Bismarck, North Dakota — In 1918, a progressive agrarian labor movement faction known as the "Nonpartisan Alliance" ( Nonpartisan League ) came to power in North Dakota. The organization rapidly rose to prominence by riding on the wave of populist anger directed at the large banks and industrial giants in Minneapolis and Chicago.

The organization was founded by Arthur C. Townley ( Arthur C . Townley ), a former member of the Socialist Party. He was once a failed flax farmer who traveled across the state in a borrowed Ford Model T, advocating for the nationalization of key industries such as banks, mills, and factories. By 1919, the state legislature authorized the establishment of a bank that was owned and operated by the state government.

More than a century later, the North Dakota Bank ( Bank of North Dakota ) still exists, and the state is reaping the benefits it brings.

The Bank of North Dakota is the only state-owned bank that is still in operation in the United States. As the politics of the Great Plains shifted from grassland progressivism to deep red conservatism, it has continued to exist to this day. It currently manages assets worth about $11 billion and enjoys broad support from the state's current political leaders.

"I find that quite strange, don't you? We are one of the most conservative states in the union, yet we have such a state-owned bank that was initially founded by the first generation of Norwegian immigrants," North Dakota Governor and Republican Kelly Armstrong ( Kelly Armstrong ) told CNBC. "I don't think we could establish another one now, but I'm very grateful that we already have it."

In addition to Armstrong, the bank's current supporters also include two U.S. senators from the state, Kevin Kramer ( Kevin Cramer ) and John Hoeven ( John Hoeven ), the latter of whom once served as the bank's president, as well as former North Dakota Governor and current Secretary of the Interior Doug Burgum ( Doug Burgum ). During the 2026 election season, "socialism" remains a derogatory term within the Republican Party, yet all of them are Republicans.

Essentially, the Bank of North Dakota is just a bank. It has a governance structure, holds deposits from the state government, and issues loans. However, it is also a unique institution that combines political and financial aspects to advance the state's industrial and economic goals. These actions can range from saving a coal power plant on the brink of closure to lowering interest rates for loans in agriculture, energy, or housing.

“I’ve always said that this concept is very interesting; obviously, it’s successful here,” Don Morgan ( Don Morgan ), the president and CEO of the North Dakota Bank, told CNBC. “If used incorrectly, it can be a bit dangerous. But if used correctly, it can become a very powerful financial tool.”

This bank also represents the remnants of the last wave of populistic socialism in the United States, and now, on the eve of the mid-term elections in 2026, the country is experiencing another similar wave. North Dakota was won by Trump in 2024 by a margin of over 36 percentage points, and this bank is now being used as an example by Democratic, progressive, and democratic socialist candidates and legislators from all over the country to expand the public banking system.

CNBC traveled to North Dakota to speak with the leadership of a bank that rarely opens up to national media, state political officials, and business people. The aim was to understand how the only state-owned bank in the United States operates, how it interacts with the state it serves, and whether the concept established a hundred years ago can support the rise of a new wave of state-owned banks.

“For a long time, people laughed at it – ‘Oh, that’s their socialist experiment over there’ – but I think what’s important is that we are living in an era of populism,” said Kramer. “In the past, others were somewhat skeptical about it, but recently, after seeing it, they say, ‘You know, maybe we could use such a tool.’”

The Foundations of Populism

In the past, there were about a dozen states that established state-owned banks, but today only the bank in North Dakota is still in operation. Most of these banks failed around the year 1900, either due to laws that allowed private banks to issue notes backed by government bonds or because of the impacts during periods of economic turmoil.

Nevertheless, some political figures still hope to use the North Dakota Bank as a model to bring public banks back into national discussion. With the rise of progressive populism, policymakers may once again consider public banks as a solution to a range of economic issues.

Most supporters of the public bank are Democrats, including the progressive democratic socialists who became popular rapidly after Zohran Mamdani ( Zohran Mamdani ), the mayor of New York, was elected in 2025.

Mamdani served as a member of the New York State Assembly from 2021 to 2025, during which time he co-sponsored a bill that would have allowed municipal and local governments to establish public banks. Francesca Hong ( Francesca Hong ), the candidate for governor of Wisconsin, lost to Democratic nominee David Crowley ( David Crowley ) by a narrow margin in August; she also called for the establishment of a state bank modeled after one in North Dakota in her official campaign platform. Alexandria Ocasio-Cortez ( Alexandria Ocasio - Cortez ), a U.S. Representative from New York and a Democrat, is considered a potential presidential candidate for 2028. Together with Rashida Tlaib ( Rashida Tlaib ), a Democratic representative from Michigan, she is pushing a bill in Congress aimed at making it easier for states to create public banks.

"We are populists, while in other parts of the United States, Republicans do not have such a populist hue as we do; they tend to be more conservative," Kramer said when discussing why one of the most conservative states in the country is being emulated by democratic socialists. "To some extent, a more liberal political inclination is naturally attracted to this experiment that has lasted for 108 years in North Dakota, because on the surface, it seems more appealing to the left than to the right."

Meanwhile, several states led by Democrats have begun to experiment with public banks. One of them is Washington state, where a working group composed of officials is expected to submit an implementation plan to the state legislature by mid-2027.

“I believe that people should have control over the taxes they pay,” said Bob Hatchett ( Bob Hasegawa ), a senator from Washington state who participates in this working group and has been advocating for the establishment of a state bank for many years. Hatchett stated that he began to promote this idea after the financial crisis in 2008.

“We let large Wall Street banks use our taxes to leverage them, and then they earn huge profits for their shareholders and themselves,” he said. “At the same time, if we want to do anything, like build bridges or repair water systems, we have to issue bonds again. So in effect, we are borrowing back money that should belong to us in the first place, just to finance infrastructure or other projects.”

Massachusetts, New Mexico, and California are also advancing proposals to establish their own public banks.

A monetarist expert stated that from the perspective of monetary system design, public banks are reasonable.

"For me, this comes from a design perspective. Why don’t we do something that is so obvious? Why can’t the public use the same banking powers that private institutions have?” said Christine Desan, Christine Desan, a professor of law at Harvard University who teaches courses on capitalist political economy and monetary systems.

"The reason why banks are such good lenders is that they operate within a network," said Desan. "In fact, that's how public banks function: we need to join this network; the public, the state of Massachusetts, will join this network, and then we will have the same advantages when it comes to lending."

Doubts from Commercial Banks

The main participants in the banking industry do not agree with the concept of public banks.

The Bankers Association of America opposes the final passage of relevant laws in California, which allow municipal authorities to establish public banks and open state-level checking accounts for individual citizens. The association also opposes a ballot initiative in Los Angeles that would have allowed the establishment of public banks.

"History has shown that public banks are looking for solutions to problems, and they pose significant risks to taxpayers," Josh Britton ( Josh Britton ), a spokesperson for the Bankers Association of America, told CNBC. "Banks in the United States are already highly regulated, well-capitalized, and reliably serve communities, businesses, as well as state and local governments across the country. Misleading political intervention will only harm consumers and the economy."

The intervention of state governments in bank decision-making is also one of the greatest political risks faced by public banks. In theory, public banks may decide who to support and who to suppress based on the political inclinations of elected officials, thereby harming certain industries while benefiting others.

Morgan stated that as long as there is a strict ban on competing with local financial institutions and a sound governance structure is established, other states can minimize the pitfalls associated with setting up public banks.

"Our founding documents clearly state that we must not compete with [financial institutions in North Dakota], and that is a very strong statement. Because I have always said that once we start competing with them, our model will collapse," he said. "I believe any state can do it. But how it is established in the beginning is crucial. The initial governance framework is essential."

Morgan pointed out that the bank is “under the command of” the North Dakota Industrial Commission and the state legislature, and it will implement the decisions of these agencies as long as they “do not harm or violate our founding documents, nor endanger the safety and stability of the bank.”

Morgan said that operating this bank more as a financial institution rather than a government agency serves as a kind of “safety valve,” allowing the bank to return to this principle when necessary, because after all, the bank must operate well and protect itself, as it is responsible for safeguarding the deposits of state governments.

Morgan often gives speeches to advocates of public banks across the country. He states that as long as a public bank is first and foremost a bank, it can serve its state in any way that the state government desires. Other uses proposed by other states include financing new housing, financing infrastructure, and reducing inequality.

“Your bank can do anything that the state government hopes it will do, as long as that does not prevent it from becoming a healthy bank,” he said. “Then, when you are ready, you can focus on doing things that are in line with the strategic direction of your state, which varies from state to state in the United States.”

The bank of banks

Today, the Bank of North Dakota plays the role of a "bank of banks," providing support to small community banks to help them fund projects that they may not be able to finance on their own.

This bank is led by the Industrial Commission, which is a government agency established under the bank's founding legislation. The governor, the attorney general, and the commissioner of agriculture comprise this committee, which also serves as the bank's board of directors. The bank also has an advisory committee and an executive committee, the latter being responsible for the day-to-day operations.

“I truly attribute this governance framework to our 107 years of history, and to the reason why we are still around today, while many other public banks have failed by now,” Morgan told CNBC at the bank’s headquarters in Bismarck.

Morgan said that the bank's core businesses include participating in loans, commercial real estate loans, and agricultural loans. The bank also operates in other areas where private banks within the state have not yet competed, including providing low-interest direct student loans to North Dakota residents who wish to attend college.

It also quickly establishes disaster relief programs. In 2026, amidst the challenges posed by Trump's tariffs, low commodity prices, and high input costs, the bank provided $500 million in loan support to farmers. Over the past few decades, it has gone even further: it sold seized farmland back to families at prices below asking price after dust storms, and ensured that teachers received their full salaries during the Great Depression.

This bank does not have a deposit base consisting of cash held by individual customers in the traditional sense. In fact, in order to avoid competing with community banks within the state, it also discourages individual deposits.

On the contrary, it is the main custodian of state government funds. Morgan stated that its core deposit base comes from the state general fund, which is a mixture of state tax and fee revenues. The state legislature can then reinvest the bank's profits back into the general fund for use in the state budget; or they can use the profits to support bank investments, thereby benefiting industries within the state.

"The average balance we hold is approximately $6.6 billion — that is our deposit base, our core deposit base," Morgan said. "We use these deposits to conduct banking operations through 91 financial institutions within the state, engaging in loans, disaster loans, student loans, and then we generate a decent, healthy profit for the general fund."

According to Rick Kleiberger ( Rick Clayburgh ), president and CEO of the Bankers Association of North Dakota, other banks in the state do not regard North Dakota Bank as a competitor. On the contrary, they see it as a tool to help community banks achieve more with less.

“I think that if we wanted to establish a state bank in North Dakota today, our association would probably oppose it,” Kleiber said. “But now that we know what it is, and considering it has been around for 107 years, it is a great tool for various types of institutions.”

Coal and Data Center Financing

An example of this bank's investment activities – and also an example where progressives might adopt a different approach – can be found in McLean County.

In the central plains that undulate between Andwood and Washburn, Coal Creek Station under the umbrella of Rainbow Energy Center burns lignite, supplying electricity to approximately 1.7 million customers in Minnesota through a massive power transmission line, with an installed capacity of 1151 megawatts. The power plant directly employs about 200 people, and the nearby coal mine employs several hundred more.

However, in 2020, the fate of this power plant was quite different. The owner at that time, Great River Energy, stated that the plant had been incurring losses and planned to retire it by the end of 2022, replacing its production capacity with wind farms and natural gas power generation.

At that time, Governor Bergum was a firm supporter of coal. He, along with Kramer and Howen, immediately requested that Great River find buyers for this power plant and its accompanying transmission lines. Considering that the United States was shifting towards renewable energy sources and the economic advantages of coal were declining, this was a daunting task.

"This will cause tremendous damage to the region," said Ethan Wagen, the director of the power plant ( Ethan Vaagene ). "That's probably the worst feeling I've ever had in my life... I still remember the day when the previous owners announced to all the employees that they would close down the factory. It was a complete shock for all of us."

Bergum led a government-wide effort to find a buyer. Although a buyer was eventually found, the complex sale financing arrangements would have been difficult to execute without the help of the North Dakota Bank.

Morgan said that the banks in North Dakota were able to 'co-ordinate' the complex transaction of Great River selling the power plant and transmission lines to the final buyer Rainbow Energy. Rainbow Energy Center purchased the coal-fired power plant, while the transmission lines responsible for delivering electricity to Minnesota were bought by Nexus Line. Both companies are affiliated with Rainbow Energy Marketing Corporation.

This transaction includes a package of financing solutions: The North Dakota Transmission Authority ( NDTA ) issued bonds for the first time, raising $150 million to provide loans to Nexus Line for the purchase of transmission lines. In turn, the North Dakota Bank purchased NDTA bonds through a $150 million "matching program" loan, which is used to support large-scale economic diversification projects.

The CEO of the company that acquired this power plant stated that without the Bank of North Dakota, this transaction would not have taken place.

“Every time I meet with the Bank of North Dakota, I always start by saying: If it weren’t for you, we wouldn’t be sitting here today,” said Staci Teshide, CEO of Rainbow, standing on the roof of a coal power plant and addressing CNBC. “If I were to seek financing outside the state, it would be even more difficult to explain the situation to other banks, because… during previous administrations, coal has always been in a state of being suppressed.”

After making investments in the bank, Rainbow began to expand the uses of this power plant.

CNBC visited this power plant along with Teshid and Wagen. Teshid expressed his vision of transforming this place into a futuristic "energy park."

An example of the evolution of power plants has already emerged. Beneath the towering towers that emit steam during power generation, mining computers are humming away. Coal Creek Now, when demand for electricity in the grid is low, the electricity produced on-site is diverted to mining Bitcoin in order to compensate for profit losses.

Teshid said that the power plant is in talks with a large-scale artificial intelligence cloud service provider, planning to build a data center directly next to the power plant in order to generate more revenue. There are scattered signs on the roads near Coal Creek opposing the construction of data centers, which reflects the local opposition to such facilities, and this is also a common resistance faced by the nationwide AI construction boom.

"We are currently collaborating with several large-scale cloud service providers," Teshid said, adding that he expects to begin construction within the next six months.

Stablecoin designed for the original populists

The Theodore Roosevelt Library, located in the Badlands Canyon of Medora, North Dakota, is built in accordance with the terrain, rising out of the land. In his youth, Roosevelt came here to seek comfort after his wife and mother passed away on the same day.

On the day of visiting the library, CNBC, the Bank of North Dakota – which had previously provided a credit line of $70 million to the library to enable construction while waiting for private financing and to open before the 250th anniversary of the founding of the United States – was celebrating the launch of its first stablecoin. This stablecoin, named Roughrider Coin, will allow the community bank network in North Dakota to conduct near-real-time interbank transfers.

Roosevelt holds an important place in the spirit of North Dakota, and this library also has grand ambitions: it hopes to host a presidential debate and become a national-level center for conservation work in the United States. Roosevelt also has a unique identity: among modern American political figures from both parties, he is one of the most popular presidents due to his populist appeal, progressive stance, anti-monopoly record, and strong nationalist tendencies.

In many respects, this bank is a product of the movement promoted by Roosevelt in American politics.

"Bank of North Dakota has a very deep roots in this state; it is closely connected to the populist movements of the prairies," said Robbie Love ( Robbie Lauf ), the interim CEO of the library. "That happened after the Progressive Era, and Theodore Roosevelt was one of the most important figures during this critical period in American history."

Lauff has previously worked in the office of Berman as well as in the office of former Federal Reserve Chairman Jerome Powell. He rejected the claim that this bank, having originated from grass-roots populism and progressive movements, is in conflict with the principles of a free market.

"Whether agriculture or rural communities form in one place or another, there is always a deep populist tradition there, and at the same time, people often misunderstand the meaning of 'populism,'" said Rauf. "What it really aims to do is to help us achieve self-determination as a region."

"This is by no means an embrace of any form of state ownership; it is a collaboration with private enterprises," he said. "Without private enterprises and private banks, this institution would not be able to function... To me, this is very much a free market approach."

When asked about the socialist roots of this bank, Morgan stated that regardless of its roots, the bank itself is a good idea.

"There are good ideas across the entire political spectrum," he said. "We tend to get caught up in arguments too easily, or we care too much about the letters that follow your name, the titles you're given. Good ideas do exist."