Summary — HB 1507 (North Dakota)
AN ACT to create and enact a new chapter to Title 6 of the North Dakota Century Code relating to the establishment and organization of cooperative financial institutions; and to amend and reenact sections 6-01-02, 6-01-15, 6-01-17.1, 6-02-02, 6-02-03, 6-03-02, 6-03-11, 6-03-13.1, 6-03-34, 6-05-01, 6-06-35, 6-07.2-09, 6-07.2-19, and 6-08-08.1
Prepared for: General readers and policy stakeholders
Main purpose
HB 1507 establishes a statutory framework in North Dakota for “cooperative financial institutions” by creating a new chapter in Title 6 of the North Dakota Century Code and by amending multiple existing banking and financial statutes. The bill defines cooperative financial institutions, incorporates them into the statutory vocabulary for banking, and adjusts application, supervisory, governance, fee, liquidation, payment-of-claims, and sale rules to account for these entities.
Key provisions and changes
- Creates a new chapter in Title 6 dedicated to the establishment and organization of cooperative financial institutions (an institution without capital stock, organized under new statutory provisions and operated for mutual/non‑profit purposes).
- Amends definitions (6-01-02):
- Adds “cooperative financial institution” to the statutory definitions and includes such institutions within the definition of “bank” for purposes of Title 6.
- Clarifies or updates electronic record/signature, technology service provider, and capital tier definitions in line with existing federal references.
- Revises conflict-of-interest rule for department staff (6-01-15):
- Maintains general prohibition on officers/employees of the Department of Financial Institutions having an interest in regulated institutions, but explicitly exempts membership in a state-chartered cooperative financial institution (i.e., employees may be members).
- Adjusts application/fee provisions (6-01-17.1):
- Updates fees associated with applications presented to the state banking board, state credit union board, or commissioner (text shows existing fees such as $5,000 for a certificate to organize are retained/clarified).
- Makes cross‑cutting amendments across a number of chapters/sections (6-02-02; 6-02-03; 6-03-02; 6-03-11; 6-03-13.1; 6-03-34; 6-05-01; 6-06-35; 6-07.2-09; 6-07.2-19; 6-08-08.1) to address:
- application and organizational procedures,
- supervisory powers and examinations,
- payment of claims,
- procedures for liquidation and sale,
- and other operational and regulatory authorities affecting cooperative institutions.
- Text indicates consistency with federal supervisory regimes where applicable.
Who or what is affected
- Cooperative financial institutions (newly defined mutual / no-stock institutions) — will obtain an explicit state statutory chartering/organizational pathway.
- State Department of Financial Institutions, the Commissioner, state banking board and state credit union board — duties, application processes, fees, supervision and examination responsibilities updated to include cooperative institutions.
- Depositors/members and creditors — statutory treatment in claims, liquidation, and sale contexts will be clarified or changed.
- Department officers and employees — membership in state-chartered cooperative financial institutions is expressly allowed (conflict-of-interest carve‑out).
Procedural status & timeline
- Introduced in the Sixty‑ninth Legislative Assembly by Representative Vollmer.
- Document versions show First Engrossment and enrollment materials. (Bill materials filed with the Secretary of State; procedural steps recorded in legislative files.)
- The bill text as provided contains definitions and selected amended sections; the new chapter’s full substantive rules (e.g., organization, governance, capitalization, member rights) are referenced but not fully reproduced in the excerpt provided.
Practical implications / notes
- The bill creates a clear state-law pathway for mutual/cooperative banking-style entities, aligning statutory language (definitions, fees, supervisory authority) to include them alongside banks and credit unions.
- Allowing department staff to be members addresses a practical governance issue but retains the broader prohibition on financial interests.
- Complete operational impacts (e.g., capital requirements, consumer protections, insolvency procedures) depend on the content of the new chapter and the detailed amendments to the referenced sections; stakeholders should review the full enrolled text for the new chapter and all redlined amendments.
If you would like, I can:
- Produce a side‑by‑side listing of the specific statutory changes (stricken/added language) for the amended sections; or
- Extract and summarize the new chapter’s provisions if you provide the remainder of the bill text.
