9               BANKING IN INDIAN COUNTRY:

        10                 EXPANDING THE HORIZONS


        12                     Speech Given by

        13               Attorney General Janet Reno




        17                    Renaissance Hotel

        18                 999 Ninth Street, N.W.

        19                    Washington, D.C.

        20                 Thursday, July 24, 1997




         1               P R O C E E D I N G S

         2               THE ATTORNEY-GENERAL:  Thank you very

         3     much, Gene.  When I first met the Comptroller,

         4     I thought that he was a banking type, a

         5     financial type, and it didn't take me long to

         6     learn that he cared more about people than any

         7     dollar that he'd ever made and that he has made

         8     clear that feeling in his work in the Office of

         9     Comptroller of the Currency.

        10               And I just want you to know how much

        11     I've appreciated the opportunity to work with

        12     you.  I also want to thank you for inviting the

        13     Department of Justice to co-sponsor this

        14     conference.  I was so excited when I first

        15     heard about it.  I think of the many activities

        16     that I've been involved in it's one of the most

        17     hopeful and really exciting initiatives that

        18     I've seen, and so I thank you all for being

        19     here today.

        20               I'm pleased to know that there are so

        21     many tribal leaders, banking industry

        22     representatives, and federal agency personnel,


         1     and I know that many of you have travelled a

         2     long way.  I hope it will be rewarding for you,

         3     and I hope it will be a useful conference.

         4               I'd like to focus my remarks on three

         5     areas:  One, tribal self-government; two,

         6     Indian lands, and economic development; and,

         7     three, fair lending.

         8               Before the first Europeans set foot

         9     on North American continent, this great land

        10     had been cherished and cultivated for countless

        11     generations by American Indians.

        12               You have no idea what it's like as a

        13     child to go to the Florida Keys, to go to a

        14     place where you think nobody's been before, to

        15     come around the corner of a high mound, and to

        16     reach down and pick up a piece of pottery that

        17     had been there for 1,000 years.

        18               It gives you a sense of reverence, a

        19     sense of awe, a sense of the great, great

        20     traditions of American Indians, whether they be

        21     on a mesa in the far West or on a small island

        22     in the Florida Keys at the top of a mound.


         1     They have established powerful civilizations

         2     and rich and thriving cultures.

         3               Today we recognize that American

         4     Indians were indeed the first environmentalists

         5     in this Nation who understood far better than

         6     we that air, water, and mother earth must be

         7     treated with respect and preserved for

         8     generations to come.

         9               As Chief Seattle of the Suquamish

        10     tribe stated so eloquently: Every part of the

        11     soil is sacred.  Every hillside, every valley,

        12     every plain, and grove has been hallowed by

        13     some sad or happy event in days long vanished.

        14     Even the rocks as they swelter in the sun

        15     along the silent shore thrill with memories of

        16     stirred events connected with the lives of my

        17     people."

        18               The lives of his people and of so

        19     many other tribes have been part and parcel of

        20     this land for so many, many years.  And thus,

        21     as European nations came to this country, they

        22     recognized Indian tribes as possessors of the


         1     soil and as self-governing nations.  They

         2     entered into treaties with tribes soon after

         3     they landed in America.

         4               Since the founding of our great

         5     Nation, the United States has recognized Indian

         6     tribes as domestic, dependent nations under the

         7     protection of the federal government.  Through

         8     hundreds of treaties and statutes, our Nation

         9     guaranteed the right of Indian tribes to

        10     self-government and dealt with tribes on a

        11     direct government-to-government basis.

        12               In 1787, the Continental Congress

        13     declared that: "The utmost good faith shall

        14     always be observed toward the Indians.  Their

        15     lands and property shall never be taken from

        16     them without their consent, and in their

        17     property rights and liberty they shall never be

        18     invaded or disturbed."

        19               History tells us that in a large part

        20     of our history we have strayed from these

        21     ideals.  But these great principles of

        22     government guide our dealings with tribes today,


         1     as evidenced by President Clinton's executive

         2     directive to federal departments and agencies

         3     to work with Indian tribes on a government-to-

         4     government basis concerning tribal

         5     self-government, treaty rights, and trust

         6     resources.

         7               In our Department of Justice policy

         8     on Indian sovereignty we pledge to support and

         9     assist Indian tribes in the development of

        10     their law enforcement systems, tribal courts,

        11     and traditional justice systems.  I learned

        12     long ago that tribes across America can tell us

        13     an awful lot about what we don't know about

        14     justice and how to establish systems of justice

        15     that not only focus blame but instead heal.

        16               The department provides appropriate

        17     support for tribal governments in litigation

        18     before the federal court, and we have tried to

        19     make that more understandable.  When I first

        20     came to Washington and saw the Department of

        21     Justice and all 107,000 people, I couldn't

        22     figure out what was where and who did you go to


         1     to get what.

         2               When I went to the listening

         3     conference in Albuquerque in May of 1994, the

         4     common complaint was, "I don't know who to talk

         5     to in the Department of Justice to have our

         6     Tribe's voice heard with respect to what your

         7     position should be in terms of litigation."  And

         8     so we created the Office of Tribal Justice to

         9     provide a really open door for all tribes so

        10     that they would have access and know where to

        11     go to have their voices heard as one sovereign

        12     to another.

        13               To help Indian tribes make their

        14     communities safer and better homes for their

        15     people we are also making available to the

        16     tribal governments our law enforcement and

        17     crime prevention programs, such as Stop Violence

        18     Against Indian Women Program and the Drug Court

        19     Program.

        20               Our Office of Policy Development has

        21     a Tribal Courts Partnership Project that

        22     increases opportunity for cooperation among


         1     federal, tribal, and state judges.  It serves

         2     to provide tribal courts with information about

         3     funding and technical assistance and develops

         4     innovative training for tribal judges.

         5               In all of our work, our goal is to

         6     assist tribal governments to take their

         7     rightful place in our Nation's family of

         8     governments and to help Indian communities

         9     secure safe, healthy, and productive lives for

        10     their family and for their children.

        11               The Department of the Treasury has

        12     also been active in working with Indian tribes.

        13     Treasury's Financial Crimes Enforcement Network

        14     has worked on a government-to-government basis

        15     with Indian tribes to assist them in

        16     understanding their responsibilities under the

        17     banking laws.

        18               Last year, the Internal Revenue

        19     Service published an Indian Assistance

        20     Handbook, recognizing the government status of

        21     Indian tribes.  It explains, "Tribal government

        22     power includes the authority to choose the form


         1     of tribal government, determine tribal

         2     membership, regulate tribal and individual

         3     property, levy taxes, establish courts, and

         4     maintain law and order."  Copies of that

         5     handbook are available today at the conference.

         6               Within the Department of Treasury the

         7     Comptroller of the Currency has taken a really

         8     important role in the leadership efforts with

         9     respect to Indian affairs.  I hope that his new

        10     guides to "Mortgage Lending in Indian Country"

        11     and "Providing Financial Services to Native

        12     Americans in Indian Country" will spur banking

        13     and investment.

        14               I'm very pleased to be here today

        15     because he has been so personally committed to

        16     this effort and to improving the availability

        17     of financial services in Indian country.

        18               Under our trust responsibility the

        19     federal government should take positive,

        20     proactive steps like this to support tribal

        21     self-government and economic self-sufficiency.

        22               But as I talk about some of the


         1     things that we have done, I feel a remorse

         2     because there is so much that is left to do.

         3     We still have tribes without adequate law

         4     enforcement.  We still have young people

         5     without adequate detention facilities that are

         6     focused on tribal traditions and that give a

         7     young person a chance to get off on the right

         8     foot after they've gotten into trouble.

         9               We still don't have adequate

        10     prevention programs, and so we must all

        11     rededicate ourselves to working together,

        12     sovereign to sovereign, to address these

        13     critical issues.

        14               Let me say a few words about Indian

        15     lands and reservation economies in that light,

        16     then.  In the 19th century, the United States

        17     entered into treaties which pledged to secure

        18     Indian reservations as "permanent homes" for

        19     Indian people.

        20               In some areas reservation lands

        21     remain largely in Indian ownership with title

        22     to the lands held by the United States.  But in


         1     other areas Indian reservations have non-Indian

         2     fee lands mixed in with their reservation

         3     lands.

         4               This is a result of the United States

         5     19th century Allotment Policy which divided

         6     tribal lands by issuing 160-acre parcels of

         7     lands to individual Indians and at time

         8     resulted in the sale of so-called "surplus

         9     lands."

        10               From 1887 until the passage of the

        11     Indian Reorganization Act in 1934, Indian

        12     tribes lost almost 100 million acres of land

        13     under the Allotment Policy.  Under the Indian

        14     Reorganization Act Policy, President

        15     Roosevelt's New Deal for Indians, Indian tribes

        16     may petition the Secretary of the Interior to

        17     acquire additional lands and trust status for

        18     them or for their people.

        19               And the Department of Justice

        20     recently defended the Secretary's authority to

        21     acquire Indian lands.  We recognize that

        22     reacquisition of land for Indian tribes and


         1     individuals may be necessary to assist tribes

         2     in rebuilding economies injured by large land

         3     loses under the Allotment Policy.

         4               Historically, lenders were reluctant

         5     to finance mortgages in Indian country because

         6     of the unique status of Indian trust lands.  But

         7     recently statutes have eased the requirements

         8     for mortgage lending in Indian country, and new

         9     federal programs seek to create a secondary

        10     market for Indian country mortgages.

        11               In the Indian Financing Act of 1974,

        12     Congress declared its policy to provide

        13     capital, to help develop and utilize Indian

        14     resources, both physical and human, to a point

        15     where the Indians will enjoy a standard of

        16     living from their own productive efforts

        17     comparable to that enjoyed by non-Indians in

        18     neighboring communities.

        19               Under this Act, a number of Indian

        20     tribes have made important and wonderful

        21     progress.  The Mississippi Band of the Choctaw

        22     have developed electronics, greeting card


         1     construction, and printing businesses, a

         2     shopping center, and a golf course.

         3               I understand that Chief Martin is

         4     here and that he will share his remarkable

         5     story with you this afternoon.  In another

         6     example, the Blackfeet Indian Tribe of Montana

         7     organized a bank to provide financial services

         8     to its reservation residents.

         9               Blackfeet National Bank makes housing

        10     and business development loans.  Eloise Cobell,

        11     who helped start the bank, advises other tribal

        12     leaders:  "Just do it.  Use the expertise that

        13     is available in the Indian country and do it."

        14     I'm happy that she's here today to share her

        15     expertise with you.

        16               The Indian Gaming Regulatory Act

        17     promotes "tribal economic development,

        18     self-sufficiency, and strong tribal

        19     governments."  Indian tribes use the

        20     governmental revenue derived from gaming for

        21     government purposes such as roads and water

        22     systems, hospitals, schools, law enforcement,


         1     and educational programs.

         2               Some tribes have achieved financial

         3     success through gaming.  A few of these tribes are

         4     wisely seeking to diversify their economies

         5     through banking and other endeavors.  And some

         6     tribes are seeking to reach out to non-gaming

         7     tribes to make sure that we build a strong

         8     economy throughout all of Indian country, and I

         9     commend them.

        10               Yet many American Indians and Alaska

        11     Natives continue to be among the poorest people

        12     in the nation.  That is inexcusable.  On some

        13     of the larger reservations BIA labor statistics

        14     indicate that unemployment reaches about 50

        15     percent of the Indian labor force.

        16               The 1990 Census reported that 43

        17     percent of American Indian and Alaska Native

        18     children under five years old fall below the

        19     poverty line.  The statistics make clear that

        20     we all need to work together to create banking,

        21     investment, and economic opportunity in Indian

        22     country.


         1               I look forward to a report from the

         2     Office of Tribal Justice on the lessons learned

         3     from all of you today and as to what we might

         4     be doing to advance the work that you do here

         5     today.

         6               Before closing, let me now turn to an

         7     issue which presents a challenge to all of us,

         8     lending discrimination.  Federal law prohibits

         9     lending discrimination based on race or

        10     national origin, among other reasons, by the

        11     federal, state, and local governments, or

        12     individuals.

        13               This protection extends to American

        14     Indians and other minorities in voting,

        15     education, housing, credit, public

        16     accommodations, and employment.  The existence

        17     of the federal trust responsibility towards

        18     Indian tribes does not diminish the obligations

        19     of state and local governments to respect the

        20     civil rights of Indian people.

        21               Every community needs fair access to

        22     credit, including American Indian communities.


         1     Indeed, credit is crucial to Indian tribes

         2     because, as we have discussed, the need for

         3     economic development is so great in Indian

         4     country.  For the last several years the

         5     Department of Justice Civil Rights Division has worked
         6     closely with banking regulatory agencies, such

         7     as the Office of Comptroller of the Currency,

         8     in vigorously enforcing the fair lending laws.

         9               For example, in 1995, the Office of

        10     the Comptroller referred a lending

        11     discrimination case to our Civil Rights

        12     Division concerning a bank in Nebraska that

        13     served the Pine Ridge Indian Reservation.  As

        14     a result of this referral and further

        15     investigation, the Civil Rights Division

        16     brought a fair lending suit against this bank

        17     in 1996.

        18               One example is helpful in

        19     illustrating the type of discrimination alleged

        20     in this case.  An Indian professional who

        21     worked for the tribe and was paying his loan

        22     through a well established payroll deduction


         1     plan was charged 16 percent interest by the

         2     bank.

         3               A similar loan to a non-Indian who

         4     had a credit history that included over 50

         5     bounced checks required only an 11-percent rate

         6     of interest.  This case was successfully

         7     concluded in May of this year with the entry of

         8     a consent decree by the court, which will help

         9     protect the ability of Indian people to gain

        10     credit and economic opportunity.

        11               Under the settlement, monetary relief

        12     of $275,000 will be provided to Native

        13     Americans.  $175,000 for a fund that will

        14     compensate victims of discrimination and

        15     $100,000 which will be used to pay for loan

        16     application fees for Native Americans in the

        17     future.

        18               In addition, the bank will develop

        19     credit-related education programs on the

        20     reservation and recruit qualified tribal

        21     members to work at the bank.  This settlement

        22     is important because it send a message to the


         1     banks and their customers that everyone should

         2     be treated fairly when seeking a loan.

         3               As bankers and as tribal leaders, I

         4     hope that all of you will work together to

         5     ensure that the spirit of the fair lending laws

         6     is honored.  I have been so impressed with the

         7     opportunity to work with bankers over these

         8     four years.  I don't think I've met a banker

         9     that in any way would condone discrimination.

        10               What has impressed me more is the

        11     willingness of these bankers to look hard at

        12     what they're doing to make sure that there is

        13     no subtle or accidental or unappreciated

        14     discrimination within their marketing, within

        15     all the processes of lending that they engage

        16     in.

        17               And I would urge all of you today to

        18     reconsider what you do, and to make sure that

        19     we are as fair as possible in our lending

        20     practices.

        21               In closing, let me leave you with a

        22     thought.  Chief Joseph of the Nez-Perc‚ tribe


         1     once said, "Give all the people an even chance

         2     to live and grow.  All people were made by the

         3     same Great Spirit.  They are all brothers and

         4     sisters.  The earth is our mother, and her

         5     people should have equal rights."

         6               When you consider our Nation's

         7     enduring commitment to liberty and justice,

         8     remember American Indian people and their

         9     passionate desire for liberty and for

        10     self-government in their own lands.  Also

        11     remember that in every tribe, every pueblo, and

        12     every native village there are Indian veterans

        13     who put their lives on the line for the United

        14     States of America.

        15               Think about those tribal lands that

        16     you have visited or that you are from.  They

        17     represent the land, the water, and the air that

        18     you have taught us to cherish.  Think about

        19     your tribal traditions of justice.  They

        20     represent a spirit of healing, and not of

        21     division, that can be such a vital force in the

        22     years to come in this Nation.


         1               And with conferences like this and

         2     all you do, whether it be as a banker, as a

         3     tribal leader, as a federal employee who cares,

         4     let us see what we can learn from the wonderful

         5     people who have inhabited this continent for

         6     thousands of years to make this world a better

         7     place in the next thousand years to come.

         8                    (Whereupon, the transcribed

         9                    PROCEEDINGS were adjourned.)

        10                      *  *  *  *  *