Senate committee endorses continuing-appropriation bill for Department of Financial Institutions

The Senate Industry and Business Committee gave a unanimous due-pass recommendation to Senate Bill 2028, a bill that would place the North Dakota Department of Financial Institutions’ operating budget under continuing appropriations and have the state banking and credit union boards approve the department’s appropriation in joint session.

Senator Jeff Barta, who introduced the bill for the committee, said the measure resulted from an interim committee and surrounding work on House Appropriations language requiring a study of the department’s budget and approval process. He said the change is intended to help the Department of Financial Institutions react more quickly to industry and technological changes without returning to the biennial appropriations process for routine adjustments.

Lisa Cruz, commissioner of the North Dakota Department of Financial Institutions, testified in support and described the department as fully industry-funded. "I believe it would be helpful for North Dakota, allowing our department to be more responsive in executing our legislative mandates and meeting our industry's needs," she told the committee. Cruz said the agency operates three cost centers (banks and trust companies; credit unions; and nondepositories) and that banks provide the largest share of assessments.

Cruz said the agency had sought seven additional full-time employees (FTEs) for the session but the governor’s recommended budget reduced that request to three. She told the committee the department currently holds cash from assessments that it cannot spend under the normal appropriation cycle and that continuing appropriations would allow the department to use those funds for staffing, IT and cybersecurity work the agency said it needs.

Industry groups testified in favor. Rick Kleberg, president and CEO of the North Dakota Bankers Association, said the bankers’ group unanimously endorsed SB 2028 and argued the change would let regulators retain local oversight and respond to crises. John Alexander, director of legislative affairs for the Dakota Credit Union Association, said the bill would create parity with the federal credit-union regulator’s budget structure and allow the state agency to carry funds forward for future needs.

Committee members pressed on oversight and composition of the state banking and credit union boards; witnesses said board members are gubernatorial appointees and typically include industry professionals as well as at least one public member. Senators discussed the dual-banking system and the difference between state and federal charters.

After questions, the committee moved the bill to a due-pass recommendation. The committee chair moved for a due pass and Senator Kessel seconded; the committee clerk recorded a unanimous vote in favor. The chair accepted responsibility to carry the bill to the floor.