URL: https://www.indianz.com/News/archives/002404.asp

Thursday, November 6, 2003

Banks and financial institutions are missing out on an undertapped market, a Navajo Nation leader said on Wednesday.

More than 500,000 Native Americans on reservations need basic banking services, Chester Carl, head of the Navajo Housing Authority, said. He spoke at a forum in Washington, D.C., designed to highlight underserved markets throughout the country.

On the Navajo Nation, which covers three states and is the size of West Virginia, Carl said the problem is particularly acute. The tribe has resorted to lawsuits to force banks to come to the reservation.

"Four banks serving thousands of people in an area that is about 25,000 square miles?" he said at the National Press Club. "It's hard to believe, isn't it?"

The lack of financial services forces tribal members to submit to "predatory" business practices, Carl said. He described cases of elders with Social Security checks being turned away by banks. "The difficulty in accessing banks that are too far away forces them to pay exorbitant fees from their already meager income to unscrupulous payday lenders," he said.

But with just some basic steps, banks and financial institutions can improve the situation in Indian Country, he said. Developing partnerships with tribes and setting up small, mobile branches in grocery stores were just some of the

"There are banks with drive-up windows, ATMS, even banks with extended hours," Carl said. "Going without these basic services is a sad way of life and it further depresses the economic hopes of Native Americans."

Carl and other speakers at the forum, arranged by the National Community Reinvestment Coalition (NCRC), also called on the federal regulators to increase its oversight of the industry. "The FDIC is failing to enforce the nation's fair lending laws and is not protecting the safety and soundness of the banking industry," said NCRC President John Taylor.

According to a May 2002 report from the Center for Community Change, Native American homeowners pay higher loan rates than their White counterparts. African-American and Hispanic homeowners were also subject to "subprime," or high interest lending.

Housing is a particular concern for Carl, who is a regional representative of the Native American Indian Housing Council (NAIHC). Carl said a joint NAIHC-NCRC survey of tribal leaders found that 70 percent believed predatory lending was a problem. Individual Indians and tribes are hurt by the lack of financial services, he said.

According to the NCRC, 12 million Americans are "unbanked." Taylor cited a survey from the Federal Reserve which found that 59 percent of families without checking accounts had incomes within the lowest fifth of all family incomes during 2001. He said 57 percent of those without checking accounts were minorities.

Relevant Links:
Native American Indian Housing Council - http://naihc.net/index.asp
National Community Reinvestment Coalition - http://www.ncrc.org

Related Stories:
Study highlights Native economic power (08/19)
Study documents disparity in Native lending (05/02)
Report tackles economic development (2/8)
Report: Native buying power increases (9/8)

All stories in the Indianz.Com Archive are available for publishing under a Creative Commons License: Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)