Wells-Fargo has a part in the myth and history of the American West. With the westward expansion of the great transcontinental railroads, Wells Fargo established outposts not just in the newly built railroad towns, but eventually they built branches on the reservations. Native American tribal and reservation lands remain, in the west, geographically isolated. Members had access to one bank, the only one physically present, and the one that had long been a part of the cultural landscape of the west.
With the rise of casino-culture, tribes and tribal members began having greater financial resources, but did not have the educational support from schools and the community about financial literacy. They depended on banks for information. When tribal banks began opening, with local branches, many people switched their financial services to banks that had a cultural tie.
But marketing is not the same thing as education, and in 2012 the Consumer Finance Protection Bureau (CFPB) began investigating the marketing, loan, and collection practices of several for-profit tribal banks. The authority the CFPB uses to request information and begin an investigation rests with Dodd-Frank. The banks initially requested to be exempt from information requests, as they were not under the authority of Dodd-Frank as self-governing or sovereign people.
The question of the federal government’s authority to regulate business on a Native American reservation is a contentious one. After several years of arguments through the federal courts system, the Ninth Circuit Court of Appeals recently published an opinion. They affirmed that there are three areas in which tribal governments have jurisdictional authority: issues of self-governance, issues covered in tribal treaties, and issues of cultural behaviors and traditions. Since western financial and banking practices do not come under any of these, then Dodd-Frank does apply to native or tribal banking and financial institutions.
The CFPB was requesting information about areas that reflect a pattern of continued exploitation of a group with limited financial inclusion and literacy education. Deceptive marketing, predatory lending, and illegal collection actions, as well as misunderstandings about how credit is scored and what can be done to correct credit reports that are inaccurate, are areas in which for-profit financial institutions can easily prey on those who do not experience the same degree of financial inclusion as the rest of society.
Wells-Fargo is supporting the Dakota Access Pipeline and has been cited for multiple policies that reflect predatory financial behavior. It would be unfortunate if for-profit tribal financial businesses were also exploiting an underrepresented people. Financial inclusion might need, first, education, and information on how to access ethical financial services.
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