Community Dividend

Model tribal commercial code completed

Published September 1, 2005  | September 2005 issue

After four years of drafting, the National Conference of Commissioners on Uniform State Laws (NCCUSL) has completed its Model Tribal Secured Transactions Act, or Model Tribal Act (MTA), and accompanying Implementation Guide and Commentary. The MTA was created to provide a legal framework for secured transactions on American Indian reservations.

The term "secured transactions" refers to agreements that involve giving property as collateral for loans or other financing arrangements. Examples include bank loans for business start-ups, consumer or business revolving lines of credit, or auto loan financing. Many tribes lack sufficient laws governing secured transactions, which limits access to affordable credit for tribal consumers, tribally owned businesses and private businesses within tribal jurisdictions. The situation can hinder tribes' economic development efforts.

The purpose of the MTA is to provide model legislation for tribes to build sound legal infrastructures that will facilitate transactions with outside lenders and businesses. To ensure consistency among various tribal and state jurisdictions, the MTA was designed to be compatible with Article 9 of the Uniform Commercial Code, which governs secured transactions in all 50 states.

A committee of NCCUSL commissioners drafted the MTA, with participation from representatives of 10 American Indian tribes, several California rancherias and the Federal Reserve Bank of Minneapolis. Additionally, a task force of committee members and advisors prepared the Implementation Guide and Commentary. Sue Woodrow, the Minneapolis Fed's Community Affairs Managing Project Director, chaired the task force. (For more information on secured transactions and the purpose of the MTA, see Woodrow's 2004 article "Secured Transaction Codes: An Important Tool for Tribal Economic Development."

To access the MTA and accompanying materials, visit and click on "Final Acts & Legislation."