Magazine article American Banker

Western Bankers Pledge to Improve Credit Access on Indian Reservation

Magazine article American Banker

Western Bankers Pledge to Improve Credit Access on Indian Reservation

Article excerpt

Several western bankers have pledged to improve the access of Navajo Indian Reservation residents to financial services, particularly home loans.

Representatives of banks, the Federal Home Loan Bank System, the Navajo Nation, and nonprofit organizations agreed to take 50 steps in the next year to help Navajos get credit. At a meeting held Sunday in Aneth, Utah, they also pledged to finance at least as many homes as there were people in attendance: 52.

Such meager ambitions underscore the administrative as well as economic obstacles to community banking on Indian reservations, which are treated as sovereign countries.

"There's a double dimension to this," said Stephen M. Studdert, chairman of a Salt Lake City-based housing committee of the Federal Home Loan Bank of Seattle, which organized the meeting as a follow- up to a June 1994 forum.

"One, there's an extraordinary need, and secondly, there's a very large and completely untapped market for housing finance providers."

The Navajos, the country's largest tribe, live in Arizona, New Mexico, and Utah, and face hardships common to most reservations. About 14,000 Navajo families are homeless, Mr. Studdert said, and half of Navajo homes do not have electricity; 70% of the homes lack running water.

Although lenders face several challenges in lending to reservation residents, "None of them are insurmountable," said Harris H. Simmons, president and chief executive of Salt Lake City- based Zions First National Bank. "They just take time to learn and to become comfortable with. …

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