The Osage Nation is taking its first steps toward setting up its own financial institution after the Seventh ON Congress passed legislation to establish a nonprofit corporation code.
Legislative bill ONCA 21-27 (sponsored by Congressional Speaker Angela Pratt) adds a section titled “Nonprofit corporation code” to Osage law and passed with a 10-2 vote during the Hun-Kah Session. In addition, Congress also voted 10-2 to pass a resolution (ONCR 21-09 also sponsored by Pratt) to “authorize and adopt the articles of incorporation for the nonprofit corporation.”
According to ONCR 21-09, “The Place to Borrow Money” is the corporation’s name.
Pratt said several individuals and entities had worked on and reviewed the legislation including the Nation’s Attorney General’s Office, Executive Branch Legal Counsel Terry Mason Moore and the Strategic Planning and Self Governance Office. ONCA 21-27 received initial consideration during a March 30 Congressional Commerce, Land and Gaming Committee meeting.
Candy Thomas, director for the Strategic Planning and Self Governance Office, delivered a presentation on Community Development Financial Institutions (CDFI) which are aimed to provide and spur economic development in communities, especially low-income ones and is the business model under consideration.
“There are some tribal CDFIs that have been successful and one of the most is the (Citizen Band) Potawatomi, they’ve been up and running for about 30 years and they started with a small loan portfolio of $250,000 and they’re now at $40 million and self-sustaining,” Thomas told the committee. “(Principal) Chief (Geoffrey Standing Bear) and I went down (to the tribe’s capital in Shawnee) and spent most of the day with them going through how they’re set up, what the market is, what types of loans they offer, what’s the risk rate and interest rate and all those types of things. One of the most key factors is to get the right people and the right places and to structure the loans to the needs of your market or community area.”
According to ONCA 21-27, the new law allows corporations to be organized for lawful purposes whether religious, scientific, educational, research, social, patriotic, political, professional, commercial, industrial, business or trade associations. The corporations also have several general powers including having the authorization to lend money, assist the beneficiaries of its programs financially, to make contracts and incur liabilities, borrow money, to lend money for its corporate purposes, and to invest and reinvest its funds and to hold personal and real property as security for the payment of loaned and invested funds.
The law also states the affairs of a corporation shall be managed by a board of directors which shall not have less than three individuals. The board would also be subject to bylaws and articles of incorporation.
In developing an Osage CDFI, Thomas said it would take place in small steps and her office has been looking at putting together a work organization chart and operating budget and an institution would be subject to several steps before achieving certified CDFI status. She also noted the law would also apply to any Osage entrepreneur who wants to get into the nonprofit business.
As a certified CDFI, an institution is eligible to apply for different types of funding, including federal money, Thomas said. The institution can also offer borrower education and training opportunities for the public on managing money, spending plans, setting up budgets and making payments, she said.
Thomas said her office is also conducting an online market feasibility study gathering information on the needs of the Nation and its community members. “Chief feels like we should offer this (study survey) nationwide and not just here in Oklahoma, so we’re trying to get an idea of what loan packages would address the needs reflected in the market study.”
Second Speaker Jodie Revard said the Nation’s strategic plan also mentions interest in a tribal financial institution and the bill provides “a great step” to continue exploring the idea. In response to a question from Revard, Thomas also mentioned the Osage Nation Foundation was established as a nonprofit by a separate law and ONCA 21-27 does not apply to the Foundation at this time.
In the meantime, Thomas said her office is waiting for results of the market study and that information would be beneficial to show the community’s needs and interest in services to offer such as business start-up loans.
As for the board of directors, Thomas said the Principal Chief would appoint the initial board and the prospective individuals would be those that have financial industry familiarity with loans as well as bankers. “We’re looking at some pretty high-level professional type people and we don’t have a board yet,” she said. “We want people that can help us make good financial decisions.”
The committee voted to send ONCA 21-27 to Congress with a “do-pass” recommendation. During debate time before the vote, Congressman Eli Potts said he supported the idea of a tribal financial institution for the people, but said he is voting against the bill for reasons including he would like to see the Nation offer lower interest rate loans to compete with other institutions and due to timing because the Nation’s 2020 financial audit had yet to start after it was delayed and added “I don’t think this is the first step we should be taking right now.”
Congressman Scott BigHorse said he has visited with Osages who also wanted to see the Nation have its own institution as well and would be supporting the bill. “They’ve been waiting on it and I agree it’s not perfect, it needs some work done on it, but I too feel like this is the first step in fulfilling the dreams of some of our constituents,” he said.
Pratt said: “We’re finally moving forward, this is necessary due to the different partnerships that can be established, they’ve been working with Oweesta Corp. (A Native CDFI that offers financial products and development services to Native CDFIs and communities) … It shows that we are taking the first step in the Nation and that it has governmental support... The structure still has to be built specifically; this Congress will take a look at that again ... It’s a first step in moving toward progress.”
ONCA 21-27 passed with a 10-2 vote with “no” votes from Potts and Congressman Joe Tillman on April 6. On April 27, the 10-2 vote repeated when the Congress voted to pass ONCR 21-09 to adopt the articles of incorporation resolution.
For more Congressional information and to view filed legislative bills/ resolutions, visit the Legislative Branch website at: https://www.osagenation-nsn.gov/who-we-are/legislative-branch