The Wall Street Journal has an excellent story this morning on a nascent trend among municipalities to put their money in small local banks—and to get tough with the big ones. It’s the Move Your Money campaign for government.

What’s particularly relevant here is that it seems municipalities are rediscovering the fact that they have a lot of power to affect banking. See Los Angeles flexing its muscles:

This month, the Los Angeles City Council ordered city officials to try to renegotiate an interest-rate swap that is costing the city about $19 million a year. Under the motion, firms that won’t buckle would be banned from doing new business with Los Angeles.

And an idea, at least, in Maryland (emphasis mine):

Last month, C. William Frick, a Democrat from Montgomery County, Md., introduced legislation in the state House of Delegates that would allow state-chartered banks to win the state’s business if their bid came within 10% of those from larger banks. Mr. Frick says the move was triggered by concerns about credit-card practices and overdraft fees. “The federally chartered institutions come in here and tell us we can’t regulate them because of federal pre-emption,” he says. “We are powerless to stop them, yet we give them lucrative state contracts.”

What I’d be interested in knowing is why cities and states have done business with national banks in the first place. Why wouldn’t you want to put your money in local institutions that keep that money in the community? How much municipal government money is in the national banks versus hometown ones?

The Journal is good to get at those questions as much as it can in a 30,000-foot story like this, noting that Maryland does most of its business with Bank of America, in part because it wants a bank that has branches all over the state.

And there’s more of interest here. Bet you didn’t know the U.S. has a socialist bank:

Some states also are considering whether to establish their own state-owned banks, modeled after the 90-year-old Bank of North Dakota, the only one of its kind in the country. The bank, which has $3.9 billion in assets, partners with private financial institutions to make loans to local businesses and has returned $351 million to the state’s general fund since 1997.

I smell a story, don’t you? A quick Factiva search shows that the Bank of North Dakota has been undercovered. No major paper has done a story on it in the last two years, and only the Associated Press has looked at it in any detail.

Mother Jones, naturally, did a nice Q&A with the bank president a year ago. He said this:

Most corporations and banks, their top priority is to maximize shareholder return. And that is a nice byproduct for us because we do have a nice return—an NROA [return on net operating assets] of 2, a ROE [return on equity] of 25, 26 percent. But really where we take the most satisfaction is making sure we meet the needs of the state and finance those types of things that make our state go forward.

The bank isn’t a place where you go to do your checking. It operates like a North Dakota-owned Fed and puts the state’s money into loans in sectors it wasnts to support, like student loans, agriculture, and small business.

So, financial press corps, how about a deep dive into the Bank of North Dakota, which set profit records throughout the credit crisis as privately owned banks foundered?

You know you’ve read a good story when it gives you several ideas for more stories. Great work by the Journal piecing this together.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.