Special Edition 2012 - Native CDFIs in the Spotlight for Financial Literacy Month

President Obama last year proclaimed April as “Financial Literacy Month,” a time to highlight the importance of financial education for all Americans. For April 2012’s observance, First Nations Development Institute wants to spotlight some Native Community Development Financial Institutions (CDFIs) that are leaders in providing financial education and access to affordable credit.

Driven by the belief that all citizens should have the information they need to make informed choices – and be given access to affordable credit products that help them achieve financial stability – these reservation-based nonprofits are helping promote and build tribal economies while strengthening financial security for Native families.

Citizen Potawatomi Community Development Corporation serves the Citizen Potawatomi Nation and makes its loan products available to Indian people across the country. They offer credit counseling, financial education classes, and a range of community workshops, including “lunch-and-learn” sessions where people receive information on topics ranging from credit repair to saving for retirement. The staff at Citizen Potawatomi Community Development has observed that many different forms of predatory lending plague their clientele, and a large part of their work is providing credit counseling, debt-consolidation loans and credit-builder loans to help people slowly rebuild their credit. One of their most popular products is a short-term line of credit for tribal employees that helps them avoid the high fees and interest rates associated with payday loans. This product came about so that tribal employees can avoid predatory lending.

One employee described the problem with predatory lending this way: “It keeps people stuck in a destructive financial situation, which prohibits the establishment and building of good credit. It permits the creation of no banking relationships. It makes the financial burdens of members worse. Renewing loans goes on forever – five- to six-year-old loans are common and must be renewed because they can’t be paid off. It keeps the community financially dependent and illiterate, which does not encourage a sense of healthy community.”

The staff at Citizen Potawatomi Community Development continues to provide services and programs to their clientele in a way that helps empower them to make informed choices and to reduce their debt burden.

Four Bands Community Fund is a CDFI that serves the Cheyenne River Sioux Indian Reservation, a nation with high poverty rates and unemployment. Four Band’s mission is to continuously strive to create economic opportunity on the reservation by helping people build strong and sustainable small businesses and increase their financial capability to enter the financial mainstream. Its programs and services translate the traditional Lakota values of self-sufficiency, wise resource management, and a spirit of entrepreneurship into practical applications for today's modern reservation community.

Four Bands offers a range of programs and services designed to promote personal financial management and to encourage people to make informed choices when accessing credit products. It offers a class on personal financial management, the use of credit, and ways to build assets. An individual development account program encourages and enables individuals, including youngsters, to set aside money in a savings account that can work toward building an asset base and a pattern of saving money. The organization also manages a successful youth financial education program, promoting financial capability in the next generation of community leaders.

First Nations salutes these two organizations during Financial Literacy Month, and is proud to have supported both organizations with grants for them to grow and expand their programs. By working together and supporting innovative financial education programs on Indian reservations, we are helping build tribal economies and promoting financial security for Native families.