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Kai Ryssdal: Whether it's that crisis in Irish finances that Stephen Beard was telling us about earlier or Congress today pressing for answers on how foreclosure paperwork could possibly have gotten so messed up, banks are nobody's favorite industry right now. Truth is, though, that we need 'em. Banks are how money moves around an economy -- ours, Ireland's and the world.

So with that in mind, our special correspondent David Brancaccio has been looking at banking as part of our series Economy 4.0. How we can make the global economy work better for more people.

Today, David takes us to the Great Plains, the Upper Midwest, where they do banking a little bit differently.


David Brancaccio:We're on 3,300 acres of soybeans and corn near the town of Page, N.D. Farm family Randy and Michelle Thompson nearly lost it all in a few minutes of a mid-summer day three years ago.

Randy Thompson: You can see the hail storm right, right the track that it took and it came right down the middle of our farm. So it got pretty much everything.

Michelle Thompson: Yeah, that was a tough one. He was on the phone and he stopped out and said, "You know, it'll be all right, that's the way farming is."

The man who came calling after the hail is named Ron Mueller. Insurance adjuster or clergyman? No. Mueller is president of the Casselton, N.D. branch of an outfit called Bremer Bank. Mueller is from a farming family; he's known the Thompsons for decades. His decision was to keep the credit flowing to the farm.

Ron Mueller: You go through adverse conditions, and that's when I think a bank is a bank, is when you're there to help people through that situation. Because they'll bounce back.

That confidence is reciprocated by Mr. Thompson, the bank's client.

Randy: Oh I can't imagine working with a national bank. It's so much better to have someone who's aware of everything happening.

Bremer Bank, based in St. Paul, Minn., is big on knowing its customers -- intimately, says Bremer's CEO Pat Donovan.

Pat Donovan: There are competitors out there, they simply can deliver at a lower cost and reduced fees, etc, etc. Then there's another niche that wins on technology; they just have more bells and whistles than anyone else. Our niche is based on a customer intimacy.

Bremer is what's known as a community bank. The idea is, when local depositors put money in, the capital then circulates within the region as new loans to other local folk.

David Korten: It's a very sound idea.

Economic analyst David Korten is author of the book "Agenda for a New Economy."

Korten: A bank that offers real financial services is very different than a predator bank that is basically trying to extract as much wealth as possible out of the community.

Note that Bremer is a for-profit bank. So far, not so weird. But listen to its structure: 8 percent of Bremer is owned by its employees -- its tellers, loan officers, security guards. And the other 92 percent of the bank is owned by -- get this -- a charity. The Bremer Charitable Foundation takes profits and gives them back to the communities the bank serves as grants. There were about $23 million in Bremer grants last year, including $35,000 to Community of Care, a North Dakota non-profit that helps older people like Louise Flemmer get to a doctor's appointments.

Louise Flemmer: Yeah, I think it was the 26th or 28th of September.

Founder Otto Bremer looms large in the bank's history. The Schmidt Brewery, owned by the Bremer family, generated early capital for him. Then, there's Otto Bremer with a satchel of cash, keeping little banks on the prairie going during the Great Depression. Bremer never married and when he died nearly 60 years ago, his charitable foundation kept the good works going. The bank's current CEO says staying connected to people has been an asset during these bad times.

Donovan: I would say we've fared better in the last three years of a difficult recession, because we knew our customers a lot better.

But not all community banks have done as well. In some cases, they didn't have the reserves to survive the current drop in real estate and other asset prices. But financial services expert and activist Jared Gardner has a plan.

Jared Gardner: It was really the economic crisis, where we started to see the community banks suffering while the big banks were getting bailed out and knowing that community banks support small business and our local farmers, we wanted to figure out a way to shore that up.

Gardner wants his state government to start up a kind of mini-Federal Reserve, a state-owned bank that can act as a rich uncle to retail banks that want to lend to worthy borrowers.

Gardner: It's a state-run bank, but it's a banker's bank. They have very little interface with the actual public. So, they provide the needs of community banks, and they set their policies to get the most money into the community.

The one example of a state-run bank is here: It's called the Bank of North Dakota. Bremer's CEO sees it as a partner and calls this pint-sized Fed a "tremendous resource." Many public officials are fans as well. The Bank of North Dakota gives its profits not to charity but to the state. Over the last decade, $300 million went to North Dakota's treasury. That's one reason that Oregon and other states are looking at setting up state banks of their own.

In Page, N.D., I'm David Brancaccio for Marketplace.

Ryssdal: David's going to be hosting a PBS television special this week, called "Fixing the Future," a road trip that he took, trying to find new ways to learn about ways to move the economy along. There's more at the Economy 4.0 blog.

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