Native Americans and banking access: What journalists should know
By Molly McCluskey
One-third of Native community members have encountered bias and/or exclusion from the financial services sector while seeking services related to banking, lending, saving, credit, financial planning and more. That’s double that of the general U.S. adult population.
This is according to a poll by the National Endowment for Financial Education published in November 2023, which surveyed 750 adult Indigenous Americans from across the United States, who identified as American Indian, Alaskan Native, Native Hawaiian or Other Pacific Islander.
Additionally, 17% of respondents said neither they nor anyone in their household own a bank account, which is nearly quadruple the national estimate of 4.5% of households, according to the FDIC.
To understand how these figures affect the real customers involved, we spoke to officials from Tongass Federal Credit Union, a small, local non-profit organization in Alaska. Tongass FCU is the sole banking option in several predominantly Native Alaskan areas, including on Metlakatla, the only Indian Reserve in the State of Alaska, accessible only by seaplane, boat or ferry. They’re part of a newly formed Native American Credit Union Coalition, which is advocating to expand non-profit credit union service, rather than traditional for-profit banks, into more tribal lands.
“It's just the things that I see from a small credit union perspective is I see a lot of is banks like Wells Fargo throwing money at Indian country,” said Helen Mickel, the president and CEO of Tongass. “I know that Wells Fargo, what they're interested in is the big money in Indian country. They're interested in the casinos and the money. And so they're taking care of the money and the people are not getting taken care of.”
In 2019, Wells Fargo settled a lawsuit with the Navajo Nation for “predatory and unlawful” practices against the Navajo people. The bank agreed to pay $6.5 million.
As the Navajo Times reported, “The Navajo Nation and its members entrusted Wells Fargo with their finances and personal information,” stated the complaint. “In return, Wells Fargo preyed on members of the Navajo Nation, including Navajo elders, who are some of the Navajo Nation’s most vulnerable citizens.”
Overall, the bank now owes billions of dollars in lawsuits while also touting its significantly smaller investments in Native communities nationwide.
There are several communities, particularly in Alaska, where Wells Fargo is the only bank. When the bank closes its branch, it can have a devastating impact on the community. Tongass has opened microbranches in several of these areas.
Denise Hudson is Tongass’ associate vice president and manages the Tongass’ Metlakatla services. One of her first tasks was to help customers who had never had a bank account meet an immediate need: begin building a credit history. She did this through micro, credit-building loans, sometimes for as little as $500, and secured credit cards. It’s the sort of labor-intensive banking product that doesn’t yield a large financial return but can have a tremendous impact on the community.
Hudson advises that any journalist covering banking in tribal areas start by looking at the products and services being offered to individual customers, and the threshold for accessing those accounts.
“I think digging into like credit builder loans, digging into financial education that's being offered by a local institution,” Hudson says.” What does it take to open up a savings account at that bank? It's five bucks at Tongass, with no fees.”
“Ask whether they’re serving the actual people living in that area,” Hudson says. “They're not. I mean, most of the time they're not.”
Native-owned banks and credit unions are recognized as minority depository institutions (MDI). According to the National Credit Union Association, there are currently 45 banks and credit unions either partially or fully owned by Native Americans.
Journalists seeking to report on tribal finance should reach out to the Native American Financial Services Association, which has issued a number of reports and white pages on the history and current status of financial services on tribal lands. Reporting on this topic could include whether a local bank is fully serving the needs of its local Native American customers, any hidden fees, complaints, or lawsuits; if a bank serving a large tribal entity like a casino or resort is also meeting the needs of its individual customers, and which tribal areas are currently underserved and/or unbanked.
Additional Resources
- NerdWallet: Native American-Owned Banks, Credit Unions
- CNN: Native American populations are ‘invisible’ to banks. That needs to change
Molly McCluskey is an award-winning journalist who has written for The Atlantic, The Washington Post, Rolling Stone, New York Magazine, National Geographic and more. View her work and get in touch via mollyemccluskey.com.
Finance 411 is a bi-monthly feature, presented by RTDNA and the National Endowment for Financial Education.