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Community Developments Investments (August 2013)

  Experienced in doing business with tribal nations, U.S. Bank uses SBA 7(a) loans and New Market Tax Credits to lend and invest in Indian Country.  NCAI
Experienced in doing business with tribal nations, U.S. Bank uses SBA 7(a) loans and New Market Tax Credits to lend and invest in Indian Country.

Open for Business: U.S. Bank’s Experience in Indian Country

Melissa Borino, Senior Vice President, Community Affairs, U.S. Bank
Juanita Yost, Reporting and Communication Coordinator, Office of Corporate Citizenship & Financial Education, U.S. Bank

At U.S. Bank, community development means investing in people and their hopes and dreams for the future. We do that by providing products and services that meet the needs of diverse populations and serve as a social and economic foundation for achieving safe and secure housing, productive small businesses, and culturally vibrant communities.

Diversity and inclusion are entrenched in our interactions and results. To be the bank of choice, we offer the innovative products and services that our diverse individual and business customers need to achieve their goals. To be the partner of choice, we engage the talents and services of diverse suppliers and make a meaningful impact in the communities where we live and work.

One way we serve our diverse customer base is by fostering long-term partnerships through which we create customized solutions for each community we serve.

That has been our approach with our Native American individual, tribal government, and tribal-owned entity customers. While the majority of the products we offer are mainstream financial tools, they are delivered in a way that meets the unique needs of this community.

Understanding the needs and cultural values of all the customers we serve is crucial to our service. The needs we have identified for Native American individuals and tribal entities center on job creation, health care, social services, and economic development. We have accomplished this by recognizing their desire to remain independent and self-sufficient while sustaining their way of life and values.

Two-way communication and understanding with our partners is required—our customers should feel as comfortable working with us as we feel working with them. We work hard to earn this trust.

Challenges to overcome or work through include recognizing that tribal entities are sovereign nations. Bankers need to understand the sovereign immunity doctrine, which may require special and sometimes challenging documentation. Bankers also need to understand the political nature of the tribes they are working with and develop strong relationships with members of the Tribal Council and Business Council, remaining aware of any changes in the councils. A person meeting with these councils is meeting with a nation’s top government officials. The Tribal Council and Business Council members are elected by the majority vote of their nation’s citizens.

Below are several examples of how U.S. Bank has successfully provided loans, investments, and services in Indian Country.

Lending: Gila River Indian Reservation, Ariz.

In 2012, U.S. Bank provided a $1 million Small Business Administration 7(a) loan to a business owner who wanted to expand his facility to a vacant building on the Gila River Indian Reservation in Arizona. The mission of this innovative business is to create, design, and implement unique nutritional concepts and products to improve the health and well-being of animals and people worldwide.

The proposed business expansion was expected to directly benefit the Gila River Indian Reservation by providing income to the community as well as offering the possibility of future jobs for workers from the tribe. Financing the project involved some unique circumstances, given the facility’s location on an Indian reservation. The business owner had to have the lease approved by a tribal committee and the U.S. Bureau of Indian Affairs, which resulted in a longer loan process than was originally planned. But patience and attention to detail and Gila River Tribe requirements resulted in a successful loan and business expansion.

Investing: Pueblo of Laguna, N.M.

U.S. Bancorp Community Development Corporation (USBCDC), the community investment subsidiary of U.S. Bank, is the nation’s leading new markets tax credit (NMTC) investor, specializing in making and managing federal and state tax credit equity investments that support business growth and job creation and spur economic development in underserved communities across the country.

In Pueblo of Laguna, a reservation in central New Mexico west of Albuquerque, USBCDC invested nearly $2.7 million in NMTC equity to help finance the construction of a new grocery store. The reservation covers 875 square miles in Cibola, Sandoval, Valencia, and Bernalillo counties and includes six villages, but currently there is no modern, full-service grocery store within 30 miles in either direction on Interstate Highway 40. The new store will replace the community’s only grocery, an outdated, 30-year-old store that is structurally unsound. The new store will offer healthy foods and have additional freezer and storage capacity, a deli, bakery, and other amenities, plus a small Ace Hardware store, thus bringing much benefit to pueblo members and the surrounding low-income communities. This redevelopment will retain 30 full-time jobs, of which 63 percent are to be filled by pueblo members and 76 percent by Native Americans.

Two additional and complementary NMTC investments, in which USBCDC committed a total of $8.3 million of NMTC equity, are helping to finance the multimillion-dollar exploration, drilling, and construction of a new water and waste system located on the east side of the pueblo near pueblo-owned commercial properties. The new water supply, part of an aggressive economic development plan to create new jobs on the pueblo, will expand water availability and quality, address serious health concerns, provide improved fire protection, and allow the pueblo to attract additional commercial development.

By utilizing the NMTC Program and leveraging its available resources, Pueblo of Laguna has gained access to critically needed capital so that it can focus more of its efforts on its vision of preserving the pueblo’s beliefs and ensuring a vibrant future woven with the threads of love, respect, and self-discipline.

Programming and Services: Nebraska and New Mexico

At U.S. Bank, we believe in investing in education. Providing opportunities for children and adults to learn and apply the skills necessary to create brighter futures fosters communities that are progressive and self-sufficient, and we are committed to supporting our communities by empowering individuals and small businesses through financial education.

In 2012, we hosted small business boot camps in the Nebraska towns of Lawrence, Omaha, and Lincoln. The workshops featured Native American national speaker and author Dr. Beverly Browning.

We also worked with the Ponca Tribe of Nebraska to offer the Northern Ponca Housing Authority (NPHA) mortgage program in a focused area that represents the original Ponca homeland, which consists of the eastern half of Nebraska and part of Iowa. NPHA low-income housing programs range from down-payment assistance to help with HUD Section 184 mortgage applications. Mortgages have been successfully closed for Ponca tribe members residing off tribal lands in Lincoln, Omaha, and Norfolk, Neb.

In New Mexico, our partnership with the New Mexico Tribal Homeownership Coalition supports homeownership initiatives. The coalition consists of professionals dedicated to increasing housing opportunities for tribal members through advocacy, technical and financial assistance, and implementation of housing programs. All coalition members are volunteers, and their mission is one our staff has been committed to for more than 15 years. Collectively, the coalition is a resource for tribes interested in developing homeownership programs on their reservations.


The moral of the story: Offer good products and services to your diverse individual and business customers and help them achieve their goals. Work through any challenges or perceived obstacles and build strong relationships. There are many lending and investment opportunities with Native American individuals, small businesses, and tribal entities. Indian Country is open for business.

Melissa Borino, Senior Vice President, Community Affairs, can be reached at Visit U.S. Bancorp on the Web 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.

SBA 7(a) Loan Program

Lenders interested in doing business in Indian Country may want to consider the 7(a) Loan Program from the U.S. Small Business Administration (SBA). Designed to encourage longer-term small business financing, this program can be used for real estate, equipment, or working capital loans. The loan proceeds may also be used to establish a new business or to assist in the acquisition, operation, or expansion of an existing business. The specific terms of SBA loans are negotiated between a borrower and an SBA-approved lender. In general, the following provisions apply to all SBA 7(a) loans:

  • As a business, the borrower must be engaged in an activity that the SBA determines to be acceptable for financial assistance from a federal provider. There is a long list of prohibited activities, including deriving more than one-third of gross annual revenue from legal gambling activities.
  • The 7(a) program sets a maximum loan amount of $5 million. The SBA does not set a minimum loan amount. The average 7(a) loan amount in fiscal year 2012 was $337,730.
  • Loans guaranteed by the SBA are assessed a guarantee fee. This fee is based on the loan’s maturity and the dollar amount guaranteed, not the total loan amount.
  • The SBA can guarantee as much as 85 percent on loans of up to $150,000 and 75 percent on loans of more than $150,000. The SBA’s maximum exposure is $1.5 million. SBA Express loans have a maximum guarantee of 50 percent.
  • The SBA offers several special purpose 7(a) loans to aid specific types of businesses, including the following:
    • CAPLines program: This program is designed to help small businesses meet short-term and cyclical working capital needs.
    • SBA export loan programs: These programs are specifically designed to help develop or expand export activities.
    • Rural business loans: The Small/Rural Lender Advantage initiative is designed to accommodate the unique loan-processing needs of small community and rural-based lenders.
    • Patriot Express: This loan initiative allows lenders with Patriot Express authority to make loans to eligible veterans and members of the military community who want to establish or expand a small business.

For more information on the 7(a) Loan Program, please refer to the program’s Website.

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.