Breaking News: Save the Date (August 10) for Conference Call for CDFIs in an ACR-Related Cure Period

The Community Development Financial Institutions Fund (CDFI Fund) is holding an informational conference call for those Community Development Financial Institutions (CDFIs) that are currently in a Certification cure period related to the submission of a 2021 or 2022 Annual Certification and Data Collection Report (ACR).

The CDFI Fund recently announced that on October 1, 2022 it is implementing a blackout period for six months to prepare for the launch of the revised CDFI Certification Application and reporting requirements. During this time, CDFIs are required to maintain a state of good standing with respect to their CDF Certification status. CDFIs currently in a Certification cure period related to a 2021 or 2022 ACR Report Year submission are obligated to adhere to the specific deadlines and deliverables associated with that cure requirement. Failure to do so can result in a loss of Certification during the blackout period.

To assist CDFIs currently in a Certification cure period, or those awaiting a determination as to whether they will be placed in a cure period, the CDFI Fund is conducting a live conference call on August 10, 2022. The call will provide general information on how CDFIs can satisfy the terms of a cure and resolve Certification deficiencies during the coming CDFI Certification Application blackout period. The CDFI Fund strongly encourages the participation of a representative from any CDFI currently in a Certification cure period.

Please note, the conference call will cover general issues related to the process for resolving Certification-related cure issues. Organization-specific cure requirements will not be discussed during the conference call. Please submit an AMIS Service Request for individualized questions related to your organization’s particular cure obligations.

Conference Call Instructions

Date: August 10, 2022
Time: 3:00 pm to 4:00 pm Eastern Time 
Access Details:

  • Call-In: 800-779-1636
  • Audience Passcode: 2421115

Requests for reasonable accommodations under section 504 of the Rehabilitation Act should be directed to Jay Santiago at the CDFI Fund at 202-653-0300.

Additional Information

Reasonable Accommodations: Requests for reasonable accommodations under section 504 of the Rehabilitation Act should be directed to Jay Santiago at the CDFI Fund at 202-653-0300..

Interview #17 Lakota Vogel | Four Bands Community Fund, Inc.

Interview #17 Lakota Vogel | Four Bands Community Fund, Inc.

Interview #17

LAKOTA VOGEL | Four Bands Community Fund

In this latest edition of “Difference Makers,” NCN sits down with Lakota Vogel, who serves as Executive Director of Four Bands Community Fund, Inc., a federally certified Native CDFI based on the Cheyenne River Sioux Reservation in South Dakota whose mission is to create economic opportunity by helping Native people build strong and sustainable small businesses and increase their financial capability to create assets and wealth.

An enrolled member of the Cheyenne River Sioux Tribe, Lakota previously served as Assistant Director at Four Bands for five years. She also serves on the Executive Committee for the South Dakota Native Homeownership Coalition, and as Board Treasurer for Akiptan, a Native CDFI serving and supporting Native agricultural producers nationwide. Lakota obtained her master’s degree in Social Work from Washington University in St. Louis, where she focused her studies on Indian Country economic security and social development.

In this uplifting conversation with NCN, Lakota shares Four Bands’ “timeless” Theory of Change and how it drives the CDFI’s integrated approach to entrepreneurial development and asset building. She also stresses the importance of Native CDFI leaders learning from one another as they sustainably grow their organizations.

NCN: Greetings Lakota, it’s good to have you with us today.

Vogel: Thank you. I’m happy to be here.

NCN: Why do you what you do? How did leading Four Bands become your life’s calling?

Vogel: I’ve always been drawn to challenging opportunities, things that people normally don’t pursue. After I graduated from the University of Notre Dame, my goal was to become an FBI special agent, but there was an age limit. You had to be 25 to begin the special agent process, and I was only 23. So I had attended a few lectures at Notre Dame, and one of them was Teach for America. When they were sharing Teach for America’s locations, they didn’t have a lot of stars on their map within Indian Country. That was a big red flag for me. I raised my hand and asked some questions and it led to a relationship with a recruiter, who told me more about the program. I applied and became a high school special education teacher on the Rosebud Sioux Reservation. Not many people select the special education category. But I said, “Why not?”

That path led me to discover some rural systems that are broken, especially for individuals who are trying to transition out of high school and into their community as participating citizens in their society. There’s also not a lot of systems set up for students with disabilities or individuals with disabilities. So I went on to get my master’s in social work to help create those systems for individuals with disabilities. As part of my studies, I had to interview an American Indian leader I thought was inspiring, so I interviewed Tanya Fiddler, who was Executive Director of Four Bands at that time. Listening to the passion she had for the work really inspired me. She mentioned they were restructuring the organization to hire an assistant director and I was a few months away from graduation, so it lined up well. I came home and took the job.

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?

Vogel: Our population still cannot access financial systems the way the rest of America can. We’re continuously asking, “Why?” Some of it gets back to the individuals and exposing our clients to a certain level of technical assistance, which CDFIs provide. Then there’s another level of advocacy work we do that pulls on the levers of systems of change, because there’s something broken with how America recognizes our markets. There’s words like “risk” that are thrown on our markets that aren’t appropriate. They haven’t ever been analyzed to see if that word is appropriate for our markets. The institutions that control the building of wealth aren’t serving us the way we want to be served, so we end up thinking, “Well, let’s create our own.” The best tool for that is the CDFI tool, because we get to fundraise money and say, “This is what my community wants. This is what we’re going to do and how we’re going to do it.” It’s amazing work, honestly, with the flexibility you have if you’re community minded.  

NCN: What do policymakers, philanthropy, and the general public who aren’t familiar with Native CDFIs need to understand about them and the difference they make?

Vogel: It’s most prominent in the mortgage industry – the misunderstanding of what a CDFI can do. There’s a psychological issue called functional fixedness that humans have where you’re given a tool and the more often you use that tool, the less creative you get. So financial world folks, they’re trained through education and constant reiteration on a specific way their tool can be used. They lose the ability to see that tool being used in a different way, in a different market, because they become functionally fixed on what it can do. Now I’m looking at ways to get capital into the community. I’m exploring the many tools out there and trying to mold them into what fits for our community. We’ve got to untrain those in the financial world and unwind what they’ve learned about how to most effectively use their tool and open their minds to what it could look like in this market.

NCN: Tell us more about Four Bands. Driving its work is its Theory of Change, which is an integrated approach to entrepreneurial development and asset building that has helped strengthen the community for nearly two decades. What has that theory entailed in practice?

Vogel: Our Theory of Change has withstood the test of time, the many different products we’ve created for our markets, and our expansion and scalability into different markets. Our founders – Stewart Sarkozy-Banoczy and Tanya Fiddler – deserve a lot of credit for solidifying that theory of change for us. It is composed of four quadrants, which is helpful to think about when it comes to our Lakota values and teachings. The first is Educate. Anybody who walks in our door, we educate them about this game of credit. We don’t talk about it enough in school systems and daily conversation, so the least we can do is talk to them about this thing called credit – that it’s a number that follows you around like a thought bubble whether you want it to or not. It’s there, and here’s how it moves up and down. That’s the bare minimum they walk out knowing. What that looks like practically is we pull credit scores for our community regularly and discuss it with them. After that, Education also includes small business development classes, pre-mortgage and post-mortgage counseling, that kind of stuff.

If after all that education, they’re deciding, “Hey, I want to look at one of the financial tools you’re offering,” they move into the Finance phase, the second quadrant, and that is any of our loan products. After and during Finance, you can’t just push people out of the nest and expect them to fly. You must continue to Incubate and offer services or post-loan and technical assistance. Then you also must remember advocacy. So Advocate is our fourth quadrant – that ours is a story that needs to be told. You must continue to advocate, even if it’s to your tribal council who are setting the rules for small business licensing, all the way up to your national level with things like the Community Reinvestment Act regulations. So Educate, Finance, Incubate, and Advocate is the Theory of Change. We work in, fundraise for, and assign staff to each of those quadrants.

NCN: Four Bands recently built a business incubator featuring a 5,000-square-foot space for new businesses. Why did Four Bands take this step and how is the incubator taking shape?

Vogel: We have the third quadrant, Incubate, which was always meant to be a physical space, but building a physical space in a rural community is hard, especially as a nonprofit. There’s not many funders to help you offset capital outlay costs like construction costs. It took us 19 years to develop enough revolving loan fund principal return and unrestricted capital to invest in the land and then develop it with partners. We know after 20 years of funding the small business community that commercial market rates and the costs to update rural infrastructure are really expensive for those start-up organizations. If you’re a small business running a great food selling program out of your home and you want to expand into a kitchen, you’re going to most likely get an older building built in the 1940s in your community that doesn’t have updated electrical, water, etc. Those costs are really expensive for a start-up entrepreneur, especially when they’re just testing their market. We know that building a building and putting those amenities into it offsets the costs for start-up entrepreneurs and allows them to test their product or service on the market. We have six leasable spaces in the new building and by us moving out of our space, we opened up two more. It also opened our minds to becoming a developer. Previously, we were just a loan servicer doing loans, technical assistance, and training, but now we are thinking more broadly about what it looks like to invest and build in communities that are underestimated and overlooked. It sends a message to your community members that they’re worthy, this is a place to build things, and there’s opportunity here. We like that feeling. We’re looking to develop other properties because the incubator has been successful. Our community loves that it’s revitalized our downtown.

Previously, we were just a loan servicer doing a lot of loans, technical assistance, and training, but now we are thinking more broadly about what it looks like to invest and build in communities that are underestimated and overlooked. It sends a message to your community members that they’re worthy, this is a place to build things, and there’s opportunity here. We like that feeling.”

NCN: Recently, Four Bands was one of two Native CDFIs to participate in the USDA’s Section 502 Native Home Loan Demonstration Project. Why did Four Bands choose to participate and how did it turn out?

Vogel: We wanted to address the homeownership gap in our market. We asked ourselves, “Do we have enough mortgage capital on hand to do these on our own?” We just didn’t feel prepared enough unless we could pilot it. It’s a scary space to jump into because it’s a lot of capital for one loan. It’s also scary to think if the loan defaulted what sort of reputation you would have in your community as the evictor. So we did a lot of reflection. Finally, with support from the South Dakota Native Homeownership Coalition, we partnered to unlock federal funding and leverage our own. USDA was our best partner there with the 502 Program. It’s been successful in that we have the relationships on the ground, they lent us the money, and we deployed what we could. But there’s still a problem with the mortgage market and us getting continued capital to support the demand. It’s been the hardest thing to fundraise for the length of term. You can usually get investment capital for 5 to 10 years pretty easily, but to get the term you need to do mortgages, it’s really difficult. But what it’s doing is it’s exposing us to a different group of investors than we’ve ever had exposure to.  

NCN: Four Bands has helped a great number of people. Is there an individual client success story that really sticks out to you, that really inspires you?

Four Bands client Kelsie Kay, owner of Coffee Depot in Eagle Butte, South Dakota (Courtesy: Four Bands Community Fund)

Vogel: We have eight-year relationships with all of our clients, like coffee shop owner Kelsie Kay, who came in with credit issues. She wanted to figure out her credit and managing her credit card balances and better ways to support her family. She then moved herself into ideation and dreaming up a coffee shop. So we helped her test the market by supporting her with technical assistance, and she would make coffees for different local markets and run them to the markets. She then dreamed up her coffee shop space in our incubator. She did so well during COVID that she was able to purchase a business in downtown Eagle Butte. It was a funeral home that she converted into a coffee shop with a loan through us. It required updating electrical and water, but she now runs a successful coffee shop business, and has created a coffee culture in our town. So here you’re used to drinking Folgers or something like that, but she’s actually taught people what a latte is!    

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

Vogel: At this stage in our growth, I need advice. I need somebody to help me look at our balance sheet and talk about better ways to move money, because idle money sitting in our savings accounts is wasted money. There are ways to keep moving money, and I need that higher-level sophistication of running a successful business so interest can be returned to Four Bands to make it more sustainable. We’re exploring more revenue-generation models like becoming a mortgage broker and possibly creating a realty division and then making fees off that. I am looking for more internal revenue-generation models that also contribute to mission because we’re creating services our community still needs that don’t exist. We always need access to capital and liquidity. Recently, I was able to triple the amount of capital I got out the door because it was coming in from various sources during the COVID crisis. If we could continue to get that level of funding, we could keep meeting the demand in our communities. But all of us are undercapitalized, and we need access to longer-term, more appropriate capital for our markets.  

To learn more about Four Bands Community Fund, please click here.

NCN News for the Week of July 25

Native CDFI Leaders’ Discussion:
The Community Reinvestment Act NPR
TODAY, July 25, 2:00 to 3:00 p.m. EDT

 

Today, the Native CDFI Network (NCN) will convene Native CDFI leaders from across the country to discuss the Interagency CRA Notice of Proposed Rulemaking (NPR) for the Community Reinvestment Act. This important conversation will inform NCN’s formulation of its formal comments on the NPR as well as the formal comments that individual Native CDFIs are strongly encouraged to submit. The NPR comment deadline is Friday, August 5, 2022. To review the NPR, the NPR Fact Sheet, and related materials, please click here.

The CRA was signed into law in 1977 to encourage depository institutions to help serve the credit needs of the communities in which they operate, in particular low- and moderate-income (LMI) areas and populations. The CRA also sought to deter discriminatory credit and lending practices against those populations, a practice commonly known as “redlining.” To date, however, the CRA has failed to achieve these goals when it comes to tribal nations and communities. The regulations governing the CRA have not been substantively updated since 1995, so this current process represents a key opportunity for Native CDFI leaders to advise the federal government about how the CRA regulations should be modernized to better serve Native nations and communities generally and Native CDFIs specifically.

REGISTER HERE
 

CFPB Extends Application Deadline for New Members on 2022 Advisory Committees

 

The Consumer Financial Protection Bureau (CFPB) has extended its application deadline to July 30, 2022 at 11:59 p.m. EDT for interested candidates to apply to serve on four CFPB advisory committees. CFPB’s advisory committees comprise a wide range of experts and stakeholders who provide input to the Director on a variety of consumer financial issues, as well as on the Bureau’s strategic research planning process and agenda. The advisory committees also allow CFPB to hear directly from small financial institutions.

Interested candidates can visit the Apply to serve on the advisory committees page for more information and for the application link. The advisory committees page has links to the charters and past public meeting videos, agendas, presentations, and minutes.

 

NCN “Difference Makers” Interview Series:
Julia Nemark and Lakota Vogel

 

Last week, the Native CDFI Network released its latest edition of “Native CDFIs: Difference Makers for Indian Country,” an interview with Julia Nelmark, who serves as President and CEO of Midwest Minnesota Community Development Corporation (MMCDC) and CEO of White Earth Investment Initiative (WEII), a MMCDC subsidiary. A federally certified Native CDFI, WEII helps create jobs and improve community life for the White Earth Nation and other Native communities across Minnesota through homebuyer education, individual homeownership advising, financial counseling, business and consumer lending, tax preparation support, and other efforts. To read the interview, please click here.

Coming this Thursday: “Difference Makers” sits down with Lakota Vogel, Executive Director of Four Bands Community Fund, Inc., a federally certified Native CDFI based on the Cheyenne River Sioux Reservation in South Dakota whose mission is to create economic opportunity by helping Native people build strong and sustainable small businesses and increase their financial capability to create assets and wealth.

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

 

CDFI Fund Extends Application Deadline for CDFI Equitable Recovery Program Funding

 

On June 23, 2022, the Community Development Financial Institutions Fund (CDFI Fund) announced the opening of the FY 2022 CDFI Equitable Recovery Program (ERP) round with the public release of a Notice of Funds Availability (NOFA). The NOFA set forth the deadline for submitting the FY 2022 CDFI ERP Application via the CDFI Fund’s Award Management Information System (AMIS) as 11:59 p.m. Eastern Time on August 23, 2022.

Meanwhile, on July 14, NCN hosted a webinar in which the CDFI Fund provided a detailed overview of the CDFI ERP program. To view a recording of this webinar, please click here. In addition to the deadline extensions, the CDFI Fund is also amending the NOFA to clarify eligibility requirements around audited financial statements. Loan funds, venture capital funds, and other Non-Regulated Institution Applicants are required to have audited financial statements for their two most recent historic fiscal years. However, if the audit for the Applicant’s most recent historic fiscal year is not complete as of the due date of the AMIS Application, the Applicant must have audited financial statements for its two historic fiscal years prior to its most recent historic fiscal year. Regulated Institution Applicants that file Call Reports to their regulator are exempt from the requirement to have audits.

Recently, the CDFI Fund announced it will be extending the upcoming deadline to submit CDFI ERP Applications in AMIS to September 22, 2022, at 11:59 p.m. ET. Additionally, the CDFI Fund will be extending the deadline to submit the OMB Standard Form-424 Mandatory via Grants.gov to August 18, 2022. This extension will provide organizations additional time to undertake a thorough review of the CDFI ERP Application requirements and prepare their Application submissions. The CDFI Fund continues to encourage all FY 2022 applicants to submit their CDFI ERP Applications as soon as possible to ensure a successful submission.

An additional webinar will be held to discuss updates to the Application FAQs, available new materials, and to take additional questions. The CDFI Fund will provide separate information on this upcoming webinar.

In addition to the deadline extensions, the CDFI Fund is also amending the NOFA to clarify eligibility requirements around audited financial statements. Loan funds, venture capital funds, and other Non-Regulated Institution Applicants are required to have audited financial statements for their two most recent historic fiscal years. However, if the audit for the Applicant’s most recent historic fiscal year is not complete as of the due date of the AMIS Application, the Applicant must have audited financial statements for its two historic fiscal years prior to its most recent historic fiscal year. Regulated Institution Applicants that file Call Reports to their regulator are exempt from the requirement to have audits.

The CDFI Fund is releasing updated deadlines in anticipation of the publication of an amended NOFA in the Federal Register on July 19, 2022.

The new deadlines are:

  • August 18, 2022 at 11:59 p.m. ET: Last day to submit OMB Standard Form-424 Mandatory (Application for Federal Assistance) (SF-424)
  • August 18, 2022 at 11:59 p.m. ET: Last day to enter Employer Identification Number (EIN) and Unique Entity Identifier (UEI) numbers in AMIS
  • September 20, 2022 at 05:00 p.m. ET: Last day to contact CDFI Fund with questions about the CDFI ERP
  • September 20, 2022 at 05:00 p.m. ET: Last day to contact CDFI Fund with questions about Compliance or CDFI Certification
  • September 22, 2022 at 05:00 p.m. ET: Last day to contact AMIS-IT Help Desk (regarding AMIS technical problems only)
  • September 22, 2022 at 11:59 p.m. ET: Last day to submit complete CDFI ERP Application Package

Updated Guidance

All of the guidance, application materials, reference documents, and webinar information for the FY 2022 CDFI ERP application round are available on the CDFI ERP page. The following materials have been added or updated on the CDFI Fund’s website since the Application release on June 23, 2022:

The CDFI Fund will continue to update the application materials section of the CDFI ERP webpage as needed throughout the application round. Please refer back to the CDFI Fund’s website for updates.

For more information about FY 2022 CDFI Equitable Recovery Program Application, please visit www.cdfifund.gov/erp. For questions related to CDFI ERP, please submit a Service Request through your AMIS account, by emailing erp@cdfi.treas.gov, or calling (202) 653-0421.

WATCH WEBINAR HERE

NCN Hosts Webinar Showcasing the Success of the Section 502 Home Loan Demonstration Project

On Thursday, July 21, 2022, NCN hosted U.S. Representative Sharice Davids and USDA-Rural Development Under Secretary Xochitl Torres Small, along with Native CDFI leaders from the South Dakota Native Homeownership Coalition that included Tawney Brunsch, Joanna Donohoe, Stephanie Provost, and Lakota Vogel, in a conversation about Section 502 and the home loan demonstration project. Roundtable guests shared their challenges and successes related to the demonstration project. U.S. Representative Davids and Under Secretary Torres Small also took questions from attendees about the project and how legislation introduced in Congress seeks to turn the project into a permanent program with adequate funding to help meet Indian Country’s mortgage lending capital needs.

An overview of the Native American Rural Homeownership Improvement Act of 2021 (S. 2092, H.R. 6331) that would provide permanent access to this source of mortgage lending can be downloaded here along with a copy of a letter template to request co-sponsorship from your state representatives.

A recording of the session in its entirety is below:

Interview #16 Julia Nelmark | White Earth Investment Initiative

Interview #16 Julia Nelmark | White Earth Investment Initiative

Interview #16

JULIA NELMARK | White Earth Investment Initiative

In this latest edition of “Difference Makers,” NCN sits down with Julia Nelmark, who serves as President and CEO of Midwest Minnesota Community Development Corporation (MMCDC) and CEO of White Earth Investment Initiative (WEII), a MMCDC subsidiary. A federally certified Native CDFI, WEII helps create jobs and improve community life for the White Earth Nation and other Native communities across Minnesota through homebuyer education, individual homeownership advising, financial counseling, business and consumer lending, tax preparation support, and other efforts.

Prior to becoming chief executive of MMCDC and WEII, Nelmark served as MMCDC’s Director of New Markets Tax Credit Financing for 15 years. Originally from Illinois, she currently serves on the board of the Citizen Potawatomi Community Development Corporation, and she previously served six years on the Board of Directors of the Opportunity Finance Network (serving as OFN’s Board Treasurer and Audit Committee Chair for part of that time). She also serves on the New Markets Tax Credit Coalition Board and Executive Committee.

In this uplifting conversation with NCN, Julia shares the evolution and growth of both MMCDC and WEII and stresses the importance of relationship building and information sharing between Native CDFIs.

NCN: Greetings Julia, it’s good to have you with us today. Welcome.

Nelmark: Thank you. It is great to be here.

NCN: Why do you what you do? How and why did you come to lead the Midwest Minnesota Community Development Corporation (MMCDC) and its subsidiary, the White Earth Investment Initiative (WEII)?

Nelmark: I actually did not go looking for this work. I spent 15 years working in accounting, finance, and planning areas for a few manufacturing companies, and I knew very little about nonprofit work. I learned about MMCDC from a prior company I worked with and then came to work here and found that spark that had been missing. I get paid to help people, and that adds so much personal satisfaction. This work fits in with how I was raised in terms of helping others in any way needed. I’m still here after 18 years and enjoying every minute of it. I ran MMCDC’s New Markets program for 15 years, during which I was able to work with several tribal or Native businesses throughout Minnesota and also in other states. Soon after I became MMCDC’s President near the end of 2018, I also then became the White Earth Investment Initiative CEO. Our organizations are rather complex. We’ve got a number of products and services across a wide area, particularly because we’re rural organizations. We view our company first as a business that also is not for profit, meaning we don’t maximize profit, but we need some profit to support our work for us to be sustainable and continue helping communities and businesses grow, and improve the lives of individuals as our mission says. We need to ensure we have the financial strength to do so and to be able to add new programs and services when they’re needed.

NCN: You mentioned that your setup is a bit complex between MMCDC, the parent organization if you will, and then WEII, its subsidiary. Can you briefly describe the relationship between those two and how they work hand in glove?

Nelmark: Sure. MMCDC was started 51 years ago in the original wave of community development companies, and in that formation focused on seven counties in northwest Minnesota. The White Earth Reservation was included, and MMCDC found over the years that what works for most areas does not necessarily work on reservations. And so a strategic objective 20 years ago was set for MMCDC to invest $20 million over 20 years on the White Earth Reservation. Part of that strategy then was to form the White Earth Investment Initiative, so it was formed as a separate nonprofit. Both are 501(c)(3)s, and both have been federally certified as CDFIs, with the Initiative as a Native CDFI, as 80% of its board and half of its staff are Native Americans.

“CDFIs are mission-based lenders, and we have a lot of folks at federal agencies setting policies and programs for CDFIs that have never been lenders and don’t understand that aspect. Even more with Native CDFIs, many don’t understand Native people and their history, so they need to listen.”

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?

Nelmark: There are many, varied CDFIs focused on different areas throughout the country geographically and programmatically. Native CDFIs are needed to bring that special awareness of Native community needs. MMCDC realized years ago, as I mentioned, that what works elsewhere doesn’t necessarily work on reservations. And so with the formation of the Initiative for us, for example, it brought in a much deeper focus on understanding the Native community, working with focus groups, community engagement, getting to know people, establishing relationships. That perhaps is one of the biggest factors that for-profit companies don’t understand about the Native world – that we have to establish those relationships, get to know the communities, become part of them, and learn what their needs and desires are, not what we think they are.

NCN: What do policymakers, philanthropy, and the general public who aren’t familiar with Native CDFIs need to understand about them and the difference they make?

Nelmark: I think there is a more fundamental gap than just understanding Native CDFIs. Most people, including policymakers, don’t really understand Native Americans and their cultures, and even fewer understand the history and how reservations came to be. With about 80% of the U.S. population living in urban areas, rural reservations tend to be out of sight for most people. So policymakers need to learn about the people, the stories, visit the communities to see and then start to understand. They need to ask what is needed, not dictate. Not to sit in Washington, D.C. and say, “We think you need this.” Federal agencies are notoriously poor at directing programs they’ve never been a part of. CDFIs are mission-based lenders, and we have a lot of folks at federal agencies setting policies and programs for CDFIs that have never been lenders and don’t understand that aspect. Even more with Native CDFIs, many don’t understand Native people and their history, so they need to listen.

NCN: Tell us more about White Earth Investment Initiative. How does it work to foster prosperity in the Native communities it serves?

Nelmark: So the Initiative was formed with four of the five board members coming from the White Earth Nation. We still have one of those founding board members on the Initiative’s board, which provides a lot of background and experience at a somewhat higher level than staff, as well as tools, advice, and oversight. And then half of the staff are Native American from the White Earth area and another grew up on the reservation, although she’s not Native. That deep understanding of the community and belonging to a community is really how we get those relationships going, work at them, keep them going, ask questions, answer questions, and visit, learn, and listen to what the needs are. We provide several different services. Business lending helps to bring economic growth to Native-owned businesses on and off the reservation, helping to create jobs in the communities. Consumer lending helps individuals meet a range of their personal needs from $200 to $10,000. Free tax prep, or our VITA program, helps people access federal returns and credits, and we’re up to almost $1 million in refunds each year. And then financial counseling helps people to improve their personal financial strength with homebuyer education and helping them prepare to buy a home. All of this leads to asset building as people are ready for it and want it on their own terms and with a specialized focus on their particular situations and needs, while also working outside of the typical lending parameters.

NCN: WEII offers a wide range of products and services to its clients. While by all accounts all of them have positively moved the needle to one degree or another, is there one that you are particularly proud of and why?

Nelmark: Every one of our programs is essential to meeting the needs of the individual and the community as a whole. But I would say our lending flexibility. It helps provide access to funding that wouldn’t otherwise be possible, which tends to be primarily for individuals through consumer lending, who may have no or low credit scores. Also, our commercial lending for small businesses that often have low collateral and little working capital. These individuals are business owners that otherwise wouldn’t have access to that funding. It takes money to make money. Our lending staff, led by Audra Tonihka, work with and get to know our customers, they get to know us, and we build that experience and help them expand their opportunities over time.

NCN: WEII is celebrating its 20th anniversary this year, making it one of the country’s oldest Native CDFIs. What lessons can other, younger CDFIs learn from its two decades of experience serving Native communities?

WEII client Tracy McArthur purchased her first home from MMCDC and received Homebuyer Education from WEII. (Courtesy: MMCDC, WEII)

Nelmark: Native CDFIs are at a disadvantage just due to how young they are relative to others. A lot of the competitive funding opportunities require a track record of experience. If you’re playing with a field of companies who have been doing this for decades, it’s hard to break through. So it’s critical to learn from others. Take advantage of the expertise from other CDFIs, whether they be Native or non-Native, and soak that up. If we listen to ideas that worked for others and see how we can adapt them to our communities’ needs, we can get going much faster. The sharing at the Native CDFI Network, OFN [Opportunity Finance Network], the Oweesta conferences – those are all wonderful. They help build both the personal connections and provide more ideas, more things you can borrow. Plagiarism is okay in community development work! Learn from others’ successes and mistakes and see what might work in your organization. The broader CDFI community was in a similar place not so long ago, and they’re usually willing to provide ideas, mentoring, and support for newer CDFIs. It’s just a good reminder not to be afraid to go ask them for advice and mentoring. Many would be glad to provide it.

NCN: WEII has helped a great number of people. Is there an individual client success story that really sticks out to you, that really inspires you.

Nelmark: We had a really cool one that we featured in our annual report a few years ago. The company is called Bald Eagle Erectors and it is a Native-owned steel erection company that helped build the Vikings NFL stadium in Minneapolis. We had a time-lapse video of them putting up the steel for the stadium that we showed at our annual meeting that year. The owner credits the White Earth Investment Initiative for helping him reach his goals of owning his own office building and yard for his company. He’s now giving back to many other Native-owned businesses, helping to mentor them and connecting them to the Minnesota American Indian Chamber of Commerce and other groups he’s had success with. He’s now looking to transfer his company on to the next generation – some relatives, some workers – to help them build up their asset strength as well.

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?

Nelmark: Money’s an easy answer. But more specifically, technical assistance, including models and templates to quickly build critical expertise in terms of policy, lending, and other areas. That helps springboard these programs, getting them up and running much faster than they otherwise could. So technical assistance is a big part of it. Assistance with getting to scale through grant dollars for both operational support as well as loan capital, hopefully without too many compliance requirements. And then the freedom to carry out the work as the communities want and need it – not as someone far away thinks it should be done, which often seems to happen. We also need staff to build and grow the programs, which takes more money to fund them. We always need that support and we’re certainly working to get to a more self-sustainable level, but it takes some size, takes some scale to get there. In the meantime, we compete for grants and help fund our programs that way. The mentoring from more-established organizations is also helpful and that is available. But again, dollars are the biggest one.

To learn more about the White Earth Investment Initiative, please click here.