Learn How Native CDFIs Help Grow the Economy

“I see Native CDFIs building hope; it’s one person at a time, it’s one family at a time, it’s one community at a time.”

— Patrice Kunesh (Standing Rock Lakota), Assistant Vice President and Co-director, Center for Indian Country Development, Federal Reserve Bank of Minneapolis

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Help Native communities build assets that can lead to self-sufficiency and long-term impact.

Native CDFIs build a powerful multiplier effect in tribal communities, creating jobs and self-sufficiency, which in turn leads to more stable and prosperous communities. Most Native CDFIs function as independent nonprofits—separate from tribal governments—and provide hard-to-gain access to credit, equity, and financial assistance, especially in rural communities.

“[We] invest in an individual to begin to build their capacity and their family wealth and assets. . . . That’s one of the reasons Native CDFIs are climbing off the [growth] charts.”

— Tanya Fiddler (Cheyenne River Sioux), Executive Director, Native CDFI Network

The loans and technical assistance offered by Native CDFIs help Native entrepreneurs and Native-led businesses thrive, which creates jobs, an expanded tax base, and new business development and market opportunities.

Meeting climbing capital demands in Indian Country.

Native communities are among the fastest growing segments of the United States economy, and the need for a loan to start up or expand a business or to buy a home is outstripping the financing available in markets served by Native CDFIs. Nationwide, financing demands are projected to double over the next five to seven years in Native communities.

A catalyst for economic growth, Native CDFIs are pressed to keep pace with the growing capital demands and needs for their services. The Center for Indian Country Development at the Federal Reserve Bank of Minneapolis led a survey [1] showing that as Native economies grow, Native CDFIs are being asked to respond to higher needs for capital. The additional amount to meet Native CDFI financing needs in 2017 was $48 million.

To do so, Native CDFIs will require stronger organizational structures, more advanced skills, and greater availability of technical assistance for entrepreneurs.

Here are some already-existing federal programs that cultivate growth for Native CDFIs.

A number of economic and community development programs can provide equity, loans, loan security, and other credit enhancements that support Native CDFIs’ work.

Treasury supports partnerships
with community financial institutions
The U.S. Department of the Treasury’s CDFI Fund (CDFI Fund) and its Native Initiatives program bolsters economic self-determination in Native communities through a variety of opportunities that foster Native CDFI/community bank partnerships [2] In many cases, banks with a Native CDFI in their assessment area could leverage public funds to support technical assistance, trainings, and more.

HUD can help secure home loans for Native families
Section 184 Indian Home Loan Guarantee Program (HUD) is a game changer for homeownership in Native communities. HUD can attract outside investments from financial institutions. It provides them with a 100% loan guarantee to assure investments held in Indian Country trust lands will be repaid in full in the event of foreclosure. [3]

FDIC and CDARS back up small dollar deposits
The Federal Deposit Insurance Corporation (FDIC) encourages financial institutions to invest in Native CDFIs. Banks can choose to make a small dollar deposit (under $250,000) to a Native CDFI backed by FDIC insurance. [4] Credit unions participating in the Certificate of Deposit Account Registry Service (CDARS) can be insured if making a deposit over $250,000. [5]

“I’ve seen it done. When they [financial institutions] take that leap and partner with tribes, marvelous things happen. . . . Building that business relationship and then really constructing a whole community.”

— Patrice Kunesh (Standing Rock Lakota), Assistant Vice President and Co-director, Center for Indian Country Development, Federal Reserve Bank of Minneapolis

“One of the beautiful things about CDFIs—Native CDFIs in general—is we have to provide education and training in conjunction with our lending activities. So when you pair those two things together, we are seeing great success. We’re changing the economic landscapes of our communities and providing opportunity which normally hasn’t been provided.”

— Chrystel Cornelius (Ojibwe; Oneida), Executive Director, First Nations Oweesta Corporation

“[We] invest in an individual to begin to build their capacity and their family wealth and assets. . . . That’s one of the reasons Native CDFIs are climbing off the [growth] charts.”

— Tanya Fiddler (Cheyenne River Sioux), Executive Director, Native CDFI Network

“I think investors would get it much faster . . . if they could go see a reservation community and see the work of Native CDFIs and meet some of the entrepreneurs we’re working with.”

— Krystal Langholz, Chief Operations Officer, First Nations Oweesta Corporation

CHECK OUT THESE SUCCESS STORIES

Learn how Native CDFIs are building assets that lead to financial capability for hardworking families in Native communities.

Northwest Native Development Fund (NNDF)

NNDF is growing its lending and training programs with funding support from Wells Fargo Diverse Community Capital Program and from us. Recently, NNDF helped a Native entrepreneur open a first-of-its-kind restaurant on the Colville Reservation, giving locals an opportunity to stop by for a nutritious meal. NNDF supplied the training and financing support to get the idea off the ground. Learn why Wells Fargo is proud to invest in NNDF.

Native American Development Corporation (NADC)

NADC has a long, successful history of supporting Native entrepreneurs, providing sustainable business plans, loans, and technical assistance. Over the years, NADC has worked closely with more than 20 tribes in the Rocky Mountains and Great Plains. Recently, they partnered with Billings-based Rocky Mountain Bank to help one tribe get the funding needed to start a major development project that would help them become completely self-sufficient. Learn what was eye opening for Rocky Mountain Bank’s market president in this partnership.

First Nations Oweesta Corporation

The only Native CDFI intermediary, Oweesta offers financial products and development services exclusively to Native CDFIs and Native communities. As investments and homeownership in Indian Country spike, Oweesta helps Native CDFIs meet climbing capital demands through their membership services and by strengthening the connection between financial institutions and Native CDFIs. Check out this example—Oweesta brought together Native leaders and investors for networking and relationship building.

NACDC Financial Services

NACDC recently expanded their program to include homeownership loans after years of successful lending to support Native agriculturalists, artists, small-business leaders, and more. Last year, the Kendeda Fund showed its confidence in NACDC with a multiyear, $200,000 grant to support their lending capital programs. Find out what projects NACDC hopes this funding will help support.

“I see Native CDFIs building hope; it’s one person at a time, it’s one family at a time, it’s one community at a time.”

— Patrice Kunesh (Standing Rock Lakota), Assistant Vice President and Co-director, Center for Indian Country Development, Federal Reserve Bank of Minneapolis

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WHAT’S THE NATIVE CDFI GROWTH POTENTIAL?

Get insights from this community report sponsored by the Federal Reserve Bank of Minneapolis.

Federal Reserve Bank of Minneapolis Community Development Report »