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Know the West

Native-owned financial institutions battle credit deserts

In rural areas without access to banking, tribal enterprises are helping fill gaps.


Circles indicate the headquarter locations and asset sizes of banks and credit unions owned by, and community development financial institutions primarily serving, American Indian, Alaska Native, and Native Hawaiian individuals and communities. Click the source to view an interactive version of this image.

Native American-owned financial institutions are helping combat “credit deserts” in rural and Indigenous areas. The Center for Indian Country Development (CICD) released a map of Indigenous banks, credit unions and community development financial institutions (CDFI) that serve both tribal members, who often lack access to financial entities, and the surrounding rural communities as well.

According to Patrice Kunesh, director of CICD, Indian Country and rural America often lack access to financial institutions. When we ask if we are meeting the credit and capital needs of Indian Country, we will measure the distance between the community and the nearest bank, says Kunesh. That distance can be well over 50, 60, 70 miles or more.” Kunesh says tribes considering moving into financial services can fill these gaps. 

The Metlakatla, AK branch of Tongass Federal Credit Union is a financial cooperative that tailors services to residents with cyclical income cycles.
Denise Hudson
Kunesh also says Native-owned banks offer tribal members opportunities other financial institutions cannot, owing to their intimate knowledge of the community. Tongass Federal Credit Union, for instance, serves southeast Alaska and is able to modify and craft lending products, such as car or home loans, specifically for local Indigenous communities. (Tongass) knows that income cycles are very cyclical, according to hunting and fishing and so forth,” says Kunesh. (They) are able to structure the loan to support the income cycles of that community.”

Beyond structuring loans and mortgages to match the rhythms of particular communities, CICD says the introduction of micro-site banking in tribal areas can help tribal citizens cut down on the long drives required in places that lack local brick-and-mortar banks. At the same time, they also undermine predatory financial institutions, like payday lenders, preventing them from making inroads in rural communities.

A banking desert is an area with inadequate banking services. Low-income residents and the elderly are especially vulnerable to the issues associated with banking deserts.
Source: Morgan et al. and CASSIDI

“There’s a whole history of Native people not being served, and there’s another whole trend about Native Americans being preyed upon by payday lenders and check-cashing facilities that just charge exorbitant fees, said Kunesh.They’re paying a lot of money out of their own pocket to have a service that they should be able to have access to at nominal cost to them in their own community.

Nearly 100 Native-owned credit unions, banks and community development financial institutions serve tribal members nationwide, primarily in the West. Kunesh says that she hopes CICD’s map will foster understanding of the importance of Native-driven economic and community development in Indian Country.

“We see really big opportunities to create networks around access to capital.”

Tristan Ahtone is a member of the Kiowa Tribe and associate editor of the High Country News tribal affairs desk. Email him at [email protected] or submit a letter to the editor.