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Community Developments Investments (August 2013)

  Jacqueline Johnson Pata, Executive Director of the National Congress of American Indians NCAI
Jacqueline Johnson Pata, Executive Director of the National Congress of American Indians, speaks at the 2013 State of the Indian Nations annual gathering in February in Washington, D.C.

Tribal Nations: Ready and Able to Fully Contribute to America's Prosperity

Jacqueline Johnson Pata, Executive Director, National Congress of American Indians

The story of access to capital in Indian Country is one of unrealized potential.

The unique wisdom of tribal nations has been evident since before the United States was even formed. On every dollar bill, as part of the Great Seal of the United States, there is an image that speaks to the wisdom of Native people: an eagle clutching a bundle of arrows in its talons. Those arrows are a symbol of the great Iroquois confederacy. The Iroquois had a profound influence on the outcome of the Revolutionary War and the origins of American democracy. On June 11, 1776, the Iroquois chiefs were invited to the Continental Congress. They spoke about their confederacy and shared the hope that the new Americans would “act as one people and have but one heart.”

As we consider the economic potential of tribal nations, that bundle of arrows is a powerful image—for tribes and for all Americans. It shows us that our united strength is much greater than our individual strength alone. It is our conviction at the National Congress of American Indians (NCAI) that, just as tribes need the access to capital that our nation’s banks can provide, so, too, can banks benefit from partnerships with tribes.

There are 566 tribal nations that are part of the American family of governments recognized in the Constitution, Supreme Court decisions, and acts of Congress. These governments range in size from small rancherias in California and Alaska Native villages to the Navajo Nation in Arizona, New Mexico, and Utah. The Navajo Nation, which has more than 300,000 tribal citizens, covers 17 million acres—larger than nine states: Maryland, Vermont, New Hampshire, Massachusetts, New Jersey, Hawaii, Connecticut, Delaware, and Rhode Island.

In total, tribal lands cover more than 100 million acres, or more than 5 percent of the U.S. land base. Taken together, this area would make Indian Country America’s fourth-largest state, behind only Alaska, Texas, and California. The 2010 census reported a Native population of more than 5.2 million people, 1.7 percent of the population.1

Economic Challenges and Opportunities

Tribal nations have faced depression-level unemployment for generations. According to 2006–2010 American Community Survey estimates from the U.S. Census Bureau, the on-reservation unemployment rate for American Indians was 19 percent, compared with 8 percent for all Americans. Unemployment in Alaska Native villages was estimated even higher, at 24 percent.2 During the most recent recession, the Economic Policy Institute estimated that the Native unemployment rate rose at a rate 1.6 times that of the rate for the white population.3

The difficulties in accessing capital paint an even more troubling picture. More than 40 percent of Native people have limited or no access to mainstream financial services (one of the highest rates in the nation), 26.8 percent of American Indian and Alaska Native households are underbanked (have a bank account but use alternative financial services), and an additional 14.5 percent are completely unbanked.4 In 2001, the U.S. Department of the Treasury’s “Native American Lending Study” reported that 86 percent of Native communities lacked access to a single financial institution (with a broad definition that included a simple ATM) and 15 percent of Native community members had to travel more than 100 miles to access a financial institution.5 Given those stark figures, it is not surprising that the unmet capital need in Indian Country was estimated in 2001 at more than $44 billion.6

In spite of these challenges, tribal economies—those with gaming and those without—grew at a rate three times that of the rest of the U.S. economy, according the Harvard Project on American Indian Economic Development, which conducted a detailed analysis of economic data between the 1990 and 2000 censuses.7 National business data paint a still more promising picture, with 2007 data from the Census Bureau identifying 236,967 businesses owned by individual American Indian and Alaska Native people, an increase of 17.7 percent from 2002. This increase is more remarkable because the data excluded tribally owned businesses. Individually owned American Indian and Alaska Native businesses generated $34.4 billion in receipts in 2007, a 28 percent increase from 2002.

Recent studies have revealed the significant economic impact of particular tribes. The Chickasaw Nation of Oklahoma has an annual economic impact on the state of more than $2.4 billion and supports 16,000 jobs, according to a study by the Economic Research and Policy Institute, Oklahoma City University.8 A 2006 study showed that the combined economic impact of tribes in Washington state amounted to $3.2 billion and 30,000 jobs.9 Even in remote places with limited economic activity, tribes can play an outsize role in promoting economic development. In rural southeast Alaska, the Central Council Tlingit and Haida Indian Tribes of Alaska is the seventh-largest private employer and generates an annual economic impact of $22.5 million.10 An interesting feature of many of these studies is that they reveal the economic benefits tribes bring to entire regions; the Washington study showed that tribes created jobs for more non-Native people than for tribal citizens by a ratio of almost 2–to–1.

The financial services sector is another significant indicator of strength in Native communities. The number of Native community development financial institutions (CDFI) has grown significantly in recent years, and there are now more than 70 certified Native CDFIs, with dozens more in various stages of development. The South Dakota Indian Business Alliance commissioned research that showed that on South Dakota’s reservations—some of America’s poorest communities—there was accelerated income growth and job creation compared with non-Native communities. These effects were particularly pronounced when Native CDFIs were present.11 Tribes are increasingly using CDFIs strategically: for example, to enhance already successful business development (in places like Salt River Pima–Maricopa Indian Community in Arizona and the Citizen Potawatomi Nation of Oklahoma) and to build strong economies in some of America’s poorest and most remote communities.

A timely enhancement to Indian Country’s economic potential is the fact that the federal government has recently settled dozens of outstanding trust cases, including the Cobell and Keepseagle class actions and a series of individual tribal trust settlements. It is estimated these settlements will amount to $3 billion by mid-2013, offering significant new resources that will require diverse financial services to promote ongoing banking relationships. The NCAI has launched a national campaign, “Protect Native Money,” to support tribal leaders and Native citizens in best utilizing these valuable resources and to engage important partners, including financial institutions.

Partnering in the ‘New Era’

Amid all of this economic promise—some of it in the darkest days of the economic crisis—it may be natural to wonder why access to capital is such a chronic challenge for tribal nations. The simple answer is that there is an education gap. When the NCAI was formed in 1944, the founding tribal leaders placed a priority on educating the public about Native peoples. Seventy years later, that challenge remains. Native people and the economic potential of tribal nations often go unnoticed.

Now, in what we have called a “new era” in tribal–federal relations, we have identified a few promising areas where tribes, financial institutions, and the federal government can partner to advance economic growth in tribal nations that strengthens tribal and regional economies.

  • Education: The NCAI and our member tribes stand ready to engage and educate financial institution partners to understand the most promising partnerships. Just as there are big differences between California and Delaware or Alaska and Maine, there is significant diversity among America’s 566 federally recognized tribes, and understanding those differences is critical for successful partnerships.
  • Housing: The housing need in Indian Country is dire. Almost 75 percent of housing units are not owned using traditional mortgage products, and infrastructure other Americans take for granted (indoor plumbing, kitchen facilities, and telephone service) are absent at alarming rates. In 2001, the U.S. Department of Housing and Urban Development (HUD) reported that fewer than 1.5 percent of eligible Native people had mortgages. The HUD Section 184 program is a government-guaranteed mortgage with a very low default rate that has been underutilized, in part because of limited interest among financial institutions. Tribes are ready to partner with financial institutions to utilize Section 184 and other federal programs to expand housing in Indian Country.
  • Business development: As noted above, Native CDFIs have created supportive environments to incubate successful Indian-owned businesses. In some communities, tribes have also purchased banks to build diverse financial services systems, but in many cases tribes are still looking for banks to partner with in fulfilling the economic potential of tribally and individually owned businesses.
  • Youth financial education: About 42 percent of Native people are younger than 25, and almost 1 in 10 is 15–19.12 There is a unique opportunity to equip Native young people with the skills they need to lead their tribal governments and manage their personal finances successfully. Tribes all over the nation are looking for banking partners to advance financial capabilities among their young people.


When the Iroquois leaders met with the Continental Congress and urged them to “have but one heart,” they offered enduring wisdom that will reestablish America’s economic success. Like that bundle of arrows in the eagle’s talons, we are stronger together. We can move forward with one heart, acting as one people. Just as tribes inspired the greatness of American democracy, so tribes and Native people can inspire American businesses to reach new heights. We stand ready to partner with financial institutions, other governments, and the private sector to fully realize the immense economic potential of America’s tribal nations.

Jacqueline Johnson Pata can be reached at

Community Developments Investments is produced by the OCC’s Community Affairs Department. Articles by non-OCC authors represent their own views and not necessarily the OCC’s.

1U.S. Census Bureau, “Overview of Race and Hispanic Origin: 2010,” 2010 Census Briefs (March 2011).
2Data generated by the NCAI using the U.S. Census Bureau’s American FactFinder.
3Algernon Austin, “Different Race, Different Recession: American Indian Unemployment in 2010,” Economic Policy Institute (November 2010).
4Federal Deposit Insurance Corporation, “2011 FDIC National Survey of Unbanked and Underbanked Households” (September 2012).
5Community Development Financial Institutions Fund, Department of the Treasury, “Report of the Native American Lending Study” (November 2001).
7Jonathan Taylor and Joseph P. Kalt, “American Indians on Reservations: A Databook of Socioeconomic Change Between the 1990 and 2000 Censuses,” The Harvard Project on American Indian Economic Development (2006).
8Steven C. Agee, “Estimating the Oklahoma Economic Impact of the Chickasaw Nation,” Economic Research and Policy Institute, Oklahoma City University (May 15, 2012).
9Jonathan Taylor, “The Character and Effects of the Indian Economy in Washington State” (2012).
10“Contributions of Central Council Tlingit and Haida Indian Tribes of Alaska,” McDowell Group (March 2010).
11Tanya Fiddler, “Remarks to the South Dakota Indian Business Conference” (2011).
12NCAI Policy Research Center, “Native Youth Count” (November 2011).