Native Americans are the most likely group to be unbanked in the U.S., according to a Federal Deposit Insurance Corporation (FDIC) survey, and many lack access to banking services and ATMs. Native American-owned banks and credit unions help address this issue by providing financial services to Native American communities.
While anyone can bank with a Native American bank or credit union, these institutions aim to serve and empower Native American individuals. To qualify as a Native American bank or credit union, these institutions must either be majority-owned by Native Americans or have a board of directors that’s majority Native American.
What Is a Native American Bank or Credit Union?
A Native American bank or credit union is a type of minority depository institution (MDI) that’s majority-owned by Native Americans or has a board of directors that’s majority Native American. These banks and credit unions also primarily serve Native American communities and seek to provide their customers with affordable and accessible banking services and products.
As MDIs, Native American banks receive assistance from the government to operate, particularly technical and management assistance. Banks are for-profit institutions, whereas credit unions are member-owned organizations.
Why These Institutions Are Important
Native American-owned banks help equip American Indian and Alaska Native communities with financial education and empowerment. As mentioned, Native Americans are the most likely group to be unbanked, meaning it’s difficult for many people and businesses to access checking and savings accounts, loans, mortgages, credit cards, and other financial services. Online banking isn’t necessarily a solution, since not all tribal residents have access to broadband.
Lack of access to banking also impacts people’s credit scores. A poor or nonexistent credit score makes it even harder to access affordable loans. Native American banks and credit unions can help combat these problems and connect people with affordable products and the opportunity to build their creditworthiness.
Minority Depository Institutions (MDIs)
Native American-owned banks and credit unions are a type of MDI, which are institutions that are majority-owned or governed by people of color. MDIs came into being with the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
To be designated as an MDI, the bank must have more than half of its voting stock owned by minority individuals (Black, Native American, Hispanic American, or Asian American individuals). Alternatively, it must have a Board of Directors where the majority of people are minority individuals and predominantly serve minority communities.
Federally designated MDIs receive government assistance, such as technical, training, and education programs, and preservation of minority ownership in the case of a merger or acquisition.
Community Development Financial Institutions (CDFIs)
Similar to MDIs, community development financial institutions (CDFIs) have a mission to support economically disenfranchised communities. They support community development by providing financial services, loans, investments, training programs, minority-owned businesses, and other development efforts.
Along with providing banking services to underserved communities, CDFIs often run microloan programs to help small business owners launch and grow businesses. They may also provide small business grants for minorities or fund affordable housing and community facilities.
Active Native American-owned Banks and Credit Unions
The FDIC maintains a list of Minority Depository Institutions. Here are some of the active banks that are Native American or Alaskan Native American owned.
The National Credit Union Administration (NCUA) maintains a list of credit union MDIs. Here are some of the Native American credit unions active today, including their state, total, assets, and total members.
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Supporting Your Local Financial Institutions
Anyone can bank with a Native American-owned bank or other MDI. These institutions are committed to supporting communities that have historically been excluded from mainstream banking services.
By banking with an MDI, you can help support its mission and community. Keep in mind, though, the differences between banks vs. credit unions. While almost anyone can open an account with a bank, credit unions have specific membership requirements. You might need to live in a certain area or work for an eligible employer to join.
The Takeaway
Native American-owned banks and credit unions serve traditionally underbanked communities and help equip people with financial self-sufficiency. While these banks primarily serve indigenous communities, anyone can join these or other minority-serving institutions to support their mission.
This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
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7 brilliant ways to avoid high bank fees
Have you ever heard the old saying, “Penny wise and pound foolish”?
It’s a little knock at folks who tend to be frugal about small expenditures but not so cautious when they’re buying the big stuff. (The person who uses coupons to purchase toilet paper, for example, but doesn’t negotiate a better price for an expensive new car.)
We all like to think we’re using our money efficiently, but it can be easy to miss out on chances to save. That’s especially true when costs are automatic and virtually invisible (or, at least buried in the fine print), like the maintenance fees some banks charge for their checking accounts.
Customers tend to think of them as the price of doing business. After all, it can be tough to function in today’s world without some kind of cash management account where you can deposit, hold and withdraw money.
But those fees can eat away at the money you’ve worked hard to earn. And according to the most recent Moneyrates.com survey, monthly maintenance fees continue to rise, and now add up to an average $162.96 per year.
The good news is there are ways to avoid account maintenance fees without going back to the good old days of shoving money under the mattress. This list is in no way comprehensive of all the options out there, but here are a few possible ways to avoid potential fees.
Related: Comparing the different types of deposit accounts
This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
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Because online financial institutions don’t have brick-and-mortar branches, tellers or other overhead costs, they tend to pass those savings on to their customers. That typically means better interest rates for savings, but also low or no fees on account balances.
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If you aren’t ready for online banking — or you want to keep at least some money in a traditional financial institution — there are still ways to possibly duck that monthly maintenance charge.
Fees and rules vary from bank to bank, and from account type to account type, but generally you can avoid the cost if you keep your balance over a certain threshold. If your balance drops below that amount, your bank statement will show you were charged for the month.
Banks measure and enforce the minimum balance in different ways, and there can be more than one minimum balance for the same account. (One amount might be required to keep an account open, for instance, while a higher balance could be required to qualify for fee waivers or interest payments on deposits.)
So be sure you understand the requirements for your specific type of account. You can usually find that information on the financial institution’s website, but if you can’t, call customer service for a jargon-free rundown. And you could also ask that you receive an email or text if your balance drops below the minimum.
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Banks may waive the maintenance charge for those who have funds electronically transferred into an account.
You can check your bank’s website to see if this is their policy. It may be possible to have paychecks, tax refund, Social Security checks and other payments delivered this way.
There may be a monthly minimum set for this amount, as well, so ask about that — and how the minimum applies if you split the direct deposit among two or more accounts.
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If your bank is looking for a total customer relationship, it may offer free services for those who use more than one of their services (such as a savings account, certificate of deposit, or IRA).
Just be sure to do some research and crunch the numbers before you put all your money in one place. Another institution may have a better rate on CDs, or offer better investment services, etc.
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You may qualify for a lower fee (or no fee) if you’re a veteran, a senior, disabled, or a student. It can’t hurt to ask — and be prepared to show some paperwork. You also might be able to get a discount if you ask your bank to stop sending you monthly statements in the mail.
The incentives for going paperless aren’t always about money — and your bank may try to convince you that it’s more about cutting clutter and saving the planet. But paperless is a source of savings for them, and it might mean savings for you, too.
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Maybe you chose your bank years ago based on location, reputation, or a friend’s recommendation. But if you’re paying for services that are free elsewhere, it might be time to consider a breakup.
Before you go, you may want to talk to someone in charge about why you’re leaving, and see if you can negotiate terms you feel better about. If that isn’t possible, take the time to research your next move.
Will you be comfortable with a change? You could check out what other customers are saying in online reviews, and look at the website to be sure there aren’t any surprise fees with your new account. Consider whether online banking is a fit for you as you go forward.
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If you aren’t sure what kind of fees you’re paying month to month, you might want to start taking a closer look at your statements. You may find you’re being incorrectly charged — or that you’re making mistakes yourself that are costing you more money than you’re saving.
Learn more:
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SoFi Money is a cash management account, which is a brokerage product, offered by SoFi Securities LLC, member FINRA/SIPC. Neither SoFi nor its affiliates is a bank.
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