When Amber Buker explains how she co-founded a neobank for Native Americans, she tells the story of the time she tried to apply for a down payment program for members of her tribe.
It was in 2017 when she was working in Nashville, after graduating from law school in Portland, Oregon. There she realized how far from the traditional financial system she and her family were, and set her sights on homeownership. But as a first-generation college student and the first in her family to buy a home, she didn’t know where to start. Then her mother told her that their tribe, the Choctaw Nation, had a down payment program that might help her.
Buker found a description of the program on the tribe’s website and promptly called customer service for assistance. Only she was told that the benefit did not exist. So she called back and finally found someone who could help. However, the rules were so opaque that together they couldn’t figure out if Buker qualified and what her next steps should be. Then she tried it with her mortgage advisor, who was unwilling to investigate the problem. She eventually gave up on the program, but was eventually able to buy a house.
That experience was one of the many reasons why this year she co-founded a digital bank run by Native Americans, for Native Americans. called Totemis focused on addressing the systemic barriers to financial services faced by Native Americans, in partnership with First priority bank, a Tulsa community bank, to act as its sponsor bank, holding Totem’s deposits. “Our goal is to get more of our people into the bank, help them grow their credit and access the tribal benefits that we believe will help build a new tradition of building indigenous wealth,” she says.
Neobanks are fintech companies that only operate online and have no physical branches. Because they do not have banking licenses, they usually work with mainstream banks as sponsors, which allows their clients’ deposits to be FDIC insured. Many target specific communities, such as immigrants.
Unbanked and facing systemic barriers
Through her research, Buker found that about 16% of Native Americans are unbanked, consistent with research published in a 2020 FDIC report. That’s the largest ethnic and racial group of unbanked people in the country, she says, a distinction the result of generations of systemic barriers. For example, Native Americans travel an average of three times farther to get to a bank than other Americans, she says. They are also more likely to be credit invisible (no credit at all).
Those are not the only obstacles. For example, people living in remote rural reservations are unlikely to have mail-delivery households. But banks generally do not issue debit cards to such consumers. Other Problems: Many Native Americans have a two-word surname. As a result, their names often appear differently in different reports. They also typically cannot use tribal enrollment cards to verify their identity.
Buker also found that 13% of her potential audience banked with a digital-only entity, but that service “didn’t reflect their values,” she says. The remainder invested in community banks or credit unions, or large traditional players.
In fact, according to Buker, there are only 30 indigenous banks in the country. They are also often small and lack the advanced technology that consumers expect. For most Indians who want easy access to banking apps and other services, the only choice, she says, is a more traditional bank. “But I heard over and over that if you could give me all that and I could get a place that aligns with my values as an Indigenous person, I would do it in a heartbeat,” she says.
Buker also determined that Totem could address some issues unique to Native Americans. One was the issue of benefit programs and services, like that down payment program that she couldn’t take advantage of. Not only are they difficult to access, she says, but even those who sign up still struggle to get the help. The reason: Because many people don’t have bank accounts, tribes often issue paper checks or prepaid cards, mechanisms that are slow and subject to a lot of fees. Buker plans to work with tribes to help them manage the process of raising awareness of these benefits and then spreading them.
After law school, Buker held several jobs advising CEOs and top executives on fintech strategies. In 2020, she moved back to Tulsa and bought a house. Then Covid hit and digital banking exploded. That included multiple neobanks targeting different communities.
But as she looked around, Buker realized there were no Indians. With her background, she already had a solid understanding of the digital banking space from the perspective of community banks and fintech organizations. Perhaps, using that expertise, she could launch her own neobank for her community.
After meeting another Native American woman involved in fintech, she began talking to tribal chiefs, clients and potential investors. In the fall of 2021, she also met Richard Chance, a member of the Cherokee Nation, through Natives in technology, a non-profit organization that creates open source technology for indigenous peoples in technology. He became its CTO and co-founder.
She eventually met Raven Indigenous Capital Partners, the lead investor in a just-announced $2.2 million pre-seed round. Now she and Chance are building the app, with plans to launch it in spring 2023.