North Dakota Bankers
Extraordinary Leadership for North Dakota Banks

April 3, 2023 - Update

April 3, 2023 - Update

Posted: Apr 03 2023

This Week at the Legislature

This past Tuesday marked the deadline for rereferrals of bills in the second chamber to the Appropriations Committees. Appropriators will be looking to make cuts on these bills and others as the legislature has overspent expected revenues by $931M as of March 28. Major spending proposals, which must be reconciled to balance the budget, include income and property tax relief, pension solvency, and higher education capital projects. 
Governor Burgum dusted off his veto pen for a couple of high-profile bills this week. The governor rejected SB 2231, the “pronoun bill,” prohibiting schools from referring to students by any pronouns that do not reflect the sex assigned to them at birth. Hours later, the Senate voted to override the veto. To become law, the bill now needs at least a two-thirds majority vote in the House. Burgum also rejected HB 1475, raising the interstate speed limit to 80 mph. The legislature has not yet voted on the veto override. 
Next week, we expect to see lots of appropriations work and the appointment of the first conference committees to begin working out differences on bills passed in one chamber and amended in the other. 

Hearings and Other Action Last Week

SB 2206 – Insurance Cash Value Exemption  
The House Industry, Business and Labor Committee heard SB 2206 Tuesday morning. Introduced by Senator Merrill Piepkorn, SB 2206 eliminates the $8,000 limit in any accrued dividend or interest under, or loan value of, any unmatured life insurance contract by creating an unlimited exemption for any benefits including cash value and proceeds of an insurance policy or annuity contract. An insurance agent from Fargo asked Senator Piepkorn to introduce the bill. He felt the $8,000 limitation was too low and 33 states now provide unlimited bankruptcy protection of insurance cash value. NDBA’s Rick Clayburgh, ICBND’s Barry Haugen and BND’s Kirby Evanger spoke in opposition, noting an unlimited exemption differed from the treatment of other assets in the statute, such as a 401k retirement plan.  There was no other testimony and the hearing was closed. The Chairman is appointing a subcommittee to work on amending the bill with some type of reasonable adjustment. The Committee could be acting on the bill as early as Tuesday morning. 
HB 1487 – Relating to Financial Institutions use of Merchant Codes to Track Firearm Purchases 
The Senate Appropriations - Government Operations Division heard HB 1487 Tuesday morning. The bill was referred to the Appropriations Committee because of a fiscal note involving the Attorney General’s oversight. Rep. Ben Koppelman introduced amendments to the bill that changed the Attorney Generals involvement. The changes removed the fiscal impact and the Attorney General changed to a neutral position on the bill. On Thursday morning during Committee action on the bill, Sen. Vedaa introduced a study amendment to the bill regarding interchange fees associated with the collection of state taxes.  His amendment is similar to the study provisions from SB 2217, which had been defeated in the House the week before. An effort will be made to overturn the amendment when the full appropriations Committee meets this week to review the sub-Committee’s actions. 
SB 2266 – Credit Union Field of Membership 
The House Industry, Business and Labor heard SB 2266 Wednesday morning. Senator Robert Erbele introduced the bill. He explained the purpose of the bill is to expand the field of membership of state-chartered credit unions from 75 miles to 125 miles. North Dakota Credit Union League president Jeff Olson and three credit union managers from around North Dakota testified in support. Jordan Nelson (Peoples State Bank of Velva) Sarah Getzlaff (Security First Bank of ND), Tim Karsky, (Choice Bank), ICBND’s Barry Haugen and NDBA Rick Clayburgh testified in opposition to the bill. In addition to his opposition testimony, Clayburgh also spoke against an amendment offered by the Credit Unions to further water down the FOM when credit unions with different memberships merged. The bankers’ message to the Committee is not to amend the bill and give it a do-no-pass recommendation. The hearing was closed without committee action. The Committee will be acting on the bill this Tuesday morning, April 4. 

Member Alert – Contact Your House Member

We need your help! 
SB 2266, credit union field of membership expansion, will be acted on by the House Industry Business and Labor Committee on Tuesday morning, April 4.  Legislators need to hear from bankers regarding our opposition to SB 2266. 
Please contact your House Member and ask them to vote “NO” on SB 2266 
Here is a link to the Representative contact information:  Also, attached is House Member contact spreadsheet.  
Talking Points Regarding SB 2266: 
North Dakota’s current credit union field of membership law was enacted in 2005 and codified the 75-mile radius that had been adopted by the State Credit Union Board to remove ambiguity and provide clarity. The 2005 legislation established that a credit union could branch only within their field of membership. This provision was enacted to prohibit credit unions from using branching to leapfrog across the state to the detriment of smaller credit unions. 
Credit Unions Have Been Growing 
According to the state department of financial institutions, state credit union assets, loan activity and numbers of physical locations in North Dakota have grown somewhat more than those of state-chartered banks in recent years. 
Current Field of Membership is Clear and Fair  
The credit union lobby is arguing that North Dakota’s field of membership is the most restrictive in the country. However, during the committee hearing, the department of financial institutions confirmed current North Dakota law is clear and is not the most restrictive state law. 
ND Citizens Already Have Access to Credit Unions 
The credit union lobby believes they need expanded membership to ensure citizens’ financial needs are covered. The facts show North Dakota citizens, border to border, have complete access to have their financial needs served. In every corner of the state, individual citizens have multiple choices to join a credit union. Across North Dakota, there are 19 State Chartered Credit Unions with 111 branches and there are 77 State and National Banks in ND with 392 branches in 175 communities. 
Un-Level Playing Field 
The credit unions have testified they support SB 2266 because it will allow them grow even bigger and compete better with banks. Credit unions acknowledge their income tax-free status and exclusion from bank regulations are an advantage they want to keep and expand without any leveling of the legal or regulatory playing field. 
Bottom Line 
  1. Banks are not afraid of competition – they want fair competition. 
  2. CRA is one example of a federal law that applies to banks but not credit unions. Since banks must comply with costly regulations like CRA, maybe it is time to have credit unions comply with the same regulations to make sure they are serving their communities.  
  3. Credit union income is not subject to either state or federal income taxes. All North Dakota bank income is fully subject to federal and state income taxation. 
  4. Credit Unions: once a member, always a member! If a member of a credit union moves out of their credit union’s field of membership, they can still be a member and conduct business with that credit union.   
Please reach out to your House member and ask them to vote NO on SB 2266.  Here is a link to the Representative contact information: 

Hearings This Week (4.3.23 - 4.7.23)

04/03/2023 08:00 AM    
HB 1014 

A BILL for an Act to provide an appropriation for defraying the expenses of the industrial commission and the agencies under its control (BND & Housing Finance); to provide for a transfer; and to provide an exemption.  
Senate Appropriations - Government Operations Division  
NDBA Priority  

04/03/2023 09:00 AM    
SB 2140 

Relating to public employee insulin drug and supplies benefits; to amend and reenact subsection 2 of section 26.1-36.6-03 of the North Dakota Century Code, relating to self-insurance health plans; to provide for a report; to provide for application; to provide an expiration date; and to declare an emergency.  
House Appropriations  

04/03/2023 09:00 AM    
SB 2392 

Relating to the definition of deposit account.  
Senate Industry and Business  
NDBA Priority  

04/04/2023 10:00 AM    
SB 2206 

Relating to insurance cash value exemptions.  
House Industry, Business and Labor  

04/04/2023 10:00 AM    
HCR 3036 

Relating to the adoption of a Central Bank Digital Currency in the United States.  
House Industry, Business and Labor  
NDBA Priority  

04/04/2023 10:00 AM    
SB 2266 

Relating to credit union membership.  
House Industry, Business and Labor  
NDBA Priority  

04/04/2023 10:30 AM    
HB 1487 

Relating to financial entities use of merchant codes to track firearm and ammunition-related purchases; to provide a penalty; and to provide a continuing appropriation.  
Senate Appropriations  
NDBA Priority  

04/04/2023 03:00 PM    
HB 1379
Relating to an economic diversification research fund, a workforce development and enrichment fund, a legacy projects fund, a legacy projects advisory board, and a county and township bridge fund; to amend and reenact sections 6-09.4-10.1 and 21-10-13 of the North Dakota Century Code, relating to the legacy sinking and interest fund and the legacy earnings fund; to provide a report; to provide an appropriation; to provide a contingent appropriation; and to provide an effective date.  
Senate Appropriations  

How to Contact Your Legislators

During a legislative session, a legislator can be reached at the State Capitol through: Otherwise, a legislator can be reached by mail, telephone or email at the address listed in the legislator’s biography, or one of the lists provided below. Individual legislator contact information is listed here:

Over the course of the session, NDBA may ask you to call your Senator or Representative to talk to them about a particular bill or to ask them to support or oppose a particular bill.

Legislator contacts from local bankers are extremely important, so, please, if we ask, contact your legislators!

Also, local legislative forums are great to attend because they inform you about issues beyond banking and let you get to know your legislators at home where they are most responsive to your interests and concerns.

Don’t be a stranger; get to know your representatives in Bismarck!

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