GOP shuns socialism, but North Dakota Republicans love socialist bank

BISMARCK, N.D. — In 1918, an offshoot of the progressive farmer-labor movement known as the Nonpartisan League swept into power in North Dakota, riding a populist groundswell of anger directed at big banks and industry barons in Minneapolis and Chicago.

The group was organized by former Socialist Party member Arthur C. Townley, a failed flax farmer who barnstormed the state in a borrowed Ford Model T calling for public ownership of key industries, including banks, mills and factories. By 1919, the state legislature authorized a state-owned and -operated bank.

Over a century later, the Bank of North Dakota still stands, and the state is reaping the benefits.

The Bank of North Dakota is the nation’s only surviving state-owned and -operated bank. It has persisted as Great Plains politics has shifted from prairie progressivism to deep-red conservatism, and it now manages about $11 billion in assets while enjoying broad support from the state’s current political leaders.

“I think it’s weird, right? We’re one of the most conservative states in the union, and we have this state-run bank that was started by first-generation Norwegian immigrants,” North Dakota Gov. Kelly Armstrong, a Republican, told CNBC. “I don’t think we could set one up now, but I’m sure glad we have it.”

In addition to Armstrong, the bank’s present-day boosters include the state’s U.S. senators, Kevin Cramer and John Hoeven — who is a former president of the bank, and former North Dakota governor and current Interior Secretary Doug Burgum. All are Republicans in a party where “socialist” is a pejorative on the 2026 campaign trail.

At its core, the Bank of North Dakota is a bank. It has a governance structure, holds the state’s deposits and provides loans. But it is also a unique institution that melds the political and financial arenas to advance the state’s industrial and economic goals. Those efforts can range from saving a coal plant on the verge of going belly-up to buying down interest rates on loans for agriculture, energy or housing.

“I’ve always said it’s a very interesting concept; obviously it’s a successful one up here,” Don Morgan, the Bank of North Dakota president and CEO, told CNBC. “It’s one that if you use it wrong, it could be a little bit dangerous. But if you use it right, it can be a really powerful financial tool.”

The bank also stands as a vestige of the country’s last populist socialist uprising, as the U.S. is now gripped by another ahead of the 2026 midterm elections. The bank, which is in a state President Donald Trump won by more than 36 percentage points in 2024, has been used as an example by Democratic, progressive and democratic socialist candidates and lawmakers from across the country who are trying to expand public banking.

CNBC traveled to North Dakota to talk with leaders of the bank, which…