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Committee backs bill to restore state cooperative/mutual bank charter option
Summary
The Appropriations Government Operations Division voted to advance House Bill 1507 to reestablish a state cooperative (mutual) bank charter, restoring an option repealed in 2007 and giving a member‑owned financial institution a state‑charter pathway.
The Appropriations Government Operations Division voted to advance House Bill 1507, which would reestablish a state cooperative (mutual) bank charter. Supporters said the statute restores a charter option that existed prior to a 2007 repeal and would give a member‑owned institution a state‑charter alternative.
Rick Kleiberg of the North Dakota Bankers Association told the committee the bill reintroduces a cooperative/mutual charter so a member‑owned financial institution that currently can only take a federal charter would have the option to convert to a state charter. Kleiberg said the change is intended to provide parity and a local chartering option; he described the proposed charter as modeled on Massachusetts law and said the department and association do not expect significant fiscal impact.
Sandy (Secretary of State deputy) testified the office can implement the charter with a modest system update and suggested the fiscal note could be as low as about $6,000 if the new filing can wait for the agency's planned system upgrade (the larger quoted fiscal scenario assumed an immediate build). Kleiberg and the secretary of state's deputy both described the process as administrative and not an immediate operational shift for institutions.
Questions from senators focused on differences between credit unions and a cooperative bank charter. Witnesses explained the cooperative bank would be a bank (FDIC‑insured and taxed) that is member owned, whereas credit unions are organized on a different not‑for‑profit structure and follow different investment and governance rules.
Senator Dwyer moved a due‑pass recommendation and Senator Burkhart seconded. The committee recorded ayes and the motion passed. The bill now proceeds to the next committee or floor steps with a sponsor to carry it forward.
Ending: Committee members said the bill is largely technical and restores a prior statutory option; the Secretary of State indicated implementation can be handled with routine system work and could be delayed until the next system upgrade to minimize immediate cost.
