Unprecedented Analysis Of Financial Needs In Indian Country Demands Change From Banks In Native American Community Development Investments

Traditional financial services providers are failing communities on and near tribal lands to such an extent that change is only possible if funders begin routing resources through locally operated and culturally attuned Native American organizations, a new report from the National Community Reinvestment Coalition (NCRC) and Native Community Capital (NCC) has found.

“The federal government guarantees that a bank will never lose money on a home loan in Indian Country, yet the industry isn’t taking them up on the offer,” said Jesse Van Tol, President and CEO of NCRC. “Our unprecedented mapping of the financial needs of Native American communities in New Mexico and Arizona shows that the industry’s failure to lend in these places has created an economic dead zone. Reviving it will require significant change – especially as promising new Community Reinvestment Act incentives tied to tribal lands come online.”

The report is available here. 

“This report conveys to the world what tribal communities know all too well: banking in Indian country is broken, and there’s almost no-one from the financial industry there to even try to fix it,” said Dave Castillo, CEO of NCC. “The history of violence, expropriation and extermination that the US government has visited upon Native America is relatively widely known. The present-day on-going economic exclusion by banks should be understood just as well because it perpetuates levels of exploitation, extreme poverty and human suffering in  tribal communities that most Americans associate only with the poorest countries in far off parts of the world. Until community development funders get how they’re failing us, and recenter their work around local Native-led institutions that can actually be effective, the devastating economic paralysis created by this neglect will only grow worse.”

The report’s Financial Needs Index (FNI) maps nearly a quarter-million square miles of the American southwest according to a proprietary methodology which uses a variety of metrics, both of current service availability and of material privation. Where an FNI map of a city might show some neighborhoods aren’t as well-served as the ones down the street, these new maps indicate that entire tribal communities are cut off from the economic infrastructure of the nation.

The report found that home loans to Native Americans are not only rare in the study area, but are in half the cases being used to buy manufactured homes that depreciate in value. Such borrowers are also being charged exorbitant rates and fees for the privilege by a pair of Warren Buffett-owned firms that monopolize the market.

The research also revealed that entrepreneurs in tribal areas received just one cent of every dollar loaned to small businesses in Arizona and New Mexico over a four-year period. 

The full report is available here.