In addition to traditional banks and credit unions, a robust CDFI ecosystem can also be a lifeline to support credit access in underserved communities. Between 2001 and 2021, the number of Native CDFIs increased fivefold from just 14 to 71 in the U.S.33 While Native CDFI loans tend to be small—the average loan size was just $16,000 in 2017—they fill a critical gap, especially for those who have thin credit profiles or have poor credit profiles.34 Moreover, CDFIs can help improve clients' credit and boost their financial access.
Native CDFIs in Oklahoma have been highly successful in providing financial access to Native Americans, supporting mortgage lending, small business growth, and economic activity more broadly. Despite the challenges presented by the pandemic, Native CDFIs across the country avoided the increases in delinquencies and charge offs that were anticipated early on, and only a few have had to restructure their organization's corporate debt as a result of COVID-19 so far, highlighting the quality of Native CDFI investments.35
The Federal Reserve Bank of Kansas City (FRB Kansas City) Community Development department supports Native CDFIs and Native MDIs in a number of ways with a focus on convening, facilitation, and resource development.36 For example, staff support state-wide CDFI working groups in Oklahoma and New Mexico, which both have significant representation of Native CDFIs. Further, through its flagship program, Investment Connection, FRB Kansas City links banks with CRA-eligible activities. Since its creation in 2011, Investment Connection has enabled $50 million in loans and grants to be connected with community organizations.37 These funds have supported work in affordable housing, small business development, and workforce development, among other areas. Several organizations working in Indian Country have been able to make successful, CRA-eligible connections through FRB Kansas City's Investment Connection, including an Oklahoma based Native American CDFI. The Federal Reserve System will continue to be a resource to provide information and best practices for CDFIs as more tribes seek information about establishing their own financial institution.
Economic Education
The Economic Education team at the Federal Reserve Bank of St. Louis with support from the Atlanta and Kansas City Reserve Banks has been committed to providing tribal nations and Native communities in Oklahoma and across the country with personal finance and economic education programming. Understanding the diversity of Native languages and cultures, the programming offers the flexibility to adapt to local needs. This work, led by Megan Cruz, a citizen of the Osage Nation, who is here today, brings financial education to tribal programs spanning all ages—including early childhood learning, youth programs, housing, reservation schools, higher education, workforce development, children and family services, and elder programs.38
Center for Indian Country Development
A pervasive lack of data makes it difficult to evaluate how economic developments are impacting Indian Country. The limitations of the data available on Indian Country are due to data collection and reporting issues, such as small sample size or large margins of error.39 At the Federal Reserve Bank of Minneapolis, the Center for Indian Country Development collects data and conducts economic research and analysis to help resolve the critical need for accurate and timely data. One of the steps they have taken includes publishing a labor market data tool, which presents estimates of the labor force participation rate, employment-to-population ratio, and unemployment rate for the AI/AN population in the U.S.40
The Center for Indian Country Development also focuses on applied research and engagement in Indian Country to support long term economic prosperity and inclusion. Recent research has centered on the role tribal enterprises play in economic opportunity and how tax revenues in Indian Country can help improve the economic infrastructure and financial inclusion for tribal communities. Through policy webinars and its upcoming inaugural research summit, the Center is working alongside tribal leaders to leverage data and research to improve the economic well-being of Indian Country.
The Reserve Banks play a unique and important role in increasing our understanding of local needs and regional issues, and in the Federal Reserve Districts with large Native American populations and stakeholders, our Banks are very engaged with Indian Country activities. We welcome the diverse perspectives of Native Americans, from serving on our boards and advisory councils to joining us as full-time employees, to better inform our decisionmaking. Tawney Brunsch, the CEO of Lakota Funds, a Native CDFI, is the current Vice Chair of the Board's Community Advisory Council, which offers diverse perspectives on the financial services needs of communities, with a focus on lower- to moderate-income neighborhoods.41
Earlier today, the Federal Reserve announced we had joined the Central Bank Network for Indigenous Inclusion (Network) alongside the Reserve Bank of New Zealand/Te Pūtea Matua, the Bank of Canada, and the Reserve Bank of Australia. The mission of the Network is to foster ongoing dialogue and raise awareness of Indigenous economic and financial issues, share knowledge and best practices, and promote engagement and education on Indigenous economy and history, in partnership with Indigenous Peoples. It is a welcome opportunity for us to better understand how each central bank is working to improve financial inclusion for and with Indigenous Peoples. We look forward to learning from our Indigenous partners and central bank members in the Network.