By Shawn Marie Brummer
The Pine Ridge Indian Reservation’s first ever federally insured financial institution will be opening in December, and it will be a credit union, Lakota Federal Credit Union (LFCU).
A “for profit” bank was never really an option for the reservation. By contrast, a not-for-profit credit union with a philosophy of “people helping people” is a good fit for the more than two million acre reservation, one of the largest and poorest Native American Reservations in the United States and home to approximately 40,000 persons, of which 35 percent are under the age of 18.
The field of membership for this new credit union will be open to anyone who lives, works, worships, volunteers, attends school, or conducts business on the Pine Ridge Indian Reservation. Members are not required to be Native American to join.
The National Credit Union Administration (NCUA) has already designated LFCU as a low income credit union, which means that they can accept deposits from anyone – whether they qualify for membership or not. This includes individual(s) deposits, as well as deposits from other financial institutions. The credit union will be insured and deposits up to 250,000 will be guaranteed by NCUA.
The credit union’s new Manager, Whitney O’Rourke, has been working with staff from Lakota Funds, including Executive Director Tawney Brunsch, since 2010 when the idea of a chartered credit union for the reservation started looking like it would become a reality. Lakota Funds owns the Lakota Trade Center building where the new credit union is located in Kyle.
Whitney attended Weatherford Community College on a rodeo scholarship (she still participates in the rodeo events of roping and barrel racing) and then continued at South Dakota State University in Brookings, earning her Bachelor’s Degree in Economics. She grew up in Interior, on her family’s ranch and attended high school in Wall. Her previous work experience includes financial resources support at the Badlands National Park’s Natural History Association.
Lakota Funds is a community development financial institution (CDFI) that is helping to lead an economic resurgence of the Oglala Lakota Oyate on the Pine Ridge Reservation through culturally appropriate strategies, reigniting the traditional Lakota spirit of productivity, commerce, and trade. The credit union has received three start-up grants from the Native American CDFI Assistance (NACA) Program, which has enabled them to hire one additional employee for the credit union. Shayna Richards will be the credit union’s member service representative.
The CDFI Fund through the NACA Program provides funding to build the community development capacity of Certified Native CDFIs, Emerging Native CDFIs, and Sponsoring Entities, and to increase access to capital in Native Communities.
Lakota Federal Credit Union started accepting deposits on November 12, but the doors will not “officially” open until December 1.
According to O’Rourke, one major goal of the credit union is to allow members to have access to their money without being penalized. Currently, many of the reservation’s citizens are using check cashing agencies and off-reservation banks, both of which charge fees in order to cash their checks.
Another goal for the credit union is to help their members to become more “money savvy.” This will involve financial literacy education, both in the schools and in the community at large.
One of the problems the new credit union will face will be attracting deposits in an area with an unemployment rate that is over 80 percent and a history of dealing in “cash only” transactions. But the credit union has planned for this difficulty and has already taken steps to attract deposits. The credit union has been doing some advertising to get the word out that there will be a financial alternative for the community.
They will be going to schools and businesses, encouraging people to open savings accounts rather than dealing with cash. The credit union will not be offering checking accounts, at least not in the beginning phases of development. However; in order to give their members access to their cash, the credit union will be utilizing “CU Money” reloadable debit cards. The cards will be customized with the new credit union’s logo, and members will be able to transfer funds easily from their savings accounts to their cards via internet or phone. Additionally, the CU Money cards will provide LFCU members with access to ATMs.
LFCU members will be encouraged to participate in Lakota Funds’ matched savings accounts. The Lakota Tiwahe Asset Building program is an Individual Development Account (IDA), to be used specifically for building assets.
These accounts provide the capital, incentive and support necessary to move individuals and families towards home ownership, business development, or post-secondary education. This program has a 3:1 match; meaning Lakota Funds deposits $3.00 for every $1.00 a participant deposits. Participants can deposit up to $1,440, and Lakota Funds deposits up to $4,320, for a grand total of $5,760 that can be used towards asset-specific purchases.
There are certain financial eligibility requirements that must be met in order to qualify for the program. Additional requirements include attending financial literacy classes and training, attending IDA support meetings, and making minimum monthly deposits.
The task of starting a credit union is huge under the best of conditions, but the Pine Ridge Reservation with the help of Lakota Funds, NCUA, and other organizations has embraced the challenge and is ready to open the doors of Lakota Federal Credit Union to the community.
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