The Bank Under Fire
In its first years of existence, the banks advisory board met rarely and was used primarily to comment on bank decisions. In 1974 Governor Arthur Link was forced to give the board a much more active role to hold off a political fight centering on the bank.
In late 1974 a bank vice-president was convicted of embezzlement and participating in a kickback scheme. Within weeks, a bank attorney came under fire for accepting legal fees from Bank customers and resigned. The attorney was cleared of any impropriety but less than a week later, an individual claiming to be a local banker requested a cash delivery, a common practice of the Bank, and told the Bank employee a courier would arrive by cab. The cash was given to a cab driver–who was not a courier–and delivered to a man at the Burleigh County Courthouse–who promptly disappeared with the money. All hell broke loose.
Shortly after these incidents, Attorney General Allen Olson called for the removal of Thorndahl as bank president. A Senate investigation into Bank practices soon became open season on the concept of state-owned banking. To forestall Senate action that might endanger the future of the bank, Link activated the advisory board giving them more voice in setting policy and making management recommendations to Bank staff. Herb Thorndahl weathered the scandals at the Bank and continued to serve as president until 1985–the longest tenure of any Bank of North Dakota general manager.
Through the 1980s, with greater input from the banking community, the Bank became integrated into the economy and grudgingly accepted by private bankers. The recession of the 1980s brought frustration with the Bank. Farmers and ranchers were hit hard by falling prices, poor crops and the worst drought since the 1930s. Small businesses found that financing was drying up along with the corps in the fields.
Although the bank had remained profitable and continued to return money to the general fund each year, the bank's reputation with borrowers left a lot to be desired. To some, the initials BND didn't stand for the Bank of North Dakota, it stood for the Bank of No Deal. Loan applications were cumbersome, delays were numerous, and the bank was perceived to be a bureaucratic dinosaur.