Indian Issues: Agricultural Credit Needs and Barriers to Lending on Tribal Lands

About 46 million of the 56 million acres of the land that the federal government holds in trust for the benefit of Indian tribes and their members has an agricultural purpose. However, tribal agriculture and economic development experts have noted that Indian tribes and their members may need improved access to agricultural credit.

Congress included a provision in statute for GAO to review the ability of FCS to meet the agricultural credit needs of Indian tribes and their members on tribal lands. This report describes (1) what is known about the agricultural credit needs of Indian tribes and their members, (2) barriers stakeholders identified to agricultural credit on tribal lands, (3) FCS authority and actions to meet those agricultural credit needs, and (4) stakeholder suggestions for improving Indians' access to agricultural credit on tribal lands.

GAO explored potential data sources on Indians' agricultural credit needs, conducted a literature review, and reviewed statutes and regulations governing tribal lands and FCS. GAO also reviewed the marketing plans and written responses of a nongeneralizable sample of 11 FCS associations whose territories included tribal lands with high levels of agricultural activity. GAO interviewed stakeholders from a sample of seven tribes (generally selected based on tribal region and agricultural activity), experts in tribal agriculture and economic development (selected based on relevant publications, Congressional testimonies, and others' recommendations), and representatives from FCS and its regulator, the Farm Credit Administration, and other relevant government agencies.

Limited data are available on the needs of Indian tribes and their members for agricultural credit, such as operating or equipment loans, to develop and expand agricultural businesses on tribal lands. Federal regulations have generally prohibited lenders from inquiring about the personal characteristics, such as race, of applicants on nonresidential loans. Some tribal stakeholders and experts said that tribal members may not have applied for agricultural credit because they heard of other tribal members being denied loans. They said that tribal members likely obtain agricultural credit from Department of Agriculture programs or tribal lenders. Another potential source of agricultural credit is the Farm Credit System (FCS), a government-sponsored enterprise that includes 69 associations that lend to farmers and ranchers.

Tribal stakeholders and experts reported a general lack of commercial credit on tribal lands due to the following factors:

Land use restrictions. Most tribal lands only can be used as loan collateral in certain circumstances or with federal permission.

Administrative process delays. Tribal members reported often encountering delays obtaining necessary federal loan documents.

Legal challenges. Lenders reported concerns about their ability to recover loan collateral due to the unique legal status of tribes.

Loan readiness. Tribal members may have no or poor credit histories and be unfamiliar with the paperwork required for an agricultural loan, such as a business plan.

FCS is authorized to provide a range of credit services to eligible agricultural producers, which may include Indian tribes, tribal businesses, and tribal members. FCS associations must obtain land as collateral for long-term real estate loans, but are not required to do so for shorter-term loans, such as for operating costs or equipment purchases. Some FCS associations GAO contacted reported making loans to Indian tribes or their members. In a sample of 11 FCS associations with tribal lands in their territory, eight said they have loaned to tribes or their members in the past 2 years. GAO's review of these 11 associations' marketing plans and written responses to GAO follow-up questions found that seven noted outreach—such as support for agricultural education activities—targeted to tribes and their members. The other four reported broad and general outreach efforts that also included minority groups.

To improve access to agricultural credit on tribal lands, stakeholders discussed several options. For example, some stakeholders discussed the potential for partnerships between commercial or government lenders and tribal lenders (such as Native Community Development Financial Institutions) and increased use of loan guarantees. Some stakeholders also discussed actions tribes could take to ease barriers to lending, such as adopting their own leasing procedures to reduce administrative processing time with federal agencies for certain loans.

Approximately 46 million acres of the 56 million acres the federal  government holds in trust for the benefit of Indian tribes and their  members has an agricultural purpose, according to the Department of the  Interior’s (Interior) Bureau of Indian Affairs (BIA). Agricultural activity on  tribal lands can include farming, ranching, aquaculture, and other  agribusinesses. Tribal agriculture and economic development experts  have noted that Indian tribes and their members may need improved  access to agricultural credit, such as operating or equipment loans, to  develop and expand agricultural businesses on tribal lands. One source of agricultural credit is the Farm Credit System (FCS), a national network  of customer-owned lending institutions.

The Agricultural Improvement Act of 2018 included a provision for us to  study the agricultural credit needs of Indian tribes and their members on  tribal lands, and FCS institutions’ authority and resources to meet those  needs. This report describes (1) what is known about the agricultural  credit needs of Indian tribes and their members on tribal lands, (2) the  barriers stakeholders and experts identified that Indian tribes and their  members on tribal lands face in obtaining agricultural credit to meet their  needs, (3) FCS’s lending authority and lending and outreach activities on  tribal land, and (4) suggestions stakeholders have discussed to improve  access to agricultural credit on tribal lands.

To address all the objectives, we reviewed relevant federal statutes,  regulations, and other legal documentation. We interviewed officials from  the Farm Credit Administration (FCA), BIA, the Department of Agriculture  (USDA), and FCS’s trade association, the Farm Credit Council. We  interviewed experts on tribal agriculture and economic development from  advocacy groups and academia, selected based on relevant publications,  testimonies before Congress, or recommendations from other experts in  these fields. Throughout this report, we refer to them as experts.

We also interviewed stakeholders associated with seven selected tribes.  We first selected six tribes from locations in different regions (Great  Plains, Rocky Mountain, Northwest, Southwest) and one state  (Oklahoma). Within these regions, the selected tribes were those with  generally large tribal land areas with high levels of agricultural activity, as  indicated by the USDA 2012 Census of Agriculture data. Four of the six  tribes we contacted to request interviews provided us with various  contacts. As a result, for four tribes, we interviewed tribal agriculture  department employees, tribal farm employees, or representatives of the  Native Community Development Financial Institution (Native CDFI)  serving the tribe. We then selected three additional tribes based on  USDA data or recommendations from experts we interviewed. For these  three tribes, we interviewed employees of tribal farms or representatives  of Native CDFIs or community development corporations. Throughout this  report, we refer to tribal government employees, tribal farm employees, or  representatives of Native CDFIs or community development corporations  serving a tribe as tribal stakeholders. Although the information we  obtained from the tribal agriculture department employees allowed us to  provide anecdotal tribal perspectives, it is not generalizable to the 573  federally recognized Indian tribes. The views of tribal farm employees and  Native CDFI and community development corporation representatives  also cannot be generalized to tribes but illustrate views on needs,  barriers, and other issues from the perspectives of the organizations.

To address the first objective on agricultural credit needs, we also  reviewed federal data sources and federal regulations related to collecting  data on loan applicants’ personal characteristics for nonresidential loans.

To supplement the limited data and provide additional information for the  second objective on barriers to obtaining agricultural credit, we conducted  a review of literature from government and academic reports and  identified additional materials through citations in literature we reviewed.

To collect information for the third objective, we reviewed the marketing  plans of a nongeneralizable sample of 11 FCS associations whose  territories included large tribal land areas with high levels of agricultural  activity. We also obtained written responses from the 11 associations to a  series of questions we posed about their lending and outreach to tribes  and their members and any challenges in making loans involving tribal  lands. For more information on our scope and methodology, see  appendix I.

We conducted this performance audit from December 2018 to May 2019  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

As of May 2019, the federal government recognized 573 Indian tribes as  distinct, independent political communities with certain powers of  sovereignty and self-government, including power over their territory and  members. The tribes can vary greatly in terms of their culture, language,  population size, land base, location, and economic status. As of the 2010  U.S. Census, about 21 percent, or 1.1 million, of all American Indians  lived on tribal lands.

Tribal lands include many land types (see table 1). According to BIA, the  federal government holds about 46 million acres in trust for tribes (tribal  trust land) and more than 10 million acres in trust for individual Indians  (individual trust land).

Some tribes also have reservations. According to BIA, there are  approximately 326 Indian land areas in the United States administered as  federal Indian reservations (including reservations, pueblos, rancherias,  missions, villages, and communities). The land within the reservation may  include a mixture of tribal trust land, individual trust land, restricted fee  land, allotments, and land without trust or restricted status (that is, fee- simple land), which may be owned by tribes, individual Indians, or non- Indians.

Agricultural producers (farmers, ranchers, or producers or harvesters of  aquatic products) on tribal lands can be individual tribal members, the  tribe itself, or non-Indians who lease the land from the tribe or Indian  owner. According to USDA’s 2012 Census of Agriculture, about 75  percent of farms and ranches on 76 selected Indian reservations were  operated by agricultural producers that identified as American Indian or  Alaska Native (see table 2). On these reservations, Indian producers  held 61 percent of total farm and ranch acreage. However, the total  market value of agricultural products sold from Indian-operated farms and  ranches was just over a tenth of that of non-Indian operated farms and  ranches on the 76 selected reservations.

In 2011, USDA, which operates several agricultural programs targeted to  traditionally underserved populations, settled a class action lawsuit  brought by Native American farmers and ranchers for $760 million  (Keepseagle v. Vilsack). The lawsuit alleged that USDA discriminated  against Native Americans in its farm loan and farm loan servicing  programs. In 2018, $266 million of the remaining settlement proceeds  were used to establish the Native American Agriculture Fund. The Fund  will begin awarding grants in 2019 to fund the provision of business  assistance, agricultural education, technical support, and advocacy  services to Native American farmers and ranchers.

Agricultural Credit and the Farm Credit System

Like other businesses, agricultural producers generally require financing  to acquire, maintain, or expand their farms, ranches, or agribusinesses.  Types of agricultural loans as categorized by their purpose or maturity  may vary by lender but generally include the following:

Short-term loans. These loans are used for operating expenses and  match the length and anticipated production value of the operating or  production cycle. They are typically secured by the product (crops or  livestock).

Intermediate-term loans. These loans are typically used to finance  depreciable assets such as equipment, which serves as the loan  collateral. The loan terms usually range from 18 months to 10 years.

Long-term loans. These loans are used to acquire, construct, and  develop land and buildings with terms longer than 10 years. They are  secured by real estate and may be called real estate loans.

Several types of lenders provide credit to U.S. agricultural producers.  According to USDA’s Economic Research Service, in 2017, FCS and  commercial banks provided most agricultural credit in the United States,  with respective market shares of 40 and 41 percent. USDA’s Farm  Service Agency—a lender that focuses on assistance to beginning and  underserved farmers and ranchers and also guarantees the repayment of  loans made by other lenders—provided 3 percent, and the remainder was  provided by individuals, life insurance companies, and other lenders.

FCS is a government-sponsored enterprise, established in 1916 to  provide sound, adequate, and constructive credit to American farmers  and ranchers. FCS is regulated by FCA, an independent federal agency.

FCS’s statutory mission includes being responsive to the needs of all  types of creditworthy agricultural producers, and in particular, young,  beginning, and small farmers and ranchers. According to FCA, FCS is  not statutorily mandated to focus on providing financial opportunities to  any other group.

FCS lends money to eligible agricultural producers primarily through its  69 lending associations (FCS associations), which are funded by its four  banks (FCS banks). All are cooperatives, meaning that FCS borrowers  have ownership and control over the organizations. As of 2017, FCS had  approximately $259 billion in loans outstanding, of which 46 percent were  long-term real estate-based loans; 20 percent were short- and  intermediate-term loans (such as for farm equipment or advance  purchases of production inputs); and 16 percent were for agribusiness  activities, such as agricultural processing and marketing.

FCS associations are not evaluated under the Community Reinvestment  Act, which requires certain federal banking regulators to assess whether  financial institutions they supervise are meeting the credit needs of the  local communities. FCS receives certain tax exemptions at the federal,  state, and local level.

Limited Data Are Available on Agricultural Credit Needs of Indian Tribes and Their Members

Data on Agricultural Credit Needs for Tribes and Their Members Are Limited

Little data exists on the credit needs of tribes and their members. One  measure of unmet credit needs is the difference between the amount  applied for and the amount received. However, we could not determine  the amount of agricultural credit that Indian tribes and their members  applied for or received. These data were limited in part because federal  regulations historically have prohibited lenders from asking about the race  of applicants for nonresidential loans, including agricultural loans.

Additionally, even if data were available, the unmet need could be greater  than that indicated by information on those who may have applied for and  did not receive credit. Four tribal stakeholders and experts told us that  tribal members may choose not to apply for agricultural credit because  they were directly discouraged by loan officers, had problems completing  paperwork, or had heard of other tribal members being denied loans.

Two tribal agricultural experts told us that on some level, the agricultural  credit needs of Indian tribes and their members are the same as other  agricultural producers’ credit needs. In particular, tribal stakeholders and  experts told us that the tribal members need short-term loans for  operating expenses and intermediate-term loans for equipment. One  difference between the agricultural credit needs of tribal members and  other producers is that tribal members may have a greater unmet need  for long-term loans, which are typically secured by real estate, because of  difficulties in using tribal lands as collateral, as discussed later in this  report.

Credit needs vary based on the type of operation or borrower.

Type of operation. Some tribal stakeholders we interviewed told us  that members of their tribes were more likely to participate in ranching  than farming, partly because farming has higher start-up costs. For  example, one tribal agricultural expert told us a rancher can start with  a few head of cattle and grow the herd over time, but a beginning  farmer may need to purchase equipment. Additionally, several tribal  stakeholders told us that land on their reservations was more suitable  for ranching than farming.

Type of borrower. Some tribes have agricultural businesses, which  have credit needs different from those of individual tribal members,  according to experts and BIA officials we interviewed. For example,  they may be greater or more complex. According to an expert and a  tribal stakeholder, established agricultural businesses likely would be  able to receive credit from commercial lenders because they have  more resources to pledge as collateral or stronger credit histories.  Additionally, if a tribe has other profitable businesses, it likely will have  less difficulty obtaining credit or financing agriculture with those other  resources than those without such resources.

According to tribal stakeholders, experts, and BIA officials we interviewed,  tribal members who obtain agricultural credit likely receive it from USDA’s  Farm Service Agency, other USDA programs, or Native CDFIs. Some  tribal members receive agricultural credit from local private lenders, but  they are typically larger, more established borrowers. One expert told us  that tribal members who are smaller or beginning agricultural producers  and cannot access commercial banks instead may borrow money from  family members. A 2017 report found that Native business owners were  less likely than other business owners to obtain start-up capital from  banks.

Some experts we interviewed cited Native CDFIs as growing providers of  agricultural credit to tribal members. A 2014 survey of 41 Native CDFIs— credit unions, community banks, and loan funds—found more than 40  percent provided credit and training to farmers and ranchers. In total,  these CDFIs made almost $6 million in agricultural loans annually.  However, Native CDFIs are limited in how much agricultural credit they  can provide. In the 2014 survey, 56 percent of the Native CDFIs that  made agricultural loans reported not having enough capital for such  loans, with a total unmet need of at least $3 million in the previous year.  One Native CDFI we interviewed said its agricultural loans averaged  about $100,000 per borrower, and another said its operating loans were  about $50,000–$75,000 and its intermediate-term loans about $100,000.

Stakeholders See Potential for Growth of Agricultural Activity on Tribal Lands That Could Require Access to Credit

Selected literature we reviewed and interviews with some tribal  stakeholders found that tribes have a growing interest in agriculture,  motivated by concerns over tribal members’ access to food, health, and  employment opportunities.

Food access. A 2014 USDA study found that about 26 percent of  individuals in tribal areas lived within 1 mile of a supermarket,  compared to about 59 percent of all Americans.

Health. According to the Centers for Disease Control and Prevention,  American Indians and Alaska Natives have higher rates of obesity and  diabetes than white Americans.

Employment. A 2014 Interior report found that, on average, only  about 50 percent of Native American adults in tribal statistical areas  were employed either full or part-time.

Two commissioned reports on tribal agriculture say that Indian tribes’ vast  land base represents an untapped opportunity for tribes to increase  agricultural production, including growing their own healthful foods and  economic development. But, as previously discussed, for reservations  featured in USDA’s 2012 Census of Agriculture, non-Indian producers  received a large share of the agricultural revenue. Additionally, the  agricultural products grown on tribal lands typically do not feed tribal  members and instead are sold into the general agriculture commodity  system.

Furthermore, these reports and experts we interviewed noted that the  growth of agriculture on tribal lands could require access to credit. For  example, one tribal agriculture expert told us some tribes are interested in  transitioning to “value-added” agriculture, which aims to help the  community that produces raw agricultural materials capture the value of  the products as they progress through the food supply chain (for example,  by processing crops they grow or transitioning to more profitable  products, such as organic). Value-added agriculture initiatives might  require building facilities or acquiring more expensive inputs, and tribes  likely would need financing to support these initiatives. According to some  experts and a study we reviewed, if tribes and their members cannot  access affordable credit, it could limit the growth of these initiatives.

Stakeholders Reported That Tribes and Their Members Face Multiple Barriers to Obtaining Agricultural Credit on Tribal Lands

Tribes and their members face several barriers to obtaining agricultural  credit, including land tenure issues, administrative challenges, lenders’  legal concerns, and loan readiness issues. As a result, there is limited  commercial lending on tribal lands.

Land Tenure Issues May Present Hurdles to Obtaining Agricultural Credit

Ten tribal stakeholders and experts we interviewed cited difficulties in  using tribal lands as collateral as a barrier to obtaining credit because of  federal laws or other constraints.

Tribal trust and restricted fee lands. Federal law generally prohibits  lenders from obtaining an ownership interest in tribal trust and  restricted fee lands. As a result, tribes are not able to use their 46  million acres of tribal trust or restricted fee lands as collateral for a  loan. However, tribes can lease such lands to other parties, including  a tribal business or tribal member who wishes to use the land for  agricultural purposes (lessees). These lessees can then pledge their  “leasehold interest” in the lands as collateral for a loan, but may face  challenges in doing so. For example, in general, leases of tribal trust  and restricted fee lands must be approved by BIA and comply with its  leasing regulations, which stipulate that agricultural leases generally  have a maximum term of 10 years. While BIA generally allows  leased tribal trust and restricted fee lands to be subject to a leasehold  mortgage, three tribal stakeholders and experts we interviewed said  that BIA’s maximum term for agricultural leases often was insufficient  for obtaining an agricultural loan.

Individual trust and restricted fee lands. Unlike tribal trust and  restricted fee lands, the owners of individual trust and restricted fee  lands can use these lands as collateral for a loan with permission of  the Secretary of the Interior. However, many tracts of individual trust  and restricted fee lands are allotments with fractionated ownership.  According to nine tribal stakeholders and experts we interviewed,  fractionated land is a barrier to agricultural activity and obtaining  credit. Fractionated land occurs when an allottee dies without a will  and ownership is divided among all the heirs, but the land is not  physically divided. Thus, multiple owners (in some cases thousands)  can have an ownership interest in the land and may have different  ideas about how the land should be used. Interior estimated that out  of the 92,000 fractionated tracts (representing more than 10 million  acres), more than half generated no income in 2006–2011. For  agricultural leases and leasehold mortgages on fractionated lands,  BIA regulations require consent from owners of a majority interest in  such lands. However, according to Interior, some allotments have  thousands of co-owners, some of whose whereabouts are unknown,  which could make it difficult to obtain their permission for an  agricultural lease or a leasehold mortgage.

Additionally, as a result of allotment, many Indian reservations contain  different land ownership types, creating a “checkerboard” pattern of lands  that can make the establishment and financing of large-scale agricultural  projects difficult. For example, in addition to tribal and individual trust and  restricted fee lands, reservations also may include lands that passed out  of trust during the allotment period and were bought by non-Indians.  Thus, multiple tracts within a large-scale agricultural project may need to  be leased and financed separately because they have different owners  and may be subject to different laws. This can also make legal jurisdiction  unclear, which is a concern for private lenders financing projects on such  lands, as discussed below.

Experts and tribal stakeholders we interviewed reported that the barriers  to collateralizing various types of tribal lands make it difficult for tribes and  tribal members to access different types of agricultural loans. Most long- term loans—typically used for larger projects—generally need to be  secured by real estate, which make these inaccessible to tribes and tribal  members who do not have land that can be encumbered. For example,  an Indian agricultural producer who operates on trust land and wants to  build an agricultural facility for a value-added operation may not be able  to obtain a long-term loan unless he or she has other unrestricted land to  pledge as collateral. In addition, according to the former Executive  Director of the Intertribal Agriculture Council, when most agricultural  producers face economic distress, they can pledge land as security and  receive an extended period of time (20–40 years) to pay off the debt.  Tribal members may not have that option, making it difficult to obtain  credit in an emergency (such as adverse weather). In addition, according  to a tribal agriculture expert and three tribal stakeholders, tribal trust land  is not counted as an asset on balance sheets, which may affect an  agricultural lender’s assessment of a borrower’s creditworthiness for  various types of loans.

Administrative Process Delays May Deter Lenders and Borrowers

Processes at Interior—particularly at BIA—can increase the amount of  time it takes to obtain a loan, which can discourage both lenders and  borrowers, according to tribal stakeholders and experts. Most of the tribal  stakeholders and experts we interviewed told us that tribal members often  encounter delays when seeking necessary documentation from BIA. For  example, for loans involving trust or restricted fee lands, BIA needs to  provide a title status report to the lender that identifies the type of land  ownership and current owners. Two tribal stakeholders told us that BIA  takes months to produce a certified title status report. By that time, the  growing season could be over. A representative from a Native CDFI  serving a tribe in the Great Plains said it can take years to receive these  reports. BIA reported that in fiscal year 2017, it certified 95 percent of land  titles within 48 hours. However, BIA’s performance on this measure has  varied considerably over the last several years, and BIA officials told us  that it can take significantly longer to process title status reports for  complicated cases.

Tribal members also can encounter administrative challenges at other  points in the process. One Native CDFI representative told us she found  out that BIA did not record a leasehold mortgage when the CDFI  attempted to foreclose on the loan, which almost prevented the CDFI  from recovering the loan collateral. In other cases, Interior’s Appraisal and  Valuation Services Office might need to conduct an appraisal, such as for  an agricultural lease. According to Interior policy, these appraisals should  be completed within 60 days, but one tribal economic development expert  said they routinely take much longer.

Lenders Reported Having Legal Concerns about Recovering Collateral Involving Tribal Lands

As a result of the unique legal status of tribes, some lenders, including  FCS associations, reported concerns about their ability to recover loan  collateral if the borrower defaulted on a loan involving tribal lands. Seven  of the 11 FCS associations we contacted told us that they had legal  concerns of this nature, and six of the associations said they had  experienced the issues themselves. These concerns primarily arise from  the following issues:

Tribal sovereign immunity. Tribes are distinct, independent political  communities with certain inherent powers of self-government and, as  a result of this sovereignty, have immunity from lawsuits. A lender  cannot sue to enforce the terms of a loan agreement with a tribe  unless the tribe waives its sovereign immunity in connection with the  agreement. Private lenders therefore might be hesitant to make a loan  because they would not be able to sue the tribe if any disputes arose.  We previously reported that tribes may waive sovereign immunity in  agreements or contracts on a case-by-case basis and some tribes  have formed separate companies to conduct business that are not  immune from lawsuits. However, tribal government officials may  decide that waiving the tribe’s sovereign immunity for purposes of  enforcing the loan agreement is not in the tribe’s best interest.  Additionally, tribal sovereign immunity would not bar lenders from  seeking to foreclose on loans made to individual tribal members.

Legal jurisdiction. Loans made to Indian tribes or their members and  secured by tribal lands or collateral located on tribal lands may be  subject to tribal laws, rather than state laws. In addition, it is  sometimes unclear whether federal, state, or tribal courts would have  jurisdiction in the event of a default or foreclosure. If tribal laws govern  but do not adequately provide for the lender’s foreclosure, or if there is  not a legal forum to hear the foreclosure lawsuit, lenders may be  unable to recover the loan collateral. To address these types of  concerns, some tribes have adopted secured transaction codes  modeled after the Uniform Commercial Code, which can help to  assure lenders of their ability to recover collateral in the event of  default.

Unfamiliarity with tribal laws. Laws and court systems vary among  the nation’s 573 tribes, making it more difficult and costly for lenders  to learn tribal laws. For example, one FCS association noted that it  has many federally recognized tribes in its region, each of which may  have different laws.

If lenders have concerns regarding their ability to recover loan collateral in  the event of a default, lenders may not make loans involving tribal lands  due to concerns that the loan would not meet safety and soundness  requirements.

Potential Borrowers May Need Assistance with Loan Readiness

Five tribal stakeholders we interviewed said some tribal members may  need assistance—such as credit repair and technical assistance for loan  applications—to become ready for agricultural loans. Some tribal  members have no credit history, which can be a barrier to obtaining a  loan. One study found that compared to off-reservation counterparts,  reservation residents were more likely to have no credit history and when  credit scores were available, they were lower on average. Many Native  CDFIs provide credit builder or credit repair products to help tribal  members qualify for larger loans, such as small business loans.

Four tribal stakeholders we interviewed said members of their tribes  sometimes need technical assistance to complete the paperwork required  for agricultural loans, such as a business plan. One tribal member who  owns a ranch told us that the first time he tried to apply for a loan, he had  trouble completing the required paperwork and ultimately chose not to  apply. He felt tribal members seeking credit would benefit from assistance  in completing loan applications. One Native CDFI representative told us  that her organization provides technical assistance to its borrowers to  help them complete loan paperwork but noted that commercial lenders  often did not provide these services.

Barriers Have Limited Commercial Lending on Tribal Lands

We and others have noted that the barriers described above have  depressed commercial lending on tribal lands. In 2010, we found that  banks were reluctant to do business on tribal lands because of the  cumbersome procedures and their lack of experience. More recently, a  report for the Department of Housing and Urban Development surveying  lenders found that BIA processing times were a major challenge in  making mortgage loans involving tribal lands. A Native CDFI  representative told us that lenders have little incentive to engage in a  lengthy underwriting process, particularly if the loan is for a small amount  and if other potential borrowers have less complicated circumstances.  Some experts have described tribal lands as “credit deserts.” For  example, one study of three different areas of tribal lands found that few  financial institutions or automated teller machines were located on these  reservations. One Native CDFI representative told us that in her  experience, many people on her reservation never had a bank account.  She noted that when people do not have a bank account, it can be  challenging for them to see themselves as potential borrowers.

Similarly, our analysis found that the land tenure issues, administrative  process delays, lenders’ legal concerns, and loan readiness issues can  make agricultural loans involving tribal lands more time-consuming and  costly to underwrite. For example, one FCS association told us that loans  involving tribal lands require specialized legal analysis, which may be an  additional expense that it would not incur for otherwise comparable loans.  These same issues can increase a lender’s exposure to the risks inherent  in agricultural lending because they can affect the borrower’s ability to  repay the loan, the adequacy of the collateral to secure the loan, and the  lender’s ability to recover the collateral in the event of a default.  According to FCA, consistent with the purposes of the Farm Credit Act of  1971, the ability of a lender to collect loans is an important element of the  institution’s safety and soundness, and the continued availability of credit.

Finally, some stakeholders said they believe that discrimination also  contributes to the lack of commercial lending on tribal lands. Four experts,  a tribal stakeholder, and a BIA representative told us that they believe  that some commercial lenders do not want to make loans involving tribal  lands because of bias. As previously discussed, the plaintiffs in the  Keepseagle case that USDA settled for $760 million alleged that USDA  discriminated against Native American farmers and ranchers in certain  programs. According to a tribal economic development expert, tribal  members who face discrimination or other negative experiences with  commercial lenders may share these experiences with other tribal  members and deter them from applying for credit.

FCS Laws Allow for Lending on Tribal Lands, and Some FCS Associations Reported Lending to Tribes or Tribal Members

We found that FCS generally has authority to make loans involving tribal  lands. Of the 11 FCS associations we contacted with tribal lands in their  territories, some reported that they had recently made loans to Indian  tribes or their members, and their outreach to these populations included  support for agricultural education.

FCS Laws Allow for Lending on Tribal Lands

Generally, FCS has authority to provide a broad range of credit services  to eligible agricultural producers, which may include tribes, tribal  businesses, and individual tribal members operating on various types of  tribal lands. However, borrowers must meet various eligibility and  underwriting criteria that are required by law. For example, applicants for  agricultural loans must be determined to be eligible borrowers, which  means they must own agricultural land or be engaged in the production of  agricultural products, including aquatic products.

Also, long-term real estate loans (which have terms of up to 40 years)  made by FCS institutions must be secured by a first-position lien on  interests in real estate, thus enabling FCS to obtain ownership or control  of the land in the event of default. FCA has determined that this  statutory requirement can be satisfied, for example, with leasehold  interests in real estate—such as that held by a tribal member leasing  reservation land from a tribe—provided that the lease grants the borrower  significant rights to the land, and the loan is made on a safe and sound  basis. As noted earlier, BIA regulations often limit agricultural leases of  tribal lands to a term of up to 10 years. In such cases, FCS associations  similarly may limit the term of the related loan (to less than 10 years).  According to FCA, when loans are for shorter terms than the leases, the  FCS association’s first lien is preserved, as required by law, and the loan  is prudent from a safety and soundness perspective.

FCA has not issued written guidance indicating whether interests in other  types of tribal lands—such as individual trust or restricted fee lands—also  satisfy the requirement for a first-position lien on interests in real estate.  However, FCA has the authority to determine what types of interests in  real estate will satisfy this requirement. Also, according to FCA, there is  no statutory requirement that short- and intermediate-term loans be  secured with interests in real estate; such loans instead can be secured  by other collateral, such as equipment, crops, livestock, and business  revenues.

In addition to making direct loans to agricultural producers, FCS has  authority to lend to non-FCS institutions, such as commercial banks and  credit unions, which in turn make agricultural loans to FCS-eligible  borrowers. These other financing institutions are known as OFIs.

According to FCA, the OFI lending authority allows FCS banks to fulfill  their mission as a government-sponsored enterprise by enhancing the  liquidity of OFIs, thereby lowering the cost of agricultural credit. As noted  earlier, FCS is required to establish programs to serve young, beginning,  and small farmers and ranchers, but it is not statutorily mandated to focus  on providing financial opportunities to any other group of eligible  agricultural producers.

Notwithstanding the authorities described above, FCS must comply with  other applicable laws and requirements. For example, FCS institutions  are subject to safety and soundness oversight by FCA, including with  respect to loan underwriting. FCS institutions also must comply with  applicable federal, state, and tribal laws governing any tribal lands or  property thereon used as loan collateral. FCS associations may obtain  Farm Service Agency guarantees on loans to borrowers who otherwise  may not meet FCS underwriting requirements. However, by law, loans  made by FCS associations are not eligible for a similar BIA loan  guarantee program.

Some FCS Associations Reported Lending to Indian Tribes or Their Members, and Selected Associations’ Outreach to These Populations Included Education

Based on information from selected FCS associations located near tribal  lands, some FCS associations have lent to Indian tribes or their members  in the last 2 years. Of the 11 FCS associations we contacted with tribal  lands in their territories, representatives of eight told us they had loaned  to tribes or their members in the last 2 years—primarily to individual tribal  members. We made the following observations based on the  associations’ responses:

Limited data on lending amounts. Representatives of 10 of the 11  FCS associations we queried stated that they either do not collect or  do not maintain data on lending to specific racial populations, thus  making it difficult to provide more detailed information on lending to  Indian tribes and their members. However, four representatives  provided estimates of their recent lending to this population on tribal  lands. One association cited more than $25 million in total loans  outstanding to a small number of tribes and tribal entities. Another  association reported making about $5.5 million in new loans to tribes  or their members on tribal lands in the last 2 years. A third reported a  $3 million revolving line of credit to a family farm, and the fourth said it  had made approximately $150,000 in five separate loans to two tribal  members.

Loan purposes. Seven associations reported on the type of credit  they extended to Indian tribes and their members on tribal lands. In  general, they made short-term operating loans and short- and  intermediate-term loans for the purchase or refinance of items such as  machinery and equipment, livestock, vehicles, or buildings and  improvements. Two associations also reported making long-term real  estate loans. The other association that reported lending to tribes or  their members did not report on the types of loans it made.

Type of collateral. Representatives of the eight associations that  reported lending to tribes or their members all indicated that the  associations secured loans with personal property, such as crops,  livestock, or equipment. In addition, the associations that reported  making real estate loans said they secured the loans with fee-simple  land.

Representatives of three FCS associations said they had not loaned to  Indian tribes in the past 2 years. One association had not received any  credit applications from tribal members, and another could not say if it  had served tribal members because of a lack of racial data on  borrowers. The third association had not provided loans to tribal  members in the past 2 years, but the representative stated that it provided  several letters of credit to guarantee the payments of BIA leases on tribal  land.

Although the FCS associations we contacted stated they have the  resources to lend to tribes and their members on tribal lands, a few key  factors affect their lending decisions. Representatives of all 11 FCS  associations stated their associations had adequate financial capacity  and resources to make potentially more complicated or time-consuming  loans, such as those involving tribal lands. In general, they stated that the  factors they consider in deciding whether to loan to Indian tribes or their  members on tribal lands are the same as for any comparable loan—for  example, creditworthiness, loan purpose, and the ability to secure a lien  on collateral. However, as described earlier, some FCS association  representatives described challenges related to tribal law, jurisdiction,  tribal sovereign immunity, and recovery of collateral as complicating the  lending process to Indian tribes and their members on tribal lands.  Although three of the 11 FCS associations we queried reported making  loans to tribes that had waived their sovereign immunity for those  contracts, most loans the associations reported were to individual tribal  members and secured by personal property or fee-simple land.

According to two tribal stakeholders we interviewed, Indian tribes or tribal  members who received loans from FCS or other commercial lenders may  have larger agricultural operations, a longer credit history, and property  that can be more easily used as collateral. For example, an established  rancher may be able to secure operating loans with his or her cattle herd  or interests in fee-simple land, thus preventing the need to rely on trust  land as collateral.

At the national level, FCS—through its trade association, the Farm Credit  Council—conducts and facilitates outreach to tribes and tribal stakeholder  groups. According to a representative of the Farm Credit Council, the  Council and representatives of associations with tribal lands in their  territories participate in an informal FCS working group focused on  outreach and lending on tribal lands. One association representative  described the group as sharing examples of lending success or reasons  for missed opportunities; local, regional or national sponsorship  opportunities; local or regional agricultural education events; and relevant  legal proceedings, such as the Keepseagle settlement.

At the institution level, FCS associations must prepare annual marketing  plans describing, among other things, how they will be responsive to the  credit needs of all eligible and creditworthy agricultural producers in their  respective territories, with a focus on diversity and inclusion. The  marketing plan must detail strategies and actions to market their products  and services to potential borrowers who may not have been considered  previously for reasons other than eligibility or creditworthiness. However,  FCS associations are not required to achieve specific outcomes or  quantifiable results.

Our nongeneralizable review of the marketing plans of the 11 selected  FCS associations with tribal lands in their territories and our analysis of  their written responses to our queries for additional information found that  outreach to tribes and their members focused on educational and  charitable initiatives and direct marketing about agricultural lending, or did  not directly target tribal populations.

Seven of the 11 associations discussed actual or planned outreach to  Indian tribes or their members in their marketing plans or written  responses.

Four of those seven associations cited financial support of specific  agricultural education activities for tribes and their members. Two  associations reported making charitable donations that benefited  tribal members.

Four of the seven associations reported direct marketing to  potential tribal borrowers. However, in one case, the marketing  was a one-time conversation with a tribe regarding financing for a  new facility. The other three associations reported that they called  potential Indian borrowers, sought referrals from existing tribal  member customers, or conducted meetings with tribal government  officials.

In general, the four remaining associations, in their marketing plans  and written responses, addressed outreach to minority producers  through broader methods, such as participation in ethnic group  organizations or through inclusion in the association’s overall outreach  and marketing efforts. In addition, five of the 11 associations  discussed outreach to minority producers in conjunction with their  statutorily-mandated outreach to young, beginning, and small farmers.  According to FCA officials, FCA’s guidance on providing credit to  young, beginning, and small farmers, as well as to local food  producers, would be broadly applicable to socially disadvantaged or  minority populations that fall within the program definitions.

Most of the tribal stakeholders with whom we spoke either were not  familiar with FCS or did not know of the tribe or any of its members  receiving FCS loans. One Native CDFI representative noted that although  he was not familiar with any members of his tribe receiving FCS loans, he  thought other nearby tribes or their members had worked with FCS.

FCA also encouraged FCS associations to develop underwriting  procedures to facilitate lending on Indian reservations. FCA identified  one FCS association that developed such procedures, and another one of  the associations we queried noted that they had such procedures. The  first association provided an overview of its procedures, which identified  links to information on borrower and collateral eligibility and actions that  require BIA approval, among other topics. According to representatives of  the second association, its procedure manual directs loan officers to treat  tribal members’ applications for loans secured by personal property the  same as any other applications. In addition, they said the manual  contains instructions for working with BIA for real estate loans to tribal  members on trust land and for making direct loans to tribes.

Stakeholders Discussed Lender Partnerships, Loan Guarantees, and Other Options to Improve Agricultural Credit Access on Tribal Lands

Our review of literature and interviews with experts, tribal stakeholders,  FCS associations, Farm Credit Council representatives, and FCA officials  identified the following options for improving access to agricultural credit  on tribal lands.

Partnerships with local lenders. Tribal economic development  experts and tribal stakeholders cited the importance of commercial or  government lenders partnering with Native CDFIs and other Indian- owned lenders, which are the most capable of navigating the  challenges related to Indian agricultural credit. According to these  experts and stakeholders, if larger commercial or government lenders  worked with Native CDFIs or other tribal lenders (such as tribal banks  or economic development corporations) to provide funds or conduct  outreach, the tribal organizations could more efficiently reach Indian  tribes and their members. They noted these organizations are familiar  with tribal members and the administrative processes for obtaining  loans on tribal land. Partnership with tribal lenders and other tribal  businesses also could support tribes’ efforts to improve members’  loan readiness, according to literature we reviewed and a tribal  economic development expert and a Native CDFI representative we  interviewed.

Commercial and government lenders may need to clarify whether  tribal lenders with which they might partner meet their lending  requirements. For example, although FCS banks have authority to  lend to OFIs, which in turn can lend to FCS-eligible borrowers, only  certain types of CDFIs may qualify as OFIs. In addition, this  authority does not extend to long-term funding, and thus cannot be  used to fund agricultural real estate loans made by OFIs. One FCS  bank that commented on a 2004 FCA rule noted the latter statutory  limitation as a major impediment to OFI program expansion.

Flexibility with collateral requirements. As noted earlier, multiple  stakeholders we interviewed discussed the challenges related to  collateralizing trust land. In addition, FCA officials cited the need for a  statutory change or clarification of the requirement that long-term  loans made by FCS be secured by a first lien on interests in real  estate. They said that by removing or clarifying this requirement,  lenders would have authority to provide larger, longer-term loans to  creditworthy tribes or tribal members who cannot mortgage their tribal  lands.

Guarantees. Some stakeholders we interviewed mentioned loan  guarantees as an option to improve access to agricultural credit on  tribal lands. For instance, FCA officials and Farm Credit Council  representatives told us they had spoken with leadership of the Native  American Agriculture Fund (created as part of the Keepseagle  settlement) regarding the potential establishment of a loan guarantee  fund, such as a first-loss fund, which would step in to purchase a loan  in default (thus substantially reducing credit risk to the lender). In  addition, three of the 11 FCS associations we queried identified  guarantees as a possible way to increase FCS lending to Indian tribes  and their members on tribal lands.

FCS associations still face challenges in using guarantees. With  regard to the first-loss loan guarantee fund, FCS associations still  must adhere to the FCS statutory requirement for a first-position lien  on interests in real estate for long-term loans. According to an FCA  official, although the first-loss loan guarantee fund could mitigate  repayment risk, a statutory change or clarification would be necessary  for FCS associations to accept guarantees in lieu of real estate for  long-term loans. And as noted earlier, FCS loans are statutorily  ineligible for BIA’s loan guarantee program. Two FCS associations  noted that removal of this restriction could increase FCS lending on  tribal lands. Finally, FCA officials stated that challenges FCS  associations face in making loans involving tribal lands also can  extend to Farm Service Agency guarantees on those loans. In other  words, to obtain such guarantees, FCS associations must navigate  issues around land tenure, legal jurisdiction, and tribal laws.

Tribal options. In addition, stakeholders discussed the following tribal  actions that could increase credit access for tribes and their members:

Representatives of two FCS associations noted that waivers of  sovereign immunity (limited to specific contracts) by tribes may  increase lending involving tribal lands, as it helps to enable  lenders to enforce the terms of loans made to tribes. According to  the Office of the Comptroller of the Currency, some banks have  negotiated limited waivers of sovereign immunity (restricted to a  specific transaction). As noted earlier, tribes may decide that  waiving sovereign immunity is not in their best interest. In addition  to the limited waivers of sovereign immunity, representatives of  three FCS institutions stated that increased adoption of uniform  commercial laws (such as the Uniform Commercial Code) by  tribes could increase lending involving tribal lands.

One tribal economic development expert told us that tribes that  adopted their own leasing regulations under the HEARTH Act  have seen substantially increased economic development. As  noted earlier, the HEARTH Act provides tribes with greater  flexibility to enter into leases for agriculture or other purposes.  Once a tribe’s leasing regulations have been approved by the  Secretary of the Interior, tribes may negotiate and enter into  agricultural leases with 25-year terms without further approval by  the Secretary. The combination of longer lease terms and the  ability to conduct business outside of the BIA approval process  can expedite the process of obtaining a leasehold mortgage on  tribal trust and restricted fee land. As of May 1, 2019, the  Secretary had approved agricultural leasing regulations for seven  tribes under the HEARTH Act.

We provided a draft of this report to FCA, Interior, and USDA for review  and comment. FCA and USDA provided technical comments, which we  incorporated as appropriate. In comments provided in an email, Interior  officials noted that efforts to simplify the Secretary of the Interior’s  approval process could provide faster mortgage determinations and thus  may result in expanded lending and production opportunities for Indian  agricultural producers.

We are sending copies of this report to the appropriate congressional  committees, the Chairman and Chief Executive Officer of the Farm Credit  Administration, the Secretary of the Interior, and the Secretary of  Agriculture. In addition, the report is available at no charge on the GAO  website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-8678 or cackleya@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix II.

Appendix I: Objectives, Scope, and Methodology

Our objectives in the report were to describe (1) what is known about the  agricultural credit needs of Indian tribes and their members on tribal  lands, (2) the barriers stakeholders and experts identified that Indian  tribes and their members on tribal lands face in obtaining agricultural  credit to meet their needs, (3) the Farm Credit System’s (FCS) lending  authority and lending and outreach activities on tribal land, and (4)  suggestions stakeholders have discussed to improve access to  agricultural credit on tribal lands.

For the purpose of this report, we use the term “tribal lands” to refer to  reservations (including all land within the reservations’ boundaries), trust  land, allotments, and restricted fee land. In general, our report focuses on  the agricultural credit needs of tribes and their members in the lower 48  states.

To describe what is known about the agricultural credit needs of Indian  tribes and their members on tribal lands, we explored various potential  data sources on agricultural loans that Indian tribes and their members  applied for or received. We reviewed available data from the Consumer  Financial Protection Bureau and Department of Agriculture (USDA). For  example, we obtained borrower-reported loan data from USDA’s  Agricultural Resource Management Survey, but for several data fields  related to Indian producers on tribal lands, sample sizes were too small or  the coefficients of variation were too high to produce reliable estimates.  We also reviewed provisions of the Equal Credit Opportunity Act, federal  regulations, and other legal documentation pertaining to collection of data  regarding the personal characteristics of applicants for nonresidential  loans.

To describe what is known about Indian tribes and their members’  agricultural credit needs and the barriers they face in obtaining  agricultural credit, we conducted a literature review. We conducted  searches of various databases, such as EBSCO, ProQuest, Google  Scholar, and Westlaw to identify sources such as peer-reviewed  academic studies; law review articles; trade and industry articles; reports  from government agencies, nonprofits, and think tanks; and  Congressional transcripts related to tribal agriculture, barriers to  accessing credit on tribal lands, and FCS. We identified additional  materials through citations in literature we reviewed. In addition, we  reviewed statutes and the Department of the Interior’s Bureau of Indian  Affairs’ (BIA) regulations related to use and ownership of tribal lands,  including leasing.

To describe FCS’s authority and lending and outreach activities on tribal  lands, we reviewed statutes and regulations governing FCS, as well as  written guidance issued by the Farm Credit Administration (FCA). We  also reviewed the marketing plans of a nongeneralizable sample of 11  FCS associations (16 percent of the 69 FCS associations that lend  directly to agricultural producers) whose territories included large tribal  land areas with high levels of agricultural activity, including the tribes we  interviewed (described below). We selected an additional FCS  association but on closer review realized it did not have a significant  amount of tribal land in its territory; we therefore excluded this association  from our analysis. For comparison purposes, we also reviewed three  marketing plans from FCS associations that did not have significant tribal  populations in their territories. In addition to reviewing the marketing  plans, we sent the 11 FCS associations a questionnaire about their  lending and outreach to tribes and their members and any challenges in  making loans involving tribal lands. We also asked these associations  about any suggestions to improve access to agricultural credit on tribal  lands. We received responses from all 11 FCS associations, and followed  up with some associations to clarify information they provided. While the  sample allowed us to learn about many important aspects of FCS  associations’ lending and outreach to tribes and their members on tribal  lands, it was designed to provide anecdotal information, not findings that  would be representative of all of 69 FCS lending associations.

To address all four objectives, we attempted to interview representatives  of six tribes. First, we selected these tribes to represent five regions  (Great Plains, Rocky Mountain, Northwest, Southwest) and a state  (Oklahoma) that—according to experts we interviewed—have tribes  engaged in agricultural activity. Within these regions, we generally  selected large tribal land areas that have high levels of agricultural  activity, as indicated by the USDA 2012 Census of Agriculture data.  Specifically, we selected tribes based on number of farms, land in farms,  and market value of agricultural products. In addition, we selected one of  the six tribes because two experts recommended that we speak with  them. For the six tribes, we contacted tribal government leaders and  employees of the relevant government offices, such as the agriculture or  tribal lands departments.

For two of the six tribes, we interviewed employees of the tribal  agriculture department. One of these interviews also included  representatives of the Native Community Development Financial  Institution (Native CDFI) that serves the reservation.

For the third tribe, we received written responses from a tribal farm.

For the fourth tribe, we interviewed a representative of the Native  CDFI that serves the reservation.

For this series of interviews, we only received information relating to  four tribes. We did not obtain meetings with relevant tribal government  officials for the last two tribes.

We also contacted farms or Native CDFIs associated with an additional  three tribes based on USDA data or recommendations from experts we  interviewed. For one of these tribes, we interviewed a tribal farm  employee and a representative of the tribe’s community development  corporation. For the second tribe, we interviewed a tribal farm employee.  For the third tribe, we interviewed a representative of the Native CDFI that  serves the reservation.

In summary, we interviewed employees of two tribal agriculture  departments, employees of three tribal farms, and representatives of  three Native CDFIs and one tribal community development corporation.  Throughout this report, we refer to tribal government employees, tribal  farm employees, or representatives of Native CDFIs or community  development corporations serving a tribe as “tribal stakeholders.”  Although the information we obtained from the tribal agriculture  employees allowed us to provide anecdotal tribal perspectives, it is not  generalizable to the 573 federally recognized Indian tribes. In addition,  the views of tribal farm employees and Native CDFI and community  development corporation representatives cannot be generalized to tribes  but illustrate views on needs, barriers, and other issues from the  perspectives of the organizations.

In addition, for all four objectives, we interviewed the following:

Experts on agricultural and economic development on tribal  lands. We interviewed subject matter experts on tribal agriculture and  economic development from various organizations, including  advocacy and academia. Specifically, we interviewed representatives  of the following organizations: the Center for Indian Country  Development at the Federal Reserve Bank of Minneapolis, First  Nations Oweesta Corporation, the Indian Land Tenure Foundation,  the Indigenous Food and Agriculture Initiative at the University of  Arkansas, the Intertribal Agriculture Council, and the Native American  Agriculture Fund. We selected these organizations based on relevant  publications, testimonies before Congress, or recommendations from  other experts. These organizations work with a number of tribes and  thus could speak to general trends or commonalities in tribal  agriculture and economic development. Throughout the report, we  refer to the representatives of these organizations as “experts.”

Agency and trade group representatives. We interviewed officials  from FCA, USDA (including the Farm Service Agency, Economic  Research Service, and National Agricultural Statistics Service), and  BIA. We also interviewed representatives of the Farm Credit Council,  the national trade association for the Farm Credit System.

Appendix II: GAO Contact and Staff Acknowledgments

In addition to the contact named above, Karen Tremba (Assistant  Director), Lisa Reynolds (Analyst in Charge), Miranda Berry, Tom Cook,  Anne-Marie Fennell, John Karikari, Marc Molino, Kirsten Noethen,  Barbara Roesmann, Jeanette Soares, and Farrah Stone made significant  contributions to this report.

More than 80% of the land held in trust for Indian tribes and their members is used for farming, ranching, or other agricultural purposes.

But the extent to which Indian tribes and their members receive agricultural credit, such as loans to buy farm equipment, is unclear.

Tribal representatives and experts we interviewed cited barriers to obtaining credit such as

Difficulty in using tribal lands as collateral

Lender concerns over legal matters such as tribal immunity from lawsuits and tribal laws and procedures that vary among the nation's 573 federally recognized tribes