Senate committee advances bill to give Department of Financial Institutions continuing appropriations

The Senate Industry and Business Committee voted unanimously to recommend SB 2028 for passage after a hearing in which the Department of Financial Institutions and industry representatives urged the change as a way to speed IT upgrades and staffing decisions.

Commissioner Lisa Cruz, the Department of Financial Institutions, told the committee the agency is entirely special-funded — paid by bank, credit-union and nondepository assessments — and often cannot spend accumulated funds because its budget must be processed through the regular appropriation cycle. "We asked for seven more FTEs for this session; the governor's initial approval cut that to three," she said, and described a proposed budget in the neighborhood of $13,000,000. Cruz said continuing appropriations would allow the department to hire IT and cybersecurity staff and respond faster to bank failures and emerging risks.

Rick Kleberg, president and CEO of the North Dakota Bankers Association, told senators banks provide roughly 70% of the department's revenue and supported the bill to ensure examiners have the training and tools necessary to keep institutions safe and sound. John Alexander of the Dakota Credit Union Association offered similar support, saying the change would align the department’s funding structure more closely with federal regulators and permit the agency to carry funds forward for future needs.

Under the bill, the State Banking Board and the State Credit Union Board would conduct a joint meeting to determine the department's appropriation, and the commissioner would continue to report to the legislature. Cruz said the bill includes reporting requirements designed to preserve legislative oversight and guardrails against excessive spending.

Supporters argued continuing appropriations would reduce the risk that federal regulators would need to step in if the state cannot meet exam mandates, noting North Dakota’s reliance on local expertise for oversight of agricultural and community banks. Cruz and legislators also emphasized cybersecurity and technology gaps: multiple small licensing boards still run on spreadsheets, and nonbank fintech firms and money transmitters are placing new demands on exam staff.

The committee had no recorded in-room opposition and closed the hearing after questions and clarifications about board composition and fund flow. Senator Klein moved a due-pass recommendation, Senator Kessel seconded, and the chair reported a unanimous do-pass. Senator Klein volunteered to carry the bill to the floor.

What happens next: SB 2028 advances from committee and, if scheduled by leadership, will proceed to further floor consideration. The committee recorded the hearing record and asked staff to follow up on a contact to provide additional fiscal detail.