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Native American banking and why it matters

how Better Banking can help lessen racial economic inequality

We’ve already written an article about the importance of Minority Depository Institutions. But why do specific ethnic groups have specific needs when it comes to banking? The short answer is, essentially, because institutionalized racism prevented these groups from participating in the traditional banking industry, and they were forced to open their own banks and credit unions to provide for the banking needs in their communities. They’re still around today because many ethnic groups face distinct economic challenges that the typical bank is unprepared to handle.

Existing Native American cultures around the United States struggle with many circumstances caused by years of exclusion and isolation. American Indians were driven out of the land they’d been living in for generations and were relegated to the most unsuitable land available. For example, Native people in the eastern and southern states were forced primarily into Oklahoma. Even after deeming the territory “Indian Country,” and saying that it would be reserved for Native peoples, as more settlers came to the country over time, the land was slowly parceled out.

More than simply taking their land, white settlers forced Native Americans to assimilate to American culture or be trapped in reservations where there were few opportunities or resources. This caused a huge economic disparity between Native Americans compared to other racial groups: the poverty rate for Native Americans in the 2018 census was at 25.4%, with the African American poverty rate at 20.8% and the white poverty rate at only 8.1%. Native Americans, on average, also make a lower median income, have higher rates of unemployment and lower rates of educational achievement. While seven of every 10 Native Americans live in urban areas, those who still live on reservations face even higher rates of poverty and unemployment.

Even though the Native American demographic is very diverse in regard to background and circumstances, racial economic inequality is consistent. Native American banks and credit unions specifically address these inequalities and provide loans which help lift people out of poverty. While some lend directly to tribes and reservations, others seek to provide services which uplift the Native American community as a whole. Many Native peoples, especially those on reservations, are unbanked or underbanked, meaning they don’t have access to essential banking services. Native banks allow this highly neglected demographic to have a depository and lending institution which they can trust.

Moving your money to a Native American bank or credit union can be a fantastic way for anyone to contribute to the economic wellbeing of Native communities. For lists of financial institutions whose membership or ownership are majority Native, check out the OCC’s website and Partnership for Progress’ site. The Federal Reserve Bank of Minneapolis also has a map of all Native American Financial Institutions. Here’s an article we wrote about Native American Bank, which is the largest Native banking institution in the U.S. If you’re looking to undo a little of the damage done to Native peoples and cultures, move your money to one of these banks today!


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