14:49
This is Coal Creek Station, a massive coal fired power station in North Dakota just five years ago, this operation was set to close. You can really see how that coal gets spread in there. There's the right temperature. We're trying to get consistently throughout the boiler. Over 600 jobs are on the line, including Ethan Vaagene's. It was the worst, actually, probably the worst feeling I've had in my life. I still remember this day when the prior owner announced to all the all the employees that they were going to be
closing the facility. But the state government bailed them out with a powerful tool: its own bank. If there's a need the state has, we'll identify that need. We'll pull all the parties together and ideate it, and then we can initiate the entire strength of the state and break through the silos in order to get something done, if the state really needs it. For a long time, people have scoffed at it. Oh, that's their experiment with socialism over there. We're trying to emulate the Bank of North Dakota. Actually, the big difference between public banks and commercial banks is not to maximize profit, but is to instead maximize the benefit of our tax dollars for the people.
CNBC traveled here to North Dakota to find out why this socialist bank is thriving deep in Trump Country. So we're here at Coal Creek Station, an energy producing plant in North Dakota. And we're about to go take a look at some of their new investments. Coal Creek is one of North Dakota's largest power plants. It generates electricity for about 1.7 million people in Minnesota. Locals in North Dakota told us the power station is a pillar of the local economy, and its closure would have disrupted life in the community.
People come here and work here and they stay here, and this is the only job they have, a lot of times, for their whole career. A lot of people probably would have had to make some hard life decisions, and potentially a lot of them had to move away. In 2022, Rainbow Energy Center came in and bought the plant with assistance from the Bank of North Dakota. The Bank of North Dakota, they understood the existing asset and the value that it had. We have decades of coal reserves surrounding Coal Creek Station. Coal Creek and much of western North Dakota sits atop a major deposit of lignite, a soft form of coal. That energy provides an opportunity to make money with emerging technologies, including cryptocurrency and AI.
It's been a really tremendous success. While we were there, we got a tour from Rainbow Energy Center CEO Stacey Snider. We own approximately 45,000 to 50,000 acres. The 430MW worth of data centers is going to be in this location right here. So this will be data centers in the future, basically for AI, for super intelligence, using the power from Coal Creek Station to energize those facilities. The Bank of North Dakota purchased $150 million in bonds from a state infrastructure authority to assist in the deal. It was a mixed bag of capital stack, traditional lending, interest rate buy downs, some grants for that deal to work.
Now, this was a loan that a lot of other banks might have not wanted to touch. If I was going to go outside the state, it would be more difficult to basically get other banks understanding because there has been, with prior administrations, a war on coal. But the Bank of North Dakota was willing to do it because it would save jobs, and it would save a really important economic piece of this state. We can initiate the entire strength of the state, and that, over time, really lines up closely to what's the strategic direction of this whole state of North Dakota.
What's important to us? The Bank of North Dakota is a little bit of a mix of this socialist and populist idea. We're a primarily a red state, right? And we have the only state owned bank left in the union. And that's a pretty socialist idea, right? In the grand scheme of things. And yet it's working. It was started during a socialist populist movement here that swept up a lot of the Midwest in the early 1900s. I like to say we were formed by angry farmers. The wheat farmers were not liking the shipping rates, the interest rates that were getting out of the big banks out of Minneapolis. And so they actually formed their own political party, the Nonpartisan League.
I think the tyranny of distance has created that. The bank was started to combat the concentration of those industries in places like Minneapolis and Chicago, where we were being hurt by basis points and distance and all that. The bank is often used as a conduit for public private partnerships. Take, for example, the $450 million Theodore Roosevelt Presidential Library in Medora. The Bank of North Dakota was able to give a line of credit to this institution for $70 million. And what that did was it took pledge payments years out in receiving capital for this institution, and it financed it at 0% interest rate, allowing us to start
construction to begin this great adventure that allows us to have it open today. In some ways, the Bank of North Dakota is a typical community bank. State residents can open accounts with as little as $50. The bank makes money investing those deposits in a profitable ventures. In June 2026, the Bank of North Dakota reported $10.6 billion in assets. That's a small pool of funds compared to major commercial banks like JP Morgan and Bank of America. But in many ways, the Bank of North Dakota is distinct from private commercial banks. For example, it does not maintain federal deposit insurance, which insures up to $250,000 in individual accounts. Instead, 100% of the deposits at this bank are guaranteed by the
full faith and credit of North Dakota. The state has a choice where it's going to hold its general fund dollars. Most of them will sit them in a bank. Typically a bank they don't own by owning your own bank. You can deposit your funds and then you get the advantage of bank leverage. We use those deposits then to do our disaster loans, do our student lending, and then we make a nice healthy profit back to the general fund. Each year, the Bank of North Dakota sends millions of dollars back into the state general fund. And as you can see, the funds sent into the state have grown over the years, reaching almost 1.9 billion over the bank's lifetime. That's helped
the state maintain a strong fiscal footing and relatively low tax rates at the state level. It also gives North Dakota the ability to bail out citizens and businesses that fall on hard times. We're living in a moment where, but for the bank, you would see perhaps several farm foreclosures at a time when farmers were going to have a hard time getting all the operating loan they needed, with the low prices and tariffs and other things. That is transformational compared to other agricultural states where you are seeing bankruptcies and foreclosures. However, there is a bit of a political side. The governor has a role, the legislature has a role, and it's also run by an industrial commission.
The minute you have something that is owned by the state, then politics becomes a part of that. But I think everybody who comes to serve in these elected positions recognizes how special it is and wants to make sure that we aren't crossing those lines that cause the bank to be a problem and not a benefit. I really attribute that governance framework to the 107 year history, and why we're still around, and many other public banks have failed out up to this point. Progressive candidates have been proposing state run banks for years. We see states like Massachusetts, Washington state, who are considering copying North Dakota, which Donald Trump carried by double digits in the last election.
We're allowing big Wall Street banks to use our tax dollars to make tons of money for their shareholders and themselves. There's always some risks, but I would argue that your bank is much safer in the hands of a democratically controlled public opinion, as opposed to private shareholders. What I run into is most of them want to jump right into we want to do it for this special purpose. And I say, that's great, but you missed a step. You've got to form your bank. Your deposits. You have to make a profit, reach that point, and then you can start to use your profits and your dividends to reinvest back into yourself to do those special needs projects.
We probably couldn't start one if we were trying to do it in 2026, but I'm sure glad it exists because it has been a huge benefit for the state. I start out our meetings with the Bank of North Dakota is that we wouldn't be here today without you. This guy right here, that's Ethan right there. It was a huge win for the area, the industry and to keep these communities surviving.
