs for infrastructure, housing, and local business development.
Expand public banking partnerships with community banks to strengthen local economies.
Redirect federal tax obligations into state-controlled accounts to weaken Washington’s leverage.
This is not just a financial reform—it is a foundation for Radical Federalism itself.
█ Economic sovereignty is not theoretical. It is achievable. The states that build their financial independence now will determine the future of American governance, and state-established public banks are key.
excellent review and perspective. We should connect and work on this national movement together . If interested, contact me ; Walt@PublicBankingInstitute.org. I'm Chair.