Legal settlements in Indian Country prompt revival of Native Financial Education Coalition

What should you do if, after a lengthy legal battle, you suddenly receive a $1,000 settlement? Should you spend it all—either on something long-lasting, like a household appliance, or something fleeting, like a vacation? Use it to pay bills? Save it for a rainy day? Add it to a retirement fund? Maybe some of each? How would your answer change if you got $10,000? How about $50,000?

Tens of thousands of Native American individuals have recently been asking themselves these questions, after many separate, long-running lawsuits brought against the federal government by Native individuals and dozens of tribes all began to disburse settlement payments in 2012. (For specifics on the lawsuits, see the sidebar below.) Payments to individuals range from hundreds of dollars to, in some cases, at least $50,000. Many of the settlement checks were distributed in late 2012 and most of the remainder will flow out in 2013.

This flow of cash raised not only the personal finance questions listed above but also issues stemming from the fact that most reservation communities have limited banking services and few sources of tax and investment advice. By spring 2012, the National Congress of American Indians (NCAI), a leading nonprofit educational and advocacy organization serving American Indian tribes and communities, saw that predatory scams aimed at payment recipients could be a looming problem and decided to take action.

As Jacqueline Johnson Pata, NCAI’s executive director, puts it, “So much money hitting tribal communities around the same time meant that there was a critical need to get information out to our leaders and our people—to raise awareness and to help protect them.”

In response to the immediate concerns, NCAI, with assistance from the Federal Trade Commission and Consumer Financial Protection Bureau, sent basic financial, tax, and consumer protection information to tribes and recipients ahead of or with the settlement checks. This work, which NCAI named the Protect Native Money campaign (www.ncai.org/protectnativemoney), continues in 2013 as needed.

The challenge of getting the information out quickly was eased by the legacy of the Native Financial Education Coalition (NFEC), an organization that had been dormant for the last few years. The NFEC was born late in the Clinton Administration as part of an initiative promoting financial education in communities of color. According to Sherry Salway Black, former NFEC chair and current director of the NCAI initiative that took the lead on the Protect Native Money campaign, “During the 2000s, the NFEC helped raise awareness about the importance of financial education and built a strong network that still exists.” However, by 2009, a series of organizational changes and pressures related to the Great Recession reduced the NFEC to inactivity.

To get its information out to settlement recipients quickly in 2012–2013, the NCAI used NFEC’s records to reactivate the coalition’s network of individuals and organizations. While organizing the Protect Native Money Campaign, NCAI also started an outreach effort to revive the NFEC, in the hopes of reinstating the coalition as a valuable partner for raising financial awareness in Indian Country. Working with many people and organizations key to NFEC’s earlier success, NCAI organized three meetings of interested individuals representing tribes, Native and non-Native financial education organizations, financial institutions, government programs, and more. NCAI’s Sherry Salway Black is leading this effort, too.

“People who had been part of NFEC in the past are so excited and eager about a renewed effort to activate the coalition,” she notes. “And every day I hear from new people who want to be involved going forward.”

Now that the immediate settlement payment issues are winding down, Salway Black wants to focus on long-term financial capability in Indian Country and sees the NFEC as integral to that effort. As a first step in designing a long-term plan for sustaining the coalition, in February NCAI convened a working group of volunteers to craft an NFEC agenda, develop an operating structure, and plan efforts for Financial Education Month in April.

Individuals and organizations with an interest in promoting financial knowledge and capacity in Native communities are welcome to join the resurgent NFEC. To sign up to receive news and information about the coalition’s revival, e-mail your name, organization name, and contact information to nfec@ncai.org.

Leslie Wheelock serves as director of economic policy at NCAI.