By Jared Gardner, Co-Chair of Oregonians for a State Bank

In the wake of the Wall Street melt down, it may come as a surprise to the average Oregonian that our State still does the vast majority of its banking with the so-called “Too Big To Fail” banks on Wall Street.  Given the scale of the State’s banking needs, there has been little other choice.

Recently, however, there has been a lot of talk about creating an Oregon State Bank – modeled after the successful Bank of North Dakota – as a way of bringing some of that money home again. In fact, this year the legislature will consider a proposal put forward by Oregonians for a State Bank—a coalition of rural agricultural groups, small business advocates, community bankers, and community organizations—to do just that.

We believe that the Oregon State Bank can play a large role in creating a more resilient local economy and getting credit flowing to small business and farmers. As the legislature prepares to take up this bill I’d like to explain what this proposal would do, and what it would not do.

The State Bank will not be a retail bank, and it will not compete with community banks.  It will be a “bankers bank” designed to partner with community banks to help them grow with their customers and communities.  Right now the playing field is tilted dangerously in favor of even greater bank consolidation. However, by supporting lending activities initiated by Oregon’s community banks, the State Bank will cultivate a more robust local banking infrastructure.

The Oregon State Bank will help streamline, improve and ultimately expand our state’s economic development tools. This means that small family farmers will have additional financing options, and small businesses will be able to weather economic storms and expand their businesses. Because it will be a bank, run on banking principles, the State Bank will be tasked with making a profit on the state’s money, thus developing over time a revenue stream that can fund more economic development work and, eventually, provide significant returns to the State.

Our proposal to create the State Bank is closely modeled after the Bank of North Dakota (BND). BND was founded in 1919 by the Non Partisan League when North Dakotan farmers were losing their properties to out of state banks in an economic environment not unlike that of today.

The BND has a multitude of programs designed specifically for supporting their state’s agricultural sector.  As the effort to create the Oregon State Bank move forward, it is going to be absolutely critical that the voices of rural Oregon are heard, and the needs of the state’s agricultural sector are addressed.  For more info on the Bank of North Dakota’s agricultural programs go

The Oregon State Bank serves Oregonians, not distant stockholders. The Governing Board is composed of three statewide elected officials, the Governor, Treasurer and The Commissioner of Labor and Industry . These elected leaders will appoint an advisory board composed of Oregon community bankers, and advocates representing small business, agriculture, and labor. The day to day activities will be performed by professionals with extensive lending and financial background.

This year lawmakers will have the opportunity to take a comprehensive approach to addressing our state’s economic needs, rather than the piecemeal approaches we have taken in the past. And we’re making progress. Treasurer Wheeler’s recent endorsement of the state bank concept (The Oregonian, Feb. 9, 2011) underscores the non-retail functions of the bankers bank or “virtual bank.” We believe we are on the same page as the Treasurer, but we will remain vigilant through the legislative process to ensure the essence will remain: to build the capacity in Oregon to support Oregon businesses, farms and a healthy community lending sector.

Over time, having a State Bank will ensure we have the economic engine in place to meet the diverse and evolving needs of Oregon’s communities. We believe this proposal can create a stronger local financial sector and in turn stimulate job growth in a way that supports our local economy and which provides our state some insulation from vagaries of Wall Street.

For more information on an Oregon State Bank and how you and the other members of Oregon Rural Action can get involved, take a look at the page for “Creating an Oregon State Bank” and visit

More information:

Read FAQs on the State Bank Proposal