North Dakota House Bill HB1507

North Dakota 2025-2026 Regular Session

• Introduced: 1/20/25
• Refer: 1/20/25
• Report Pass: 2/6/25
• Engrossed: 2/11/25
• Refer: 2/17/25
• Report Pass: 3/11/25
• Refer: 3/11/25
• Report Pass: 3/21/25
• Enrolled: 3/26/25
• Passed: 4/4/25

Caption

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 of the North Dakota Century Code, relating to the application, powers, payment of claims, liquidation, and sale of cooperative financial institutions.

Summary

HB 1507 creates a new chapter in North Dakota law for “cooperative financial institutions,” a new type of mutual, nonstock financial institution operated for the benefit of its members rather than for profit. The bill defines the new institution, sets out how it may be formed, what must be included in its organizing documents, how it is examined and approved by the state banking board and commissioner, and how it may convert to or from other financial institution types. It also establishes governance rules for member voting, annual meetings, board composition, bylaws, and the ability to convert to a federal savings association or state credit union. The bill also amends numerous existing banking, credit union, trust company, liquidation, and acquisition statutes to integrate cooperative financial institutions into the state’s financial regulatory framework. It exempts cooperative financial institutions from several stock-capital and corporate-governance provisions that apply to traditional banks, adjusts fee schedules for applications and conversions, and extends liquidation and claim-payment rules to cover cooperative financial institutions alongside credit unions. Related amendments also clarify that certain merger, facility, and control-acquisition provisions do not apply to cooperative financial institutions.

Impact

HB 1507 substantially revises Title 6 of the North Dakota Century Code by adding a new charter category and conforming existing banking and credit union statutes to that new structure. It affects the Department of Financial Institutions, the state banking board, the commissioner, and institutions seeking to organize, convert, merge, liquidate, or be acquired under state law. The bill also changes how member-owned institutions are governed, how examinations and application fees are handled, and how assets and liabilities transfer during conversions and liquidations.

Sentiment

The bill appears to have been broadly supported. It passed the House 87-3 and the Senate 44-0, indicating strong bipartisan approval and little visible opposition in the recorded votes. The absence of committee transcript material limits insight into detailed debate, but the vote totals suggest the concept of creating a cooperative financial institution charter was generally well received.

Contention

The main points of potential contention are structural and regulatory rather than partisan: whether North Dakota should create a new nonstock financial institution charter, how much discretion the banking commissioner and state banking board should have over formation and conversion, and whether the new entity should be exempt from rules that apply to banks and other financial institutions. The bill also raises governance questions about member voting, board independence, and conversion procedures, but the recorded votes suggest these issues did not produce significant floor opposition.