Collaborating with Tribes through the White House Rural Council

On June 9^th, President Obama signed an Executive Order establishing the first White House Rural Council. While rural communities face challenges, they also present economic potential. The Council will address these challenges, build on the Administration’s rural economic strategy, and improve the implementation of that strategy.

The Council, chaired by Secretary of Agriculture Tom Vilsack, was established to focus on policy initiatives for Rural Americans and will coordinate to increase the effectiveness of federal engagement with tribal governments. According to the 2010 U.S. Decennial Census, 42.6 percent of all Native Americans live in rural areas. In addition, some reservations face unemployment rates of up to 80 percent. The Council will work across federal agencies to address these challenges and promote economic prosperity and quality of life in Indian Country and across rural America. The Council will work to break down silos and find areas for better collaboration and improved flexibility in government programs and will work closely with state, local and tribal governments, non-profits, and the private sector to leverage federal support.

Plans are already underway for the Council to address ways to expand access to capital in rural communities, including an examination of the unique challenges facing Indian Country in increasing the flow of credit to Indian reservations. Economic development and job creation in Indian Country—and in all other sectors of the U.S. economy—depend on access to capital. When credit-worthy business owners can easily borrow to finance business start-up and expansion, the economy thrives. One thing we hear from tribal leaders, however, is that borrowing money for business development in Indian Country is difficult. The reasons range from difficulties in using tribal land as collateral, to the small number of lending institutions serving Indian Country, to lenders’ perceptions that lending to tribal members or tribal governments is risky.

Much of tribally-owned and individual Indian-owned land is held in trust by the United States, which essentially means it cannot be sold outside the tribe to cover lender costs should a borrower be unable to repay a loan. While trust status preserves a tribal land base it makes the processes for using land as collateral more complex in Indian Country than it is in non-tribal communities. With relatively few lending institutions serving tribal communities, it is more difficult for lenders and Indian Country borrowers to gain experience with extending and gaining credit. Financing options for tribes and their members then are limited by a lack of financial expertise, credit, and financial resources sufficient to support business dealings – and few supportive mechanisms exist through which they might develop expertise. Moreover, lenders are reluctant to enter into financing agreements with tribes and tribal corporations because of both real and perceived concerns over the status of Indian tribes as governments.

The Council’s efforts will build upon this Administration’s strong commitment to Indian Country. One key illustration of the work that’s already underway to expand and enhance engagement with tribes took place this week, as the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) held the first in a series of workshops to promote economic development in Native American communities. Titled Growing Economies in Indian Country: Taking Stock of Progress and Partnership, the CDFI Fund has partnered with the Federal Reserve system and federal agencies to conduct 6 Economic Development Workshop in Indian Country. Workshop participants were encouraged to:

• Share their views and identify existing challenges to economic development in Indian Country
• Identify best practices and solutions that address these challenges
• Discuss and learn about federal and regional Native economic development initiatives and programs that are aimed at providing assistance to tribal governments and tribal and independent businesses.

Tribes must be the driving force behind federal policies targeted toward job creation and economic development in Indian Country, which is consistent with the policy of Indian self-determination. In addition to working with policy experts across federal agencies, the Council will seek guidance from tribal leaders and experts in Native American economic development. In terms of rural capital access, the Harvard Project on American Indian Economic Development suggests that valuable lessons can be learned from Indian Country by studying examples like the Citizen Potawatomi Community Development Corporation which stimulates small business growth and spurs entrepreneurship and Ho-Chunk Inc. which developed a non-profit corporation to provide supplemental capital to individuals and businesses. Harvard Project staff also point to tribally owned banks--like Bay Bank, owned by the Oneida Tribe of Wisconsin, which serves both Indians and non-Indians alike--as important vehicles for investment in rural communities.

This focus on access to capital is just one example of the kinds of opportunities provided by the White House Rural Council to collaborate with tribal leaders and develop policy recommendations on issues impacting Indian Country.

For more information, please visit our new page dedicated to the Native American community.