National Credit Union Foundation Posts Resources to Help Credit Unions Serve Native Americans

The National Credit Union Foundation (NCUF) has released a white paper describing credit unions’ opportunities to serve Native Americans, and posted Native American outreach resources on its website.

To access the white paper and outreach resources, go to www.ncuf.coop, click Resources,” then click Native American Outreach.”

The Native American research is based on two NCUF initiatives in 2006:
  • NCUF’s national survey of credit unions with Native Americans in their fields of membership
  • NCUF’s summit of 14 leading credit unions serving Native Americans
Credit union leagues and foundations from 10 states participated in these initiatives.

“In a movement built upon a tradition of social responsibility, we feel a large part of the Foundation’s responsibility is to help credit unions reach untapped markets,” explained NCUF Executive Director Steve Delfin. “Our Native American initiatives were intended to help credit unions move along the learning path to reach and serve this underserved population.”

According to the latest Census, 2.5 million Native Americans live in the U.S. – nearly 1% of the population that has little or no access to financial services.

Opportunities

The 11-page white paper identifies many opportunities for credit unions to serve Native Americans, such as:
  • Minimal competition – Since only 14% of Native American communities have a financial institution, opening a branch and/or ATM can generate income to cover costs while meeting a community need. Some credit unions have placed a branch in a Native American casino or high school, or placed an ATM on a reservation.
  • Financial literacy – Tribal members need help with budgeting and long-term financial planning, especially when they receive per capita distributions, tax refunds, and/or casino allocations. Financial education can be targeted to Native American adults as well as students.
  • Membership expansion – Native American members are very loyal once you establish a trusting relationship. They will bring family into the credit union to become members. Then they will look to the credit union first when they need loans.
  • Increased lending – Consumer loans, auto loans, home mortgages on and off the reservation, construction lending, micro-financing, and business lending are all opportunities for credit unions.
  • Tribal government accounts – Tribal governments can be a significant source of deposits as they maintain large amounts of funds in their accounts. In addition, they can attract other tribal organizations to the credit union
  • Community Development Financial Institutions (CDFI) Fund – Credit unions can apply for and become certified CDFIs if they target Native Americans. This designation signifies lending in low-income communities and can help subsidize loan programs.
Model Products & Services

Several survey and summit participants are successfully implementing model programs they are willing to share with other credit unions able to serve Native Americans:
  • Sponsoring a reservation credit union
  • Financial literacy programs
  • Credit counseling
  • Volunteer Income Tax Assistance sites
  • Payday lending alternatives
  • Business lending
  • HUD Housing Guarantee program (Section 184)
Untapped Resources

Most credit unions may not know about or know how to access resources available to help serve Native Americans:
  • Grant funding – A large pool of funds are available from governmental agencies and private and corporate foundations to help non-profits reach Native Americans. For example: The CDFI Fund has a Native American program where organizations can apply for assistance; the Annie E. Casey Foundation and the Internal Revenue Service have provided funds to develop outreach tools to promote access to the Earned Income Tax Credit program.
  • Partnerships – Various types of partnerships can be formed with organizations already serving Native Americans. These partnerships can be leveraged to help strengthen a partner’s program as well as a credit union’s. For instance: Tribal governments have access to information about the tribe’s programs, organizational structure, business endeavors, networks, strategic plans, and political players; all of these resources can be leveraged to help a credit union determine the best way to serve the tribe.
  • National support organizations – Several national associations and organizations are dedicated to serving Native Americans. Some offer technical assistance and training. For example: The Native Financial Education Coalition is a network of more than 100 organizations and tribes addressing the financial education needs of Native people. Also, First Nations and Owesta provide training on the CDFI Fund’s Native American program.
“As with other underserved markets, serving Native Americans requires some knowledge and expertise that may be new to the credit union but which can be acquired,” concluded white paper author Ruth Jaure, NCUF’s Program Development Director who next month will become the CDFI Fund’s Program Manager. “By learning about best practices and model programs, credit unions can teach each other. Identifying the various resources available to organizations reaching Native Americans is another step toward acquiring the knowledge to successfully serve Native communities.”