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An Agenda Banks on Weed

Everyone, as they say, has an agenda.

Everyone—the president, the Congress, and politicos of all stripes—tries to look good, regardless of party.

Governmental regulators (who also have political agendas) want to secure the highest possible profile for their efforts. They want to go after the predetermined “bad guys” they’ve already formulated a bias against and make a name for themselves.

Federal recognized American Indian tribal governments, too, have an agenda—to exercise the inherent rights of self-governance and self-determination. The federal government has respected their Constitutional mandate to support our sovereignty and has long supported our right to self-govern.

Exercising our rights of Self-determination, on the other hand, is difficult. While the federal government respects our sovereignty, our federal funding streams have been steadily eroding for the past 30 years. As a result of geography and isolation, tribal governments are often cut off from economic development engines needed to support ourselves.

As federal funding shrinks and land-based economic development opportunities remain limited, several tribal governments have been innovative and have tapped into the Internet as a means of economic development. It is well known that the Internet can connect isolated communities with the rest of the world and it has proven to be the great equalizer across Indian country. Specifically, through online lending enterprises, operating according to tribal law and regulated by tribal regulatory entities, these tribal governments have tapped a new source of revenue to assist in driving our economies forward.

As with past economic development success in Indian country, our industry seems to be attracting the attention of regulators who assert jurisdiction even though our members’ enterprises are legal businesses that operate lawfully and voluntarily comply with federal consumer laws. Further, the federal government acknowledges a need for these products and is now suggesting that the United States Postal Service is the best way to offer these products to consumers.

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Tribal governments are often charged with educating non-tribal governments about our rights and jurisdiction. When tribal governments began to offer gaming as a means for economic development, various state governments tried to thwart our efforts in order to maintain their monopolies. Today, almost every state in the country has legalized commercial gaming. Tribal governments brought gaming into local communities and helped demonstrate that gaming is a legitimate means of economic development when it is well regulated and part of a larger employment and reinvestment strategy.

Similarly, tribes today continue to experience scrutiny in our lending enterprises in spite of the fact that the Dodd-Frank Act equates tribes with states for regulatory purposes. In spite of this clear mandate, federal regulators continue to pressure our banking partners to cease doing business with us. That is why our tribal members were shocked by the recent announcement of new guidelines, released by the Treasury Department and a top Justice Department official, to allow banks to work more closely with legal, regulated, marijuana-related businesses. 

Deputy Attorney General James Cole made no qualms in giving his blessing to allow dispensaries access to the banking and ACH system without the threat of prosecution. A key argument in this decision to allow the previously-illicit businesses access to the financial system is that they are protected by state law, which legalized them through duly-enacted acts passed by the legislatures and signed into law by governors.

We are shocked that our tribal business operate pursuant to federal and tribal law and are being denied access to the banking and ACH systems we need while the businesses in two states that violate federal law are being granted guidelines to operate in that very same system.

While the marijuana issue is and will continue to be up for debate, this inconsistent legal treatment of the banks participating in these two industries should not. Tribes deserve a clear answer from the federal government with regard to why we are being denied access to banking and ACH partners. This time, it is the federal government—through the US Post Office—that sees us as a competitor. We have come to expect competition from states but not from our so-called federal partners.

As the federal government cuts our funding and increasingly forces our members into cycles of poverty and dependence, they undermine our long-held rights to self-government and self-determination and undercut the very principles of sovereignty. Gaming was one pathway toward economic benefits, but it was not a panacea. Just as we partnered with federal and state governments to show that our gaming enterprises are lawful and well regulated, we can do the same with our lending businesses. At the very least, tribes – and all consumers – deserve better than biased treatment that allows truly illicit businesses access to the banking system while denying legitimate Native businesses.

Barry Brandon, a citizen of the Muscogee (Creek) Nation, serves as the Executive Director of the Native American Financial Services Association (NAFSA), bringing a wealth of experience in Native American law and policy to the the organization. He has served for more than two decades as a litigator, corporate executive, policy strategist, and regulatory advisor, making him a highly-regarded authority on legal and policy matters regarding Indian country.