Hardmeyer - City Magazine

HARDMEYER: Providing
student loan financing has
been one of our pillars. In
fact, we provide over 70
percent of all student loans
in N.D. BND made the first
federally-insured student loan
in the country 42 years ago.
Right now, we’re facing the
most significant change
in our history: we are at
odds with the Obama
administration, which has
taken the stance, through its
budget proposal, to eliminate
the federal program we have
administered. The Obama
administration has decided
that the government can
provide this directly, taking
BND out of the equation.
This has been an important
role for the bank. We think
we can deliver much better
customer service than
federal contractors hired to
deliver a government-run
loan program. By October,
Congress will decide the fate
of this program. In any case,
our congressional delegation,
along with key BND
employees, have been working
hard on an alternative
solution. Time will tell.
What do you say to
CM: people who think
BND is somehow competing
with commercial banks?
HARDMEYER: Something
that is not understood very
well by most North Dakotans is
that BND was created to partner
with the banking industry, not
compete with them.
BND acts as a “banker's
bank.” Banks have financial
needs just like any person
does. Banks sometimes have
needs for liquidity, needs to
share risk or a need to share
the loan because they’re up
against the legal lending limit.
BND has provided a
great service to banks by
participating in their loans.
The loan is originated by
a local bank, and we buy a
part of it. If we are trying to
“incent” a particular part of
the industry, like a beginning
farmer or the primary sector,
we loan money at a lower rate.
Don’t you also
CM: provide checkclearing
services for banks?
HARDMEYER: We’re the
clearinghouse for virtually all
of the community banks in
the state. We used to process
about 4.5 million paper
checks a month. Now, it’s all
done electronically.
After 9-11, Congress passed
“Check 21.” You might
remember that, after 9-11,
all planes stopped flying
for about a week, so all the
checks around the country
sat on airplanes, and money
didn’t move.
Check 21 enabled banks to
accept electronic images of
checks. Now, all banks have
electronic-imaging equipment.
Banks send check images to
us, and we clear them.
What’s been
CM: your biggest job
challenge?
HARDMEYER: I have been
fortunate. When I stepped
into the role of president in
2000, BND was under John
Hoeven’s leadership.
It was well positioned and
operating with a strong
sense of purpose. We had
a seasoned executive team
but, over the next period
of several years, it became
evident that we needed to
invest significant money into
technology. Converting to
new systems and, in some
cases, designing and creating
them, has probably been the
biggest challenge.
We are now into the second
year of this national financial
crisis, and N.D. and BND
are weathering this very well
so far. We’ve been fortunate
in this state; agriculture
and energy sectors have
been very strong and other
diversification efforts have
paid off.
Our banks across the state are
run conservatively, and that
has made a big difference.
For BND, as we look to
the future, our immediate
challenges will be to ensure
our permanent role in the
student loan industry and
to deal with management
succession issues. Planning
is the key—as I tell our
employees, if you don’t know
where you are going, all roads
lead there.
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