The Next Frontier for Expanding Tribal Sovereignty
By J.D. Colbert
Gregory Guedel uses the term “sovereignty event” in his many legal articles. He defines that term as “an act taken by a tribe that results in the development of new resources for the tribal community.”
A sovereignty event offers a clear point in time for comparing before-and-after performance of measurable economic development indicators. Examples of sovereignty events include tribes signing a compact with the U.S. or a state government, winning a lawsuit to confirm sovereignty rights or creating a unique sovereign enterprise.
The idea of a tribally chartered bank is a unique sovereign enterprise. A tribally chartered bank is a sovereignty event. It is the next frontier for tribes who wish to expand tribal sovereignty into the realm of banking and financial services.
A tribally chartered bank is merely the next step in the evolutionary expansion of tribal sovereignty. It wasn’t long ago that the idea of tribes conducting Class III gaming or issuing license plates to tribal members seemed far-fetched. Yet today, we take such tribal rights for granted. Viewed in this historical context, the right of tribes to issue banking charters is a tantalizing possibility.
Moreover, we have legal and historic precedence to further undergird such tribal rights. In 1895, the Muscogee (Creek) Nation issued a banking charter to Tulsa Banking Company. Tulsa Banking Company was a dominant force in financing the development of Tulsa, Oklahoma.
The process of establishing a tribally chartered bank is fairly straightforward. The first step is to adopt a banking code. This tribal banking code could look like any of the state banking codes. The tribe would then establish an independent regulatory body, the Tribal Banking Commission, to regulate and examine any bank that it charters.
The key next step is to negotiate a banking compact with state and federal bank regulatory authorities. This is paramount because any tribally chartered bank must be a fully accredited member of the U.S. and worldwide banking community. The tribal bank must be compliant with federal bank laws.
There are many advantages of a tribally chartered bank. These include providing banking services to areas of emerging lawful commerce such as online gaming and cannabis. Tribes have the opportunity to earn significant revenues while boosting economic development and job creation.
I strongly urge tribes to consider creating a new sovereignty event by exercising your right to charter banks. It is the next frontier of tribal sovereignty.
JD Colbert has a 40-year banking and finance career and was the first ever Native American federal bank examiner. He has served on the boards of five banks and served as president of two banks, including Native American Bank, where he was also CEO. He has been a financial advisor in the formation of a number of tribally owned banks. He is currently a candidate for Congress and president and CEO of Holisso Hakv Inc., www.holissohakv.com, a banking and mergers and acquisitions financial advisory firm. Colbert may be contacted at 469-359-7008 (office), 918-758-8050 (cell) or firstname.lastname@example.org.