Burgum recommends against combining two ND state agencies
BISMARCK — North Dakota Gov. Doug Burgum has recommended against merging two Cabinet-level state agencies, arguing such a move wouldn't result in "meaningful" savings or operational efficiencies.
In a report presented to state lawmakers Tuesday, July 10, Burgum said combining the Department of Financial Institutions and the Securities Department would "negatively impact service to citizens and businesses in our state." He cited each agency's "distinct regulatory policy objectives."
The study was mandated by lawmakers during last year's legislative session, which saw significant spending cuts. Burgum, a Republican and former software executive elected on the promise of "reinventing government," said his administration is still trying to make government more efficient in other ways.
"Reinventing state government to create efficiencies to better serve North Dakotans is a top priority" for Burgum's administration, said the governor's general counsel Leslie Bakken Oliver.
The interim Government Administration Committee concurred with Burgum's recommendation in an 8-1 vote Tuesday. The lone dissenter, outgoing Republican state Rep. Roscoe Streyle, suggested going even further and combining both agencies with the state Insurance Department, which is led by an elected statewide official.
"(It) makes perfect sense," he said. "But then you're tearing down walls and people don't like that."
Both agencies are relatively small — the Department of Financial Institutions has 30 employees and an $8.4 million two-year budget while the Securities Department has just nine employees and a budget of less than $2.4 million. The former agency regulates state-chartered banks and credit unions, among other duties, while the latter department registers and regulates investment firms and investigates investment fraud and misconduct.
Rick Clayburgh, president and CEO of the North Dakota Bankers Association, said his organization wants the Department of Financial Institutions to be held in "high regard" among federal regulators. He noted that the agencies have differing funding streams.
"We want to ensure that the department is run properly," Clayburgh said. "We didn't believe that there would be any efficiencies."
The 34-page report included survey results from a dozen states that have combined their securities and baking regulators into an umbrella agency. The regulators were still separated by two distinct divisions within the agency, the report said, but some states said "some budget efficiencies were likely gained in the areas of administration, information technology and/or human resources."
The report said, however, that "cost savings opportunities resulting from staff reductions were not readily apparent" for North Dakota's agencies.
Department of Financial Institutions Commissioner Lise Kruse and Securities Commissioner Karen Tyler agreed with Burgum's recommendation against merging the agencies.
"What the two departments do are just so different," Kruse said.