Capital, Inequality, and Self-Determination: Creating a Sovereign Financial System for Native American Nations


The existing financial system in the United States is not working for
Native Americans. The aggregate data on chronic Native American
poverty, unemployment, and lack of reservation business activity indicates
a substantial disconnect between tribal communities and traditional sources
of development capital such as banks, credit unions, and other commercial
lenders. Structural conditions in tribal communities do not embody the legal
elements or collateral base required by commercial banks to provide loans
and credit for Native American economic development. What tribal
communities need is a new financial system, built upon an understanding of
the unique economic and legal conditions of Native American nations, to
provide access to capital on terms that are structurally and culturally
consistent with the realities of Native American life.
This policy paper describes an innovative program to create a new
financial institution that can facilitate much-needed access to capital and
affordable financial services for Native American nations: the Tribally
Chartered Bank (TCB). The TCB would be a new banking system—rather
than a new bank under the existing system—that would be chartered under
tribal law and regulated by an independent tribally appointed governing
body. Organized under the sovereign authority of one or more tribal
governments and free from the short-term focus of publicly listed banks, the
TCB would offer a means for tribes to secure the “patient capital” required
for long-term economic and infrastructure development.1
The potential benefits of the TCB for Native American communities are substantial and far-reaching, including:
direct capital investment into reservation businesses, housing,
and infrastructure;

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