Legislative Update with Jay Kruse

​North Dakota credit union bill – SB 2266 – was heard in House IBL Committee with multiple credit union advocates voicing their support in Bismarck. 

by Jay Kruse, Chief Advocacy Officer

After passing through the North Dakota Senate in early February, SB 2266, a bill to provide more financial choice for North Dakotas by updating the state’s code relating to credit union membership, was heard before the House Industry, Business and Labor (IBL) Committee yesterday, March 29.

The bill is very clear and concise; it would allow “open” state chartered credit unions to apply to expand their field of membership (FOM) radius from their main office locations out to 125 miles. They are currently restricted to 75 miles. It would also update the code to open up membership opportunities for not only those that live inside that radius, but also those that work or attend school inside the radius.

You can check out the full committee hearing here.  

If you ask me, using a radius to define a FOM is a pretty arcane way to determine who can and can’t be a member of a credit union, not to mention the improvements in safety and soundness using more modernized methods would provide. That is just how the statutes were written in North Dakota way back when, and I guess we have to live with that. But, that doesn’t mean modernizing these state FOM statutes wouldn’t greatly benefit all North Dakotans.

There is one aspect of our bill that for-profit bankers hate more than anything, and that is competition. Without competition, they are able to set the market on loan and deposit rates as well as the number and amount of fees that consumers pay. It’s not their fault, it’s what their business model incentivizes them to do. The goal of any business is to increase the wealth of its shareholders. For a bank, that means increasing the profits of a very select few individuals that have invested in the bank to become owners.

Credit unions share the same goal of increasing the wealth of their owners – except every single member that conducts their financial business with a credit union is an owner of that credit union. Credit unions are not-for-profit financial institutions that return ALL of their profits back to their membership in the form of lower loan rates and fees and higher dividends on your savings. Our not-for-profit tax status is directly tied to our structure, having nothing to do with FOM.  
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We would like to extend a huge “thank you” to Darla Schafer, Flasher Comm CU; Bob Herrington, North Star Community CU; and Tyler Neether, Town & Country CU; for standing up in support of North Dakota state chartered credit unions and testifying in support of SB 2266 yesterday!