March 29, 2006
OCC Focuses on Commercial Lending in Indian Country
The Office of the Comptroller of the Currency (OCC) today released a Community Developments Insights report, “Commercial Lending in Indian Country: Potential Opportunities in an Untapped Market,” which highlights best practices for banks making commercial loans on tribal trust lands as well as to tribes and tribal enterprises.
“We see the growing demand for credit and capital on Native American land, coupled with recent revisions to the Community Reinvestment Act (CRA), generating increased interest in financing for tribal economic activities,” Comptroller of the Currency John C. Dugan said. “We are pleased to offer this resource to banks seeking creative financing techniques and partnership models to assist in the economic development of Indian Country.”
This Insights report discusses specific approaches implemented by bankers involved in this market to accommodate some of the unique business and legal challenges to commercial lending in Indian Country. The report describes how banks can use Federal loan guarantee programs available to help mitigate risk in this market. Additionally, the report presents an overview of regulatory changes that allow positive CRA consideration for community development-related financing activities in underserved or distressed non-metropolitan middle-income areas. Native American communities in sparsely populated rural areas which may have had difficulty obtaining financing for community development projects may now see a broader range of activities eligible for CRA consideration.