The terrible price that indigenous populations bear when banking services are unavailable

 The terrible price that indigenous populations bear when banking services are unavailable

In brief

The purpose of the Community Reinvestment Act of 1977 was to stop banks from purposefully excluding low-income, minority, and immigrant neighborhoods from financial services—a practice known as "redlining." Native land areas will be explicitly included in new CRA guidelines for the first time in late 2023. In an effort to create a more fair financial services environment in Indian Country, this report establishes a baseline for assessing the availability of capital to native communities.

Rather than adhering strictly to the legal meaning of "redlining," we have chosen to use the word historically in this study. Redlining, as used here, refers to the practice of rejecting home loans in certain areas to applicants with good credit, regardless of their qualifications. This use addresses redlining's wider historical ramifications, including not only racial discrimination but also its effects on tribal territory and other elements.

important conclusions:

Due to the severe shortcomings of conventional mortgage lending, loan money must go via financial organizations headed by Native Americans who are knowledgeable about the topography, culture, and administrative challenges of tribal territories. Federally insured mortgages are not issued by any of the three biggest US home lenders for the purpose of building new, permanent residences on tribal territories. The little credit that is offered encourages the growth of wealth in a manner that allows funding to be routed via indigenous community development finance institutions (CDFIs), which are often found in tribal communities with little access to capital. One area of special attention is dealing with shortages.

Manufactured mobile homes account for half of all house purchase loans on tribal grounds; this is four times more than elsewhere. When Native Americans are able to get a mortgage, they often use the money to buy a house that will lose value over time rather than fostering the accumulation of wealth for future generations.

The billionaire financier Warren Buffett's businesses have a stranglehold on manufactured house loans in our research region, and he is nearly completely the beneficiary of the money that has been siphoned from already impoverished local communities via expensive loans on low-value dwellings. As.

Native American communities in Arizona and New Mexico were deprived of economic opportunities as small enterprises in those states got less than one penny for every dollar allocated to tribal territory. Just 0.004% of small company loans in Arizona and 0.012% in New Mexico between 2018 and 2021 went to borrowers on tribal grounds. While non-tribal regions obtained an average of 82 small business loans, the typical census tract on tribal territories received just five.

Compared to other rural regions, tribal communities have much higher financial demands. The financial requirements in tribal territories are considerable. The Financial Need Index shows that access to services is severely lacking in tribal communities, indicating that inhabitants of Arizona and New Mexico who live on tribal grounds are not receiving the same level of care as other citizens.