"Native American Entrepreneurs"-Bank2
Monday, April 27, 2009SUSIE GHARIB: The PBS prime-time program "American Experience" continues its look at U.S history from the Native American perspective. As part of "We Shall Remain," NIGHTLY BUSINESS REPORT is profiling Native American entrepreneurs. Tonight, we look at the Chickasaw tribe's Bank2. As we wrap up our series "Native American Entrepreneurs," Jeff Yastine says Bank2 is successfully doing something many banks have given up on: writing home loans.
JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Beverly Stephens is navigating the troubled landscape of the real estate market, buying this three bedroom fixer upper in an Oklahoma City suburb. Her mortgage came from Bank2, a financial institution unknown to many people, but not to a growing number of Native Americans.
BEVERLY STEPHENS, BANK2 MORTGAGE CUSTOMER: For me I think it's very important. And I like to do business with my tribe and knowing that Bank2 is a Chickasaw bank and it makes me feel good that I can help support them and they are helping support me.
YASTINE: That's right. Bank2, headquartered in Oklahoma City, is owned by one Native American tribe, the Chickasaw nation. The tribe's seat of government is about 90 minutes away on tribal lands in Ada, Oklahoma. CEO Ross Hill has guided Bank2 since it opened its doors nine years ago.
ROSS HILL, CEO, BANK2: It's in its beginning stages of success. I think the future is really bright for Bank2 and it's all predicated on our desire to serve certain niches, more than anything else.
YASTINE: One big niche, home mortgages for Native Americans both on reservations and off. Bank President Rod Whitson sees that as a major road for growth.
ROD WHITSON, PRESIDENT, BANK2: The reality is that market, because the tribes are doing so well economically, that market is growing rapidly. So the tribes are very interested in getting these people into homes as well, too. So that market is expanding as the economics of the tribes get better. So a lot of Native Americans are getting homes right now.
YASTINE: That's not as easy as it sounds. Much of the land on reservations is held in trust by the Federal government and that land is considered the sovereign territory of the tribe. Both those factors tend to scare away traditional home mortgage lenders. But not Bank2, which now writes mortgages for Native Americans in 37 states.
WHITSON: To loan in Native America, you have to be flexible. Every tribe has a little bit different situation. Loaning money on tribal trust land is a little bit different and so we understand that niche really well. We understand how the tribes work. We understand how the economics of it work so we're actually able to lend into that market.
YASTINE: The economics of it also help Bank2 avoid foreclosures, a huge problem nationwide, but not when it comes to Native Americans. The majority of home mortgages to Native Americans are written through a Federally administered program, HUD-184. The delinquency rate is about 1 percent, compared more than 7 percent for the broader U.S. population.
WHITSON: Everything you're seeing in the national market with the high foreclosure rates, it's not happening in Native America. We've seen a market contract and the number of mortgages contract. It's not happening. The number of Native American mortgages is actually expanding. So it's a rapidly growing niche for us.
YASTINE: A niche that includes Chickasaws like Beverly Stephens and four million Native Americans and Native Alaskans seeking financing for a home.
STEPHENS: I'm very proud of my tribe and I like to do business with them.
YASTINE: Jeff Yastine, NIGHTLY BUSINESS REPORT, Oklahoma City.
GHARIB: For more information about Native American entrepreneurs, check out our web site at pbs.org. "We Shall Remain" continues tonight on "American Experience" here on PBS. Check your local listings
