IRVING, N.Y.–Stephen Scott wants to become an evangelizer for credit unions, and the groups he would like to preach the cooperative word to are American Indian tribes in need of better access to finance.
Scott has spent the past three years working successfully on getting a credit union chartered for the New York-based Seneca Nation of Indians, and when it opens in August he will have two Native CUs to his credit. (He also helped develop LCO, in Heyward, Wis., for the Lac Courte Oreilles tribe.) He is now offering his experience as a consultant to other tribes that want to increase credit access for their members.
Scott, a Seneca member and acting deputy director for planning and development for the New York tribe, sees a natural connection between a credit union’s cooperative organization and tribes’ cooperative natures.
“I think they work hand in hand,” he said. “Their motto is people helping people, and that’s what tribal nations do—they help each other,” he said.
Plans to Open in August
The Seneca tribe remains on track for an August opening, and Scott’s hopes for it are high. Three-year financial arrangements have just been approved by the tribe, and he thinks the financial institution has the potential to grow even faster than current projections.
“We could grow to the point we have our own buildings,” he said.
Opening plans call for three branches in space provided by the tribe in Irving, Salamanca and Niagara Falls, NY and about a half-dozen employees. “We want to make sure we employ Seneca people who qualify,” he said.
Initial product offerings will include share accounts, checking, secured and unsecured loans, new and used car loans, debit cards, money orders and bill payments. Scott would like to see more sophisticated products such as mortgages once the credit union establishes itself. The Nation already has a proprietary mortgage program, and he sees a natural fit there by offering home equity loans that could be used to rehab existing houses.
“There are a lot of (Seneca) who remain unbanked and don’t really have access to credit,” explained Scott. “Having our own financial institution will allow that.”
The credit union will not offer business loans at first, but Scott noted the tribe has a business called Snidec that does, up to a maximum of $250,000.
Low Number of Similar Charters
Scott will have plenty of opportunity to spread that cooperative word, as the number of Indian-controlled credit unions remains quite low. There have been just a handful chartered in recent years, including:
* Northern Eagle FCU, Nett Lake, Mich., which was chartered in 2013 to serve the 4900 Bois Forte Band of Chippewa members and employees.
* Chippewa Eagle FCU, Mount Pleasant, Mich., which was chartered in 2010 and opened in 2011, to serve up to 7,800 members and employees of the Saginaw Chippewa Indian Tribe.
* Lakota Federal Credit Union, Kyle, S.D., which was established in 2012. LFCU provides consumer and second mortgage loan products, checking and savings accounts, and technical assistance to tribal members of the Pine Ridge Reservation of the Lakota tribe in South Dakota. It was sponsored by the non-profit Lakota Funds, a long-established micro-lender on Pine Ridge.
Just how few credit unions there are serving native Americans can be seen in data from the National Credit Union Administration’s Office of Minority and Women Inclusion. In its first report to Congress. OMWI found just 13 credit unions majority owned by Native Americans, about 2% of the total number of minority CUs and a tiny fraction of all credit unions.
These 13 are quite small, with total assets of $130 million and average assets of $10 million, serving 33,000 members. The smallest, Rabun-Tallulah of Tiger, Ga., has just $600,000 in assets and less than 200 members. Some of the larger CUs include Four Corners, Kirtland, N.M, with 4,700 members and $22 million in assets, and San Juan in Blanding, Utah, with 4,000 members and $16 million in assets. Four Corners serves employees of Navajo Agricultural Products Inc. and the Navajo Housing Authority.
A Larger Universe
These 13 don’t comprise the entire universe of what might be considered Native credit unions, however. For instance, in a throwback to ancient methodology, Native Hawaiians and Pacific Islanders are lumped into the “Asian” category. So, none of the minority credit unions in Hawaii is counted as being owned by Native Hawaiians. Interestingly, two Hawaiian credit unions are counted as being owned by Native Americans, and some that include employees in their FOMs that could well have a majority of shares owned by non-Natives.
Seneca Nation of Indians Federal Credit Union will serve employees and members of the Seneca Nation of Indians as well as employees of several other organizations affiliated with the Nation, according to the federal credit union regulator.
The Seneca Nation Council and executives committed capital for the credit union, said NCUA. The tribe has a membership of more than 8,100 and it employs more than 5,000 people, making it, collectively, one of the largest employers in western New York.
Other CUs Chartered by Tribes
Other credit unions chartered by tribal entities around the country include First American Credit Union, Window Rock, Ariz., (Navajo); South Metro Federal Credit Union, Prior Lake, Minn., (Shakopee Mdewakanton Dakota), and Hocak Federal Credit Union, Black River Falls, Wis. (HoChunk).
South Metro is open to many other groups besides the Shakopee Mdewakanton Dakota. Its FOM includes any person who lives, works or has a business in Scott County, Minnesota, any employee or member of a list of qualifying organizations, and anyone who makes a one-time $10 membership donation, according to the CU.
First American has the longest history, going back to 1962 when it was founded as Navajoland Credit Union. It has since expanded from serving Navajos to including all Indian tribes and ethnicities in its area and has passed $100 million in total assets. --Mark Fogarty