Interview #12 Stephen Highers | Cherokee Nation Economic Development Trust Authority

Interview #12 Stephen Highers | Cherokee Nation Economic Development Trust Authority

Interview #12

STEPHEN HIGHERS | Cherokee Nation Economic Development Trust Authority

In this latest edition of “Difference Makers,” NCN sits down with Stephen Highers, who serves as Director of the Small Business Assistance Center with the Cherokee Nation Economic Development Trust Authority (CNEDTA). Federally certified in 1998, CNEDTA is a Native CDFI that provides Cherokee Nation citizens and employees with consumer and commercial loans.

A Cherokee citizen, Stephen previously worked for several years as the central field representative for U.S. Congressman Dan Boren. He also is active with many community organizations, such as: Northeast Oklahoma Regional Alliance, Select Oklahoma, Tahlequah Area Chamber of Commerce, Lake Area United Way (serving as its board treasurer), and Neighbors Building Neighborhoods, a non-profit resource center where he serves as vice chair on the board of directors. Stephen is serving his second term on the Tahlequah City Council and is a trustee of the Tahlequah Hospital Authority. In addition, he serves as the Southern Plains delegate on the Native CDFI Network’s Policy Committee.

In this uplifting conversation with NCN, Stephen shares how CNEDTA has organically grown its commercial and consumer loan portfolios to meet the growing needs of the Cherokee community, and how CNEDTA has spearheaded the growth of a burgeoning private sector economy across northeast Oklahoma.

NCN: Why do you what you do? How did you come to lead Cherokee Nation Economic Development Trust Authority (CNEDTA)?

Highers: I came into this role by chance. After I graduated college, I went to work for a U.S. congressman and I had been with him for seven-and-a-half years when he decided he was retiring. In working for him, I had formed relationships with various different boards and those working within communities, including the Cherokee Nation’s executive director of commerce. About the time the congressman decided he was retiring, Cherokee Nation had this opening, and it just kind of fit together. I immediately fell in love with the work, the mission, and the vision of this CDFI and I have never looked back. It has been an absolutely wonderful career to have.

I didn’t even know what a CDFI was before I took the position, which I don’t think is too strange to a lot of CDFI practitioners. It was like drinking from a fire hose at the beginning to learn about it, but once I did, I just knew this was where I was supposed to be.

NCN: As you know, there are more than 70 federally certified Native CDFIs across the country and many more “emerging” CDFIs following in their footsteps. Why did Native communities feel it necessary to create CDFIs, and what fundamental role do they play?

Highers: CDFIs have proven themselves to really make a difference within communities, specifically within tribal communities. We’re there to reach businesses, entrepreneurs, and people that otherwise wouldn’t be able to follow their dreams because they’re unbanked people, they’re not touched by traditional lending institutions, or they don’t have access to lending within their communities. We’re bridging that gap. As more and more tribes see there is this type of entity out there that can help, it just makes sense to have a CDFI as part of their umbrella of services for their tribal citizens.

There are now quite a few of us out there, and some that have been doing this for a long time. There’s a good knowledge base among CDFI practitioners that you can learn from, and that’s one of the great things about Native CDFIs is we’re all there for each other. If I have a question or I need help or I’m mulling over a new loan product that I think may be good for my community, I know chances are somebody out there in the Native CDFI world has that knowledge and they are a phone call or an email away. What’s good for one could be good for another. Sharing that knowledge is incredibly helpful. You don’t see that across a lot of other industries because people want to hold on to their knowledge.

“Since 2010, we’ve deployed over $21 million to 391 small businesses and helped to create over 1,600 jobs…What I see in those 1,600+ jobs are the dreams of people who wouldn’t have been able to start their businesses and see their dreams through to fruition without our Native CDFI.”

NCN: What do policymakers and the general public need to understand about Native CDFIs and the difference they make?

Highers: It’s just a matter of getting our stories out there. When you’re looking at 70 federally recognized Native CDFIs, that’s a small number compared to the financial services industry as a whole. We need to get our name and our story out there, and with NCN [Native CDFI Network], we have a wonderful avenue to do just that. Our story is starting to grow and people are starting to be drawn to us.

The thing is we’re small organizations and often short-staffed. We’re putting our head down and we’re getting the work done in our communities, which inhibits us from sharing our stories at the national level by talking to our Congress people. But as we’re able to coalesce around one organization that allows us to do that, we’re getting our stories out there to policymakers and the public. It enables you to build those relationships and move the needle from a policy perspective.

NCN: Tell us more about CNEDTA. How does it work to foster prosperity in the communities it serves?

Highers: We have been a certified Native CDFI since 1998. We work within the Cherokee Nation Reservation, which are the 14 northeast counties of Oklahoma. We have grown our CDFI very organically. We started with a small consumer loan fund, but with support from the Cherokee Nation and federal agencies, like USDA and Treasury, we have grown our capacity by revolving our money to small businesses and consumers. We have been a change-maker within our community. Since 2010, we’ve deployed over $21 million to 391 small businesses and helped to create over 1,600 jobs. Those are private sector jobs with small businesses in small, rural tribal communities in northeast Oklahoma. What I see in those 1,600+ jobs are the dreams of people who wouldn’t have been able to start their businesses and see their dreams through to fruition without our Native CDFI. It’s amazing when you step back and think that you’re a part of something that has been able to multiply like that. We’re keeping the lifeblood of our communities going through small business support. Oklahoma is structured a little bit differently than other states. A lot of Oklahoma municipalities survive almost solely on sales tax revenue. So those small businesses we’re helping to start and grow in rural communities are a primary source of municipal revenue that communities have to operate and fund local programs like infrastructure. So while we invest in jobs and small businesses, the dollars we lend impact so much more.

NCN: CNEDTA offers commercial loans and a diverse array of consumer loans, which we imagine is part of the Cherokee Nation’s commitment to ensuring there is affordable, non-predatory capital available in all of the different forms to Cherokee Nation citizens and employees who need to protect their assets and support their ability to grow their wealth over time. Is that an accurate portrayal?

Highers: That’s absolutely correct. The bulk of our portfolio is our commercial lending, but the bulk of our loans is our consumer lending. We deploy loans to Cherokee Nation employees working for the Cherokee government, its industries and enterprises, the housing authority, and our elder care facilities. This was simply an answer to keep people out of the predatory lending cycle. Citizens and employees were seeking debt consolidation to break that cycle as those small loans cost more money than they could repay. So we put together a program where employees are able to get a quick loan for up to $1,500. It’s paid back through their payroll deduction. We try to make the process very simple and fast so they don’t have to wait for it. This program has grown with the Cherokee Nation’s employment growth.

We are constantly assessing the financial needs of citizens and employees, and we recently started an automobile program for employees to reduce transportation barriers to employment. We were seeing predatory automobile financing where the down payment on the loan was basically the cost of the car, and then the dealers were financing at a high interest rate. In response, we launched a loan product with a low-interest rate to purchase an automobile to get you back and forth to work safe and sound. We use this method of keeping our ear to the ground and addressing the financial barriers Cherokee people face in their everyday lives. For another example, while we don’t provide mortgage loans, we provide foreclosure prevention counseling and lending to help keep people in their homes.

CNEDTA clients Suzanne Sullivan (mother) and Callie Prier (daughter), co-owners of Morning Sky Boutique and Evening Shade Mercantile. (Courtesy: Cherokee Nation Economic Development Trust Authority)

NCN: CNEDTA has helped an extraordinary number of people. Is there an individual’s client success story that really sticks out to you, that really inspires you?

Highers: There’s one that comes to mind in Vian, Oklahoma, which is a small community in Sequoyah County. We had entrepreneurs – a mother and her daughter – that wanted to buy a building downtown to start a boutique. At that point, Vian had been shuttered, if you will. The buildings on Main Street were closing. There was a hardware store still going and maybe a restaurant, but that was about it. But Suzanne Sullivan and her daughter Callie Prier just had it in their hearts that they were going to start this business and make it work. They came to us and we were able to help them with small business lending and technical assistance. They started a world-class boutique called “Morning Sky” that would have been perfect in the heart of the finest shopping centers in Dallas or New York City. When the COVID-19 pandemic impacted in-person sales, they pivoted to online sales. Later, we were able to help them buy the building next door to put in a home accessories store called “Evening Shade Mercantile” that has a little coffee shop in it. They have brought back to life the downtown area of a community that had it not been for them likely would have continued to sit vacant.

NCN: From your perspective, what do Native CDFIs like yours need to realize their full potential? What support do they need to achieve their missions and maximize their impact?

Highers: The number one thing that comes to mind is funding. I’m sure that’s what everybody says. But we need dollars both to operate the organization and meet the lending demand. Right now, we have just over $12 million in our portfolio. I truly believe that if it were $14, $15, $16, or $20 million, we would be able to get all of that money out the door. We have so many entrepreneurs and we have so many people within our communities that could be and should be and will one day be small business owners

We also need operating capital to grow, as many Native CDFIs are at operational capacity. We’re doing the best we can and the most we can with what we have. But to go to that next level, you’ve got to be able to staff it. To do that, we need funding, and we need to be able to tell our collective story. We need to raise up our successes and show people we are making a difference. A lot of times, we may be the only ones that are making a difference within some of our communities. That’s a story that should be told and it should be shouted from the mountaintops.

To learn more about the Cherokee Nation Economic Development Trust Authority, please click here.

NCN News for the Week of June 23

Thursday, June 23 NCN Webinar:
The Native American Rural Homeownership Improvement Act: Enhancing the USDA Section 502 Home Loan Program 

Native CDFI leaders, staff, and key stakeholders are invited to participate in this important webinar this Thursday, June 23 at 2:00 p.m. EDT to learn more about the Native American Rural Homeownership Improvement Act of 2021 (S. 2092) and how it will strengthen the USDA Section 502 Home Loan Program, which is an important tool available to Native CDFIs in cultivating homeownership across Indian Country. Congressional staff representing bill co-sponsors U.S. Senator Mike Rounds (SD) and U.S. Senator Tina Smith (MN) will present an overview of the bill and engage in a dialogue with attendees about how to get the legislation across the finish line.

REGISTER FOR WEBINAR

NCN “Difference Makers” Interview Series:
Skya Ducheneaux and Stephen Highers

Last week, the Native CDFI Network released its latest edition of “Native CDFIs: Difference Makers for Indian Country,” an interview with Skya Ducheneaux, Executive Director of Akiptan, Inc. A federally certified Native CDFI based in Eagle Butte, South Dakota on the Cheyenne River Sioux Reservation, Akiptan serves and supports Native agricultural producers nationwide. To read the interview, please click here.

Coming this Thursday: “Difference Makers” sits down with Stephen Highers, who serves as Director of the Small Business Assistance Center with the Cherokee Nation Economic Development Trust Authority (CNEDTA). A federally certified Native CDFI of the Cherokee Nation, CNEDTA has been serving the Cherokee Nation and its citizens since 1998.

To read the other interviews in NCN’s “Difference Makers” series, please click here.

NCN Attends Housing Tour Sponsored by South Dakota Native Homeowner Coalition

NCN Board Chair and Interim Executive Director Pete Upton, attended the South Dakota Native Homeowner Coalition (SDNHC) Annual Coalition Convening and Tour. The three-day event held June 8-9, 2022, in Flandreau, SD featured discussions of policy tools that support Native homeownership, the practical challenges related to mortgage lending and available housing stock on trust lands and a physical tour highlighting the Flandreau Santee Sioux Tribe’s homeownership efforts.

NCN connected with Tawney Brunsch, SDNHC Board Member and Mellor Willie, NeighborWorks America.

“The work that the SDNHOC has done in South Dakota is inspirational and the story needs to be told of the success they are having. To have that many people in one room, focusing on one outcome, was powerful,” said Pete Upton, NCN Interim Executive Director and Board Chair.

Interview #11 Skya Ducheneaux | Akiptan, Inc.

Interview #11 Skya Ducheneaux | Akiptan, Inc.

Interview #11

SKYA DUCHENAUX | Akiptan, Inc.

In this latest edition of “Difference Makers,” NCN sits down with Skya Ducheneaux, who serves as Executive Director of Akiptan, Inc. A federally certified Native CDFI based in Eagle Butte, South Dakota on the Cheyenne River Sioux Reservation, Akiptan serves and supports Native agricultural producers nationwide.

Skya spent the first 18 years of her life on a ranch on the Cheyenne River Sioux Tribe Reservation. After graduating high school and obtaining a bachelor’s degree in Business Administration from Black Hills State University, she worked for the Intertribal Agriculture Council as an intern and then as a Project Coordinator, where she was introduced to the Native CDFI world. Skya then played an instrumental role in creating Akiptan, the first national Native CDFI dedicated exclusively to Indian agriculture. In 2019, she obtained her master’s degree in Business Administration from Capella University.

In this lively conversation with NCN, Skya shares her ranching upbringing, her role in creating Akiptan, and her perspectives on the importance of Native CDFIs partnering with Native small business owners such as agricultural producers to help them achieve their dreams.

NCN: Why do you do what you do? How did you come to lead Akiptan CDFI?

Ducheneaux: I’ve been fortunate enough to stumble into some good situations, and that’s how I got this position. I grew up on a ranch on the east end of our rez, a cattle ranch, and when I turned 18 I thought to myself, “I never want to work this hard again in my life. I never want to see another cow. I’m going to school and getting a business degree because you never use business in agriculture.” How naive I was, but that’s where I was at 18. Then I went to college and I really started missing the people in the agriculture industry – not the work. I still don’t want to work that hard. I like my climate-controlled office (laughs). But I missed the industry and the people in the industry. In the summers of 2014 and 2015, I was fortunate enough to intern for the Intertribal Agriculture Council [IAC]. And then when I graduated with my undergraduate degree in 2017, I wanted to move home and work in an office. I didn’t want a ranch, but I wanted to move home because I really missed home and the environment here. So Zach Ducheneaux and Ross Racine with IAC offered me a position to create this CDFI. I said, “Heck yeah, I’ll take it.” I spent all of 2018 going to conferences and trainings to learn what a CDFI was, how we wanted to do Akiptan differently, how to balance producer prosperity with lender security, how to practice patient capital, and how to make lending Indigenous, because it is not Indigenous. We officially launched in 2019. This is not where 18-year-old Skya thought she would be at all, but I am very glad I am here. I am so happy I took this chance.

NCN: As you know, there are more than 70 federally certified Native CDFIs across the country and many more “emerging” CDFIs following in their footsteps. Why did Native communities feel it necessary to create CDFIs, and what fundamental role do they play?

Ducheneaux: The cool thing about Native CDFIs is we have dirty boots. We are active members of our communities. We know what it’s like out there, and we live that experience every day with our clients, and we don’t ever forget what it’s like. So we continue to work hard for our community members, for our producers, for our small businesses. When you have that lived experience, you’re in a unique position to create solutions that actually work for Indian Country. It’s not just a pie-in-the-sky dream. You’re able to do 95% good work and 5% fluff stuff, because it’s all very relevant. That’s what makes Native CDFIs absolutely critical to Indian Country. We’re so flexible and we’re always willing to meet the needs of our community members as many times as those change and pivot. For example, some Native CDFIs have never done ag [agriculture] lending, but they get one inquiry and they’re like, “Well, we do ag lending now.” Or when the government shut down, they were doing short-term loans to meet those needs for the federal employees on the rez because that’s such a huge demographic. They need a lot of youth curriculum and youth education in the community, so they pivot to meet that need. There’s nothing Native CDFIs can’t do.

“The cool thing about Native CDFIs is we have dirty boots. We know what it’s like out there, and we live that experience every day with our clients… When you have that lived experience, you’re in a unique position to create solutions that actually work for Indian Country.”

NCN: What do policymakers and the general public need to understand about Native CDFIs and the difference they make?

Ducheneaux: It goes back to what I said before – we do 95% work in the trenches and 5% fluff stuff, and that 5% of fluff stuff is where we’re doing like the marketing and the advertising and related work. But we’re out there doing the work, not talking about it. We’re out there putting our money where our mouth is. That is great for our community members, but it’s not always great for advertising the industry, right? Native CDFIs have such a deep and broad footprint, but we don’t even realize it because we just do the work. We’re too humble to brag about what we’re doing. That’s where the gap is, so Akiptan has had to make a conscious effort to be better about our marketing and advertising, to be able to reach out to do more fundraising. Our marketing strategy for our producers is mostly just word of mouth. That’s what works best in Indian Country, so we don’t spend a lot of time doing all this crazy fluff stuff because that’s not our core demographic. But we need to be able to attract investors. We are a critical industry that doesn’t always get the recognition because we’re just out there doing it. We’re not asking for praise.

NCN: Tell us more about Akiptan. First off, what does “Akiptan,” a Lakota word, mean, and why was it chosen as the CDFI’s name? How does Akiptan work to foster prosperity in the communities it serves?

Ducheneaux: When I started at Akiptan, the only thing that had been created at that point was the name. We had to build the policies from the ground. The name is really reflective of our lending philosophy and how we treat our producers. So “Akiptan” is one word for cooperatively doing something together. We genuinely believe in treating our producers as partners as opposed to borrowers, because their success is our success. We want to set them up as best as we can. It’s not like, “I’m the lender and you’re the borrower, and I see that you’re going to clear $30,000. Our loan payment is going to be $29,999.99.” It’s, “What can we do together so that you can be successful at your operation?” We focus on the relational side just as much as the transactional side. We do quarterly check-ins with them that are really informal. We really make the effort to create that relationship and be more helpful to the producer, and we do that through a joint effort. We believe in bringing a chair to the table for them so they can be a part of the decisions. It’s their operations and their dreams, so why shouldn’t they get to be a part of the decisions? We’re not just telling them what to do, and that way they’re working hard in the spirit of their dreams versus out of fear of the lender. It just changes that dynamic. We make sure to stick to that 100% in everything we do.   

NCN: Akiptan’s mission “is to transform Native agriculture and food economies by delivering creative capital, leading paradigm changes, and enhancing producer prosperity across Indian Country.” What does that look like in practice in terms of the specific activities Akiptan engages in?

Ducheneaux: The first part, creative capital, Akiptan will go up to five years interest-only – super patient capital. Often if you go to the bank for anything agriculture related, because agriculture has so much perceived risk, they do short terms, high repayment, high interest, and then displace all of the risk on to the producer, making it harder for them to succeed. We take a step back and do things a bit differently. We’re more creative with our patient capital. When they have up to five years interest-only, or if they’re even making blended payments and if it’s patient enough and low enough, they’re able to take those profits and reinvest them back into their operation. They can buy more livestock with their profits or retain more livestock. Instead of having to sell things all the time, they’re able to upgrade their infrastructure and equipment with their profits instead of having to take out more loans. They’re able to make those upgrades, which in turn makes their operation more effective and efficient and enhances their cash flow by growing their assets.

The next part of the mission is leading paradigm changes because we are not gatekeeping over here at Akiptan. We are happy to share our secrets of success in everything we have learned. We want to show there is more than one way to do lending. Come check out what we’ve been doing and see if this is going to work for you at your operation, if you guys can have the success we’re having. It’s about changing the industry of not just agriculture finance or Native finance but finance as a whole by leading the charge and putting our money where our mouth is and showing them that it’s been working great for us and our producers.

Akiptan client Spring Schreiner, owner of Sakari Farms. (Courtesy: Akiptan, Inc.)

With enhancing producer prosperity, we want to make sure producers are at the forefront of everything that we do. Because that’s what we’re out here for every day, is making sure our producers succeed. We are here for them. We’re not here for ourselves.

NCN: Akiptan has helped an extraordinary number of people. Is there an individual’s client success story that really sticks out to you, that really inspires you?

Ducheneaux: Those first loans I did will always have a special place in my heart. One of our very first clients was Spring Schreiner. She’s an amazing producer out in Bend, Oregon just off the Warm Springs rez. She was a vegetable grower and she had a small value-added line where she would sell herbal teas and stuff like that. She came to us for a loan for a greenhouse because she’s in the high desert. It was going to expand her growing season. It created a climate-controlled environment so her crops would do better, which would help increase her profits. Not only does she grow produce and sell it, she gives back to her local tribe and she teaches seed saving. So we set her up with our interest-only loan, and with her profits, she was able to purchase two or three more greenhouses. She then came back to us for financing for a commercial kitchen so she could do more value-added products. The operation started out as a part-time gig for her and her partner, and now it is full-time. They’re hiring employees, they’re giving back more, they’re teaching more. It just goes to show what a little bit of patient capital and a really determined producer can do!

NCN: From your perspective, what do Native CDFIs like yours need to realize their full potential? What support do they need to achieve their missions and maximize their impact?

Ducheneaux: We just need people to believe in us as much as we believe in our producers. We need policy change to have more access to different funding sources and different programs. We need foundations to treat us like thought partners when they’re looking at investing or granting to us. There needs to be more trust-based philanthropy because we’re out there in the trenches. We know exactly what our community needs. I preach this all the time. It’s a soapbox message of mine. Since colonization, Indian Country has been prescribed solutions because we are perceived as broken and someone from the government will come in and be like, “Oh, you’re broken or you’re poor. Let me give you these commodity boxes or let me give you this housing program.” We’re just prescribed these solutions without any input from our side. We have the right to self-determine our solutions. So we need a seat at the table all of the time when we’re talking about how to “fix” – I say “fix” sarcastically – Indian Country, because Indian Country isn’t broken. We’re just a little bit different than our non-Native counterparts. We don’t need somebody to come in and save us. We can save ourselves. We just need the proper access to resources. We haven’t always had resources, but we have amazing individuals that are incredibly determined. We just need equitable access to resources. That’s what it boils down to.

To learn more about Akiptan, please click here.

 

NCN News for the Week of June 13

NCN WEBINAR with Federal Agencies This Thursday, June 16:
“Modernizing the Community Reinvestment Act: The NPR’s Implications for Indian Country and Native CDFIs”

This Thursday, June 16 at 2:00 p.m. EDT, NCN will host a special two-hour webinar featuring representatives from the federal agencies tasked with regulating lending institutions’ compliance with the Community Reinvestment Act (CRA). They will be on hand to provide an overview of the new Interagency CRA Notice of Proposed Rulemaking (NPR). They also will detail the section focused on Indian Country titled “Activities in Native Land Areas” (see pages 96-103) and the sections focused on Treasury Department-certified CDFIs, including Native CDFIs (see pages 88-93 and 112-119).

SESSION AGENDA:
2:00 to 3:00 p.m. EDT – Comprehensive overview of the NPR (webinar participants are strongly encouraged to watch/listen to the CRA NPR explanatory video in advance of the webinar here – you must sign in to access).
3:00 to 3:15 p.m. EDT – Focused presentation on “Activities in Native Land Areas” section
3:15 to 3:30 p.m. EDT – Q&A with federal officials on “Native Land Areas” and CDFI sections as well as other parts of the NPR
3:30 to 4:00 p.m. EDT – Debrief among attendees; discussion of issues to raise and questions to pose in NCN’s formal comments on the CRA NPR

Native CDFIs, tribal governments, and other interested stakeholders have until August 5, 2022 to submit formal comments on the NPR. To review the NPR, the interagency press release, the NPR Fact Sheet, and related materials, please click here.

REGISTER FOR WEBINAR

June 23 NCN WEBINAR:
The Native American Rural Homeownership Improvement Act (S. 2092): Enhancing the USDA Section 502 Home Loan Program

Native CDFI leaders, staff, and key stakeholders are invited to participate in this important webinar to learn more about the Native American Rural Homeownership Improvement Act of 2021 (S. 2092) and how it will strengthen the USDA Section 502 Home Loan Program, which is an important tool available to Native CDFIs in cultivating homeownership across Indian Country. Congressional staff representing bill co-sponsor U.S. Senator Mike Rounds (SD) will present an overview of the bill and engage in a dialogue with attendees about how to get the legislation across the finish line.

REGISTER FOR WEBINAR

NCN “Difference Makers” Interview Series:
Sara Barbour and Skya Ducheneaux

Last week, the Native CDFI Network released its latest edition of “Native CDFIs: Difference Makers for Indian Country,” an interview with Acting Executive Director Sara Barbour of the Yurok Tribe’s The Alliance CDFI, a federally certified Native CDFI located in northern California whose mission is to “promote economic and financial assistance, small business development, and build assets within the Tribe’s jurisdiction among tribal members, improving the quality of life for its peoples and communities.” To read the interview, please click here.

Coming this Thursday: “Difference Makers” sits down with Skya Ducheneaux, Executive Director of Akiptan, Inc. A federally certified Native CDFI based in Eagle Butte, South Dakota on the Cheyenne River Sioux Reservation, Akiptan serves and supports Native agricultural producers nationwide.

To read the other interviews in NCN’s “Difference Makers” series, please click here.

Important Update on State Small Business Credit Initiative (SSBCI) Program

The Native CDFI Network would like to provide you with a brief update and status report on the State Small Business Credit Initiative (SSBCI) program.

Upcoming events and deadlines:

  • Treasury will be conducting weekly webinars this month, scheduled for every Thursday at 4:00 p.m. EDT.
  • Treasury will also conduct a webinar on tribal government joint applications, scheduled for today, June 13, 2022 at 4:00 p.m. EDT. TO REGISTER, CLICK HERE.
  • Program applications are due September 1, 2022.
  • Technical assistance grant applications are due September 1, 2022. The technical assistance grant application guidance can be found here.

Program Updates:

On May 9, the U.S. Treasury issued its Capital Program Reporting Guidance, which can be found here. This guidance was recently updated on May 25.  Treasury also published a sample demographic reporting form, based on the interim rule (discussed below).

In short, Treasury will require quarterly program reporting (such as total funds used and reused, program income and administrative costs) and annual transactional reporting (at the borrower or investee level).

Examples of annual transactional information required include:

  • Provider (i.e., lenders, investors) information
  • Source of private investment for loan or investment
  • Loan or investment performance
  • Borrower or investee business specific information (name, NAICS code, revenue, employees, purpose of loan, size of loan)
  • Tribal government program information (type of transaction and location of business)
  • Treasury has also published a draft Allocation Agreement, which every tribe must sign as a condition to receiving its SSBCI allocation.

Treasury’s updated the SSBCI FAQs can be found here.

In March, Treasury published an interim final rule on annual demographic reporting requirements for the SSBCI program. As stated in the rule, jurisdictions, including Tribal governments, must collect certain demographic information and report annually to Treasury. The primary purposes include: to measure compliance with the SEDI goals, to provide exceptions to certain federal laws the prohibit collecting certain demographic information, and to measure the overall impacts of the SSBCI program on certain minority, underserved, and marginalized groups.

In short, lenders and investment managers will have to collect and report to Tribes the following information for each small business that receive loans, investments, or other loan or equity support programs:

  • Self-certified SEDI-demographics-related business
  • Minority-owned or controlled business
  • Woman-owned or controlled business
  • Veteran-owned or controlled business
  • For all principal owners (defined as 25% + ownership) of a small business
  • Race
  • Ethnicity
  • Middle Eastern or North African ancestry
  • Gender
  • Sexual orientation
  • Veteran status

While Treasury is requiring this information be collected for each loan, investment or other loan or equity support made to a small business, the small business does not have to provide the information requested.

CDFI Fund Seeking Application Reviewers for CDFI and NACA Programs

The Community Development Financial Institutions (CDFI) Fund is issuing a call for highly-qualified personnel to serve as application Reviewers for the FY 2022 application round of the CDFI Program and Native American CDFI Assistance (NACA) Program.

The CDFI Fund has contracted with Areeva/F2 Solutions (Areeva/F2) to recruit Reviewers. Recruitment will be conducted by Areeva/F2 until TODAY, June 13, 2022.

General Candidate Qualifications: The CDFI Fund and Areeva/F2 require Reviewers to have considerable expertise in the community and economic development finance sectors. Areas of expertise include:

  • Affordable housing
  • Small business
  • Microfinance
  • Commercial real estate financing
  • Financing of community-based organizations
  • Familiarity of depository institutions such as credit unions and banks
  • Pooling of community development loans for sale in secondary markets
  • Development service activities

In addition, qualitative skills are required, such as the ability to analyze large amounts of information and succinctly communicate findings, and the ability to quickly apply reliable guidance and feedback to analytical writing. Previous experience reviewing CDFI Program or NACA Program applications and/or prior Reviewer service for other CDFI Fund programs is preferred. Please note that individuals who are selected will be subject to a Conflict of Interest (COI) screening process. This process will occur after Reviewer selection and is a mandatory component of the selection process.

CDFI Program Overview: Through the CDFI Program, the CDFI Fund invests in and builds the capacity of CDFIs to serve low-income individuals and communities lacking adequate access to affordable financial products and services. The CDFI Fund invests in certified CDFIs by awarding Financial Assistance to applicants who have demonstrated the financial and managerial capacity to provide financial products and services to a low-income target market and to leverage additional resources effectively. Through Technical Assistance Grants, the CDFI Fund enables certified CDFIs and emerging entities working toward certification to build their capacity as lending institutions.

NACA Program Overview: In 2004, the CDFI Fund introduced the NACA Program, which was specifically designed to encourage the creation and strengthening of CDFIs that primarily serve Native American, Alaska Native, and Native Hawaiian communities (Native Communities). Organizations funded serve a wide range of Native Communities and reflect a diversity of institutions in various stages of development, from organizations in the early planning stages of creating a CDFI, to tribal entities working to certify an existing lending program, to established CDFIs in need of further assistance. The CDFI Fund awards both Financial Assistance and Technical Assistance awards under the NACA Program.

For more information about the CDFI and NACA programs, visit the CDFI Fund website.

Period and Location of Service: Application reviews are scheduled to begin in late July 2022 and continue through mid-September 2022. Reviewer training is scheduled to occur in mid-July 2022.

Reviewers are required to have consistent high-speed internet access, as the reviews will be completed using a web-based review tool and can be accessed from the Reviewer’s chosen remote location.

HOW TO APPLY: If you are interested in applying, please send a brief email indicating your interest to: CDFIReview@F2Solutions.com.

Thank you in advance for your interest in serving as a Reviewer for this important program.

Interview #10 Sara Barbour | The Alliance CDFI

Interview #10 Sara Barbour | The Alliance CDFI

Interview #10

SARA BARBOUR | The Alliance CDFI

In this latest edition of “Difference Makers,” NCN sits down with Sara Barbour, who serves as Deputy Director of the Yurok Economic Development Corporation (YEDC) and Acting Executive Director of the Yurok Tribe’s The Alliance CDFI. A federally certified Native CDFI located in northern California, Alliance’s mission is to “promote economic and financial assistance, small business development, and build assets within the Tribe’s jurisdiction among tribal members, improving the quality of life for its peoples and communities.”

Sara helped reorganize and recertify The Alliance CDFI when she started with YEDC in 2018. She is also a part of the Del Norte Economic Resiliency Task Force, which provides extensive support and assistance to small business owners throughout Del Norte County. Prior to her work with Alliance and YEDC, Sara worked for several years in housing, both for the Yurok Tribe and City of Crescent City.

In this engaging conversation with NCN, Sara shares The Alliance CDFI’s emergence as an asset-builder and small business developer in the Yurok community, and how Alliance helped Yurok small business owners withstand the COVID-19 pandemic and grow stronger.

NCN: Why do you do what you do? How did you come to lead Yurok’s Alliance CDFI?

Barbour: It was kind of by accident, actually. I don’t have a formal background in finance or lending, but I strive to do things that help people. That’s what makes me happy. Being able to provide a service to tribal members that is helpful in their life in one way or another is what pushes me to continue doing this work. Sometimes, the objective may seem relatively small. Other times, it’s bigger – things like starting a business or buying a home. Running The Alliance CDFI was just given to me as a task. But through learning, being self-taught, figuring out this whole world of Native CDFIs and CDFIs in general, I learned a lot, and I grew a passion for what CDFIs can do for local communities. Ultimately, I would love to see a workforce center with a small business incubator program to help expand our local economy. Lending is just a small part of what CDFIs have the potential of doing. My goal is to create a support system that provides local business owners with hands-on training and resources to help when they need it. The Alliance CDFI will eventually offer industry specific trainings and coaches to make sure our business owners succeed. Over the last four years, I have met so many wonderful people working in the Native CDFI space. The networking is amazing. The people at other Native CDFIs are super helpful. We all serve a common goal of empowering and bettering the lives of local tribal members. That’s what keeps me going in this business each day.   

NCN: As you know, there are more than 70 federally certified Native CDFIs across the country and many more “emerging” CDFIs following in their footsteps. Why did Native communities feel it necessary to create CDFIs, and what fundamental role do they play?

Barbour: It’s the common thread of access to capital. There’s a lack of that access across rural communities, tribal communities in particular. There are financial products that are not offered to rural communities and minority populations and that’s not okay. Tribal communities are standing up and we’re figuring out ways to be creative to get those products to the members that need them. Tribal communities can’t be ignored. We can’t be cut out of the funding that is provided to the rest of the states and other local municipalities. We’re learning how to band together and have our voices heard and fight for those dollars to come into our communities and have them serve our members in a meaningful way. It’s not a cookie-cutter solution that works the same for everyone. Those that work in Indian Country understand you have to be creative and think outside of the box. By having your own Native CDFI, you’re able to create those packages that are not so cut and dry. It’s not black and white. We are creating different solutions that work for different people that traditional banks wouldn’t even touch. It’s really amazing what Native CDFIs can do for the communities that they work in.

NCN: What do policymakers and the general public need to understand about Native CDFIs and the difference they make?

Barbour: Often, we hear, “Why don’t tribal members just go to Bank of America or the local bank down the street? What purpose do you serve that isn’t being served by a traditional bank?” The truth is when it comes to access to capital, Indian Country has been at the mercy of government programs. The rural, undeveloped nature of most Indian reservations puts them far from markets and everyday necessities, not to mention medical care. Generations worth of federal policies have undermined the recognition and sovereignty of tribal nations, which have left tribal communities without adequate support from the federal government, including financial services that are otherwise easily accessed by other communities. A lot of it has to do with our rural location. Those financial products just aren’t available to us. Tribal nations are not afforded the same opportunities in business creation and home ownership because our communities simply lack the necessary infrastructure. Our current leadership is trying to change that, and part of that process are tribal initiatives like Alliance CDFI that will eventually grow to be something much bigger that can bridge those gaps. Our CFDI is still relatively small, but we’re in the process of getting a few employees under me to help create more capital. We’ll go after different grants, get that capital out there. Once we grow our portfolio, it’ll just be a game changer. We’re not quite there yet, but we have goals and we’re getting there.

NCN: Tell us more about Yurok Alliance CDFI. What is its mission, and how does it work to foster prosperity in the communities it serves?

Barbour: So as you stated in introducing me, Alliance’s mission is to promote economic and financial assistance and small business development and build assets within the tribe’s jurisdiction among the Yurok Tribe’s members, improving the quality of life for its people and communities. What we’re trying to build is a place where they can go to start their business, clean up their credit, or consolidate debt. Rural community members tend to fall victim to those high-cost lending entities because they just don’t have another option, right? Maybe their home is on trust land, so the bank doesn’t recognize that as legit collateral. Or perhaps due to their family’s financial history they just don’t have the same opportunities for small business development. When you apply for a small business loan at a traditional bank, you have to have something of value that’s technically of higher value than the loan you’re going after to secure that loan. Well, if they had that, they might not be asking for the loan. If we’re not willing to take a chance on our community members and the tribal members here, who else will? Alliance currently doesn’t have enough funding to facilitate a home ownership program, but we are bridging the gap by connecting tribal members with resources to get them to that spot. If they’re not quite ready for a small business loan, I put them in touch with other resources that can get them one-on-one counseling to help them create their business plan. A solid business plan is typically one of those huge components to a small business loan. It’s not just about the money. We want to improve their credit so that maybe they can go to that bigger traditional bank that does have the money. We want to help them reach that goal, whatever it may be. For too long, they have been subject to predatory payday lenders and they think, “That’s just the way it is. It’s a vicious cycle, and I can’t get out of it.” Even if that’s the only service we can provide – helping them get out of that cycle – that’s a win to me. Helping them make their money work harder for them is success in my book.

“It’s not a cookie-cutter solution that works the same for everyone. Those that work in Indian Country understand you have to be creative and think outside of the box…We are creating different solutions that work for different people that traditional banks just wouldn’t even touch.”

NCN: Let’s talk about the pandemic. When COVID hit in 2020, the federal government responded with the CARES Act. The Yurok Tribe received its CARES Act allocation and turned around and gave $2 million of that funding to Alliance to make good on those relief dollars. Can you talk about why that decision was made and how Alliance had to shift on the fly to make sure that money achieved maximum impact?

Barbour: Tribal Council recognized Yurok member-owned small businesses were hit hardest right out of the gate with the pandemic. And then there were a smaller portion of those Yurok small businesses who the state government didn’t technically consider “legit” businesses on paper in terms of licensing and certifications. We have a lot of artists, jewelry makers, and small business owners who live and work on the reservation and don’t have a traditional business license. They’re not necessarily recognized by the state and therefore wouldn’t be able to qualify for some of those loans and grants SBA [the U.S. Small Business Administration] was offering. Tribal Council recognized that and knew that to meet this need, we had to get the money out fast because a lot of their businesses are also cash businesses, so there’s not a paper trail we can rely on to show verification. Yurok Tribe has a TERO [Tribal Employee Rights Ordinance] department. A lot of tribal members have certified their businesses through that department as certified vendors or tribal artists. So we were able to verify their history of business through that mechanism. Depending on the amount of revenue lost, that was the size of grant we were allowed to approve. The smaller businesses were capped at about $10,000. But then we have some tribal members who own large businesses and corporations. Regardless of their location, if they were tribal members, we were able to provide them assistance as well. The largest grants we did were $100,000. To launch this grant program, The Alliance had to change gears, we didn’t have any kind of grant opportunities like that under our current programs. Our small business loans have stricter eligibility guidelines. But because these were grants, we streamlined the process. We created a whole new program and were receiving applications within 3-4 weeks. In a matter of 12 weeks, we had processed 260 applications, 198 of which were approved, and we got $2 million out the door into the hands of small business tribal members. It was a huge success.

Alliance client Louisa McCovey, owner of Louisa McCovey Art & Design (Courtesy: The Alliance CDFI)

What made me feel so good about that program was they weren’t just using the money to live on. It wasn’t just about replacing the revenue they had lost. They were rethinking their businesses and rebuilding them. People that typically had just set up vendor booths at fairs and festivals took that money and created online websites and they were able to reach a whole different audience. Their businesses took a 180-degree turn, and they’re more successful now because they’re reaching so many more customers. They seized the opportunity to grow their businesses.

NCN: Yurok Alliance CDFI has helped an extraordinary number of people. Is there an individual’s client success story that really sticks out to you, that really inspires you?

Barbour: I’d like to share Louisa McCovey’s story. She was already a well-known artist in the area and with the COVID relief funding she received through us, she developed a website. Before, she was doing mostly photography, painting, and prints. She expanded into creating jewelry and she does online jewelry inventory drops! She’s great at social media and promoting her art. She’ll do social media posts announcing the release of new jewelry pieces, say at midnight on a certain day. Every time I’ve gotten on her website the day after a drop to purchase a pair of her earrings, they’re gone. They’re sold out, every time. She’s done really well for herself. I think the pandemic pushed her to make that online presence possible.

NCN: From your perspective, what do Native CDFIs like yours need to realize their full potential? What support do they need to achieve their missions and maximize their impact?

Barbour: CDFIs, because they are non-profits, some people see them as having no return on investment in monetary terms because they’re not necessarily making more dollars. But the community is benefiting in different ways. We’re providing tribal members support they would otherwise not have. We go after grants to meet that demand. There’s a lot of larger Native CDFIs that will lend me money, but that doesn’t always fit the bill. We need money to grow. We need logistics so we can pull credit reports and report back to the credit bureaus. We need our own server. We need our own building with separate access for security measures. A lot of tribes don’t have those logistics, which is the boat we’re in. While we’re certified and we’ve got some lending under our belts, we’re not yet eligible for the big CDFI grants because you need to have X number of dollars on your lending books. We’re just not there yet, but we’re getting there.

Yurok Tribe and The Alliance CDFI are applying for the State Small Business Credit Initiative, and we’re going to do commercial lending to tribal corporations with that money. Once we get that funding and get those loans on the books, it’s going to be a game changer because then we’ll have the resources to hire additional staff and we’ll be able to grow the cycling of money within our community.

To learn more about The Alliance CDFI, please click here.