The Johnny Appleseed Approach to Seed More Native Credit Unions

Mark Fogarty

Seneca tribal member Stephen Scott would like to become a modern-day Johnny Appleseed. And the seeds he would like to sow to help American Indians get better access to finance are tribal credit unions.

Scott spent the past three years working successfully on getting a credit union chartered for the Seneca Nation of Indians, and when it opens in August, he will have two Native CUs to his credit -- he helped develop LCO, in Heyward, Wis., for the Lac Courte Oreilles tribe. And he’s offering his experience as a consultant to other tribes that want to increase credit access for their members.

Scott, acting deputy director for planning and development for the New York tribe, sees a natural connection between a credit union’s cooperative organization (CUs are owned by their members) and tribes’ cooperative natures. “I think they work hand in hand,” he told ICTMN. “Their motto is people helping people, and that’s what tribal nations do — they help each other,” he said.

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, N.Y. and about a half dozen employees. “We want to make sure we employ Seneca people who qualify,” he said. “There’s a lot of [Seneca] who remain unbanked, and don’t really have access to credit,” he said. “Having our own financial institution will allow that.”

Initial product offerings will include deposit accounts (called “share” accounts by credit unions), 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 like mortgages once the credit union establishes itself. The Nation already has a proprietary mortgage program, and he sees a natural fit there by offering second mortgages (home equity loans) that could be used to rehab existing houses. 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.

RELATED: Half of Native Mortgage Applicants Were Denied in 2013

Scott will have plenty of opportunity to be the Johnny Appleseed for CUs, as the number of Indian-controlled credit unions remains quite low. Just how few of them there are can be seen 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 two per cent 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, according to OMWI.

The smallest, Rabun-Tallulah of Tiger, Ga., has just $600,000 in assets and less than two hundred members. Some of the larger ones 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.

These 13 don’t comprise the entire universe of what might be considered Native credit unions. 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.


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bullbear's picture
Submitted by bullbear on
Well Mr. Appleseed, I can that by establishing a credit union on the reservation, it is one means by which to keep the dollar on the reservation a bit longer. But the fact is, dollars spent via debit or credit cards in the nearest border town, does not allow those dollars to circulate on the reservations very long. If this is the case, it would seem that mortgage loans issued by these rez credit unions has the potential for a much greater economic impact. However, where are these houses up for sale on the rez? As I recall, most homes are federally-funded and applicants must qualify by income in order to be eligible for one of these. Pardon me for saying so, Mr. Appleseed, but we are talking about putting the cart before the horse here. Jobs are needed more than a credit union. The "members," for the readerships information, are those individuals who enroll in a credit union that have a commonality such teachers or military. Banks frown upon credit unions because they offer loans at lower interest rates. In that sense, I can see, maybe, getting a car loan from a rez credit union. Is Indian country ready for rez credit unions? My senses tell me that their establishment will continue to be very slow at best. This is not to take anything away from the Appleseeds, but we are still years away from seeing the doggone recession beaten back. I sure hope I am wrong on this one.