These are exciting days around the Seminole Tribe of Florida, Inc. We just signed a letter of intent to acquire and wholly own a bank – not just having our name on it, but wholly owning our own Seminole Tribal bank. The portfolio of the Tribe will be more diversified with this venture and we are right now in the process of engaging a CPA firm to perform due diligence. We hope to have everything completed by late December. Though, with the holidays, that may stretch out shortly past the beginning of the year.
This national charter bank is called Valley Bank. You’ve probably seen one. There are four branches around South Florida, including the main branch in Tamarac, and others in Fort Lauderdale, Davie and Hollywood. We are excited about that.
People may ask: “Why are we acquiring a bank?”
Well, when you take a look at the needs of not only the Tribe but the Tribal members and the rates they are paying to outside banks, it is easy to understand. Even though those loans are guaranteed by their per capita dividends, they are charged outrageous interest rates. We hope to attract Tribal members to bring their loans to our bank, which will operate under a Board umbrella that will look much more favorable on Tribal member financial matters. We hope this bank can be the institution, the mechanism that processes all those loans, as well as handle other Tribal financial needs.
Tribal members will have a trusted resource immediately available to them whether they want to build a house, buy a car, take a vacation, whatever, but will be extended favorable terms. Again, this is kind of what I’ve been saying all along: If you are going to pay anybody, pay yourself. If you take a look at the banking fees these banks collect, well, yeah, they really like doing business with us.
And there is another reason they like Seminole business. We pay our bills.
We will operate like any other bank. We will do business with non-Tribal persons, will be FDIC insured, will abide by all banking regulations. We are looking at everything, including the advantages we have at our disposal. Believe me, we are not going to acquire a bank and then break the regulations. We will follow the Bank Secrecy Act, the Homeland Security Act and the Patriot Act regulations, cognizant of the great changes to global financial systems since 9/11.
With this great enterprise under our wings, we will not only do business with ourselves but take it beyond that, opening more branches across the country; we are going after a federally chartered bank. Our unique status as a sovereign entity owning a bank will position us as not only the lending institution for all Seminole Tribe projects but also for Tribal projects and the support of Tribal enterprise across the country.
If Miccosukee (or any other Tribe) wants to build a school, water treatment center, road, bridge, whatever, they have to go out and obtain loans from some institution. We want to be that institution. We want to take advantage of Bureau of Indian Affairs guaranteed loans, the U.S. Housing and Urban Development Section 184 Indian Home Loan Guarantee Program and all the initiatives established for Indian people and businesses.
We’ve been told there are but 21 banks in all of Indian Country; a number of them are joint ventures with partners. But our bank will be wholly owned and operated by the Seminole Tribe. We have talked to representatives of banking Tribes, and they have given us very positive feedback, fully recommending we go forward and acquire a bank.
So we are excited about the possibilities. Again, it’s leveraging our sovereignty, leveraging our tax-exempt status and positioning this business venture to conduct business coast to coast. We have been dealing with Wells Fargo and a few other institutions, but Tribal members will now have the opportunity to deal with, basically, themselves. This way, if we are successful with this venture – and I know we will be – it is going to benefit everyone.
Some folks sought services from various local banks, like Indiantown Bank. Others didn’t have the credit to go anywhere. A lot of people have been just getting loans from the Council for some time. They were basically signing their life away.
When this bank comes onto the scene, we hope Council will want to get out of the loan business. In the time I’ve been on Council I’ve seen all sorts of business loans and home loans and you know what? That affects the cash flow, the projects the Tribal Council wants to fund. It gets in the way. Council is not a bank.
Hopefully, business loans currently given out by the Tribe are for sound economic principles and not political considerations. With the new bank, that possibility is taken right off the table. It limits the favoritism and politics. There may be lots of loans that go out right before an election. Now people who want to go into business and want to put a little more thought into it will create an actual business plan. It will enable Tribal members to become better business people because they will know what to expect other than, “Every two years I’m going to get an extra loan out of the Rep. right before the election.”
When the Tribe started overhauling the cattle program a couple years ago, Big Cypress Rep. Joe Frank said we took this position: “The government has kept Seminoles in the cattle business for 60 or 70 years trying to teach us to be cattle raisers and they did a great job. We have one of the best herds in the country. But they never spent any time teaching Tribal members how to become businessmen.”
So for the last two years, that’s what we have been trying to do. We got some help from Council to slowly evolve to where the cattle owners are going to be businessmen operating their herds as a business within a couple years. Hopefully this bank will give us the opportunity to work with Tribal members who have sound business plans to enable them, and maybe to shave some of the politics out of it.
Individuals must, however, understand how to reduce their taxes at the end of the year by being structured as a business. Because when you add per capita and cattle sales checks together, you find yourself in a different tax bracket. Business expenses – to write off against your cattle check – help a lot. Our new bank will continue that education, making the cattle program, or any Tribal enterprise, stronger.
Now a bank is not just about processing loans; it is also about being in a strategic position to implement financial literacy that can and will help individuals, not only just the seasoned entrepreneur but also those individuals seeking to build their first home. Understand, don’t overextend yourself and that will be part of that financial literacy education.
We are talking about educating our young people right off the bat, trying to prevent – you know when they turn 18 and run right out to the Lexus dealer or the Cadillac dealer or Corvette dealer and then can’t get a home loan after that because they are so young and their car payments are probably $3,000 a month and their insurance is certainly that much or more with a car like that.
Now we will tell them, you turn 18, you come with us – to “your” bank – and we will structure you something. We want to take on that portion of financial literacy where the education process is much longer and not, “Hey look, you are about to turn 18 and you got to spend, what is it, three days or a weekend to satisfy the financial literacy requirement.” That’s not enough. We want to start the process much earlier so that when they do become 18, they will be in a much better position to deal with their money.
We’ll have to have two programs: One for those who are still in school, and another for those who are out. Even though you are 18 or 19 years old, it is still not too late to get yourself educated about money. But we definitely want to start teaching much, much sooner.
That has been the thought process here. Helping Tribal members help themselves.
Can you imagine the things we could teach kids in grade school: You are part owner of this bank. This is how a bank operates. This is how a checkbook works. This is how to use balance sheets to balance that check book.
Truthfully, when we started talking about a bank, it wasn’t just all financial. It was also to help Tribal members become more knowledgeable by being financially independent. We had a Tribal system that for years taught us not to be financially independent. In fact, it became an enabling system.
We can sit here all day long and talk about what we didn’t teach or we didn’t do. Well you know what? No more talking. We are going to move forward and achieve this business venture.
People may say, “Why is the Tribe trying this again? It didn’t work the first time.”
We have never tried it before. The venture in the mid-1980s was only using our name. The bank was owned by outside interests. This is a common misbelief; it should not be used to judge our current venture.
I realize change always has an element of fear to it. It’s just a new procedure that has to be learned. We want Tribal members to have a level of comfort. You can go do business with Chase, Wells Fargo, Bank of America, any bank out there, and you will find our bank will operate the same way. Your deposits will be FDIC insured.
It will change our Tribal infrastructure. Existing Tribal programs that are in the lending business will be incorporated into this. I like the idea of small branch offices being opened on Big Cypress and Brighton where check cashing is relatively non-existent. I am sure the business owners in those communities would like to see that. It will mean more money staying right there, circulating right on the reservation, supporting the economy.
When I was at the Immokalee Casino I was always ready for the influx from the first of the month through the 15th. People cashing their checks. But where else were they going to go? All sorts of situations would come up that would not work in a conventional bank. Son and daughter would bring grandma’s check in because she was confined to the house. I’d get a call and have to come down to vouch for them.
We’re excited about bringing that sort of personalized service to the organized, regulated financial services of a real bank. This will expand the Tribal portfolio and assist Seminole Tribal members in their financial security. That is the most exciting part for me as an elected public official – we are recognizing that there is an individual Tribal need and bringing in a mechanism that will allow us to address those needs.
Tony Sanchez Jr. is President of the Seminole Tribe of Florida, Inc.