Letter: A bill to protect financial choice for all North Dakotans
Jeff Olson, president and CEO of the Dakota Credit Union Association, urges the North Dakota Legislature to pass bills that would relax credit unions' Field of Membership statutes.
We like to say that North Dakota is open for business, and that’s mostly true, except for credit unions.
Today, North Dakota’s 18 state chartered credit unions operate under one of the strictest Field of Membership statutes in the nation, particularly in comparison to how federally chartered credit unions can operate. As written, only those residing within 75 miles of a credit union’s home office, or similar limited radius of a branch, can be a member of an “open charter” North Dakota state chartered credit union. Because we are primarily a rural state with great distances between our communities, many North Dakotans are being left behind or have limited options for financial services.
Why don’t North Dakota credit unions just convert to a federal charter then? That’s a fair question. However, this is about preserving local oversight and control. There are clear advantages to being a state chartered credit union; having the North Dakota Department of Financial Institutions as their primary regulator and guidance from the North Dakota State Credit Union Board are the obvious ones.
The governor appoints four members to the State Credit Union Board, which works in conjunction with the DFI to maintain public confidence in North Dakota state chartered credit unions by ensuring safety and soundness while complying with relevant rules and laws. The board has the power to adopt rules, and to make and enforce orders as are necessary to protect the public and the members of state-chartered credit unions. If North Dakota credit unions convert to a federal charter, the DFI’s credit union examination division and the State Credit Union Board, along with all local control, would go away.
As written, SB 2266 would give North Dakota credit unions similarity with federally chartered credit unions by allowing an individual to join a credit union if they work or attend school in the credit union’s community. Additionally, we are seeking to expand the radius to allow credit unions to serve more rural communities and banking deserts. To remain viable, stabilize their asset base, and diversify their loan portfolio, small credit unions need to be able to expand their FOM. Rural credit unions operating in dwindling population centers should be able to expand for safety and soundness.
North Dakota’s credit unions and our 213,000 members deserve an operating environment that is fair, modern, and one that helps our state-chartered credit unions keep pace with other financial services providers that are expanding into our marketplace.
Credit unions are not-for-profit financial cooperatives that are owned and controlled by their members. All credit union earnings stay here in the state, most of which are returned to the members in the form of lower fees and higher rates on savings. In fact, the Credit Union National Association estimates that North Dakota credit unions provided $22 million in direct financial benefits to the state’s credit union members during a 12-month period ending September 2022.
With just 10% of North Dakota’s market share, credits unions are not a threat to big banks or community banks. "Credit union" means a cooperative financial association organized for the purposes of encouraging thrift among its members, creating a source of credit at a fair and reasonable rate of interest, and providing an opportunity for its members to improve their economic and social condition. Our mission in supporting SB 2266 is to improve the financial well-being of our members and advance the local communities we serve. Let’s open our state for credit unions and protect financial choice for all North Dakotas.
Jeff Olson is president and CEO of the Dakota Credit Union Association.
This letter does not necessarily reflect the opinion of The Forum's editorial board nor Forum ownership.