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Bank serving American Indians passing a milestone

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The turnaround of the last three years started, says Richard West, chairman of the board, when the bank started tightening up requirements for some of the "soggy" loans that weren't being paid back.

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"In the beginning," Mr. West acknowledges, "we made a lot of loans without knowing which ones would be the easiest to suprevise from here. . . . So we have made it clear that except for individual ventures in the D.C. area and the four states around our Albuquerque office, we have backed off." The four states around that loan production office are New Mexico, Arizona, Utah, and Colorado.

Laws prohibiting interstate branching prevent the bank from using that office for anything but processing business and personal loan applications.If those laws are changed, West said, the bank would like to open more branches around the US to serve additional tribes.

The bank is also keeping closer tabs on its loans, West says, by "using collateral to compensate for the distance . . . as long as it's not on the hoof." Collateral is usually heavy equipment or buildings.

Most of the bank's Indian deposits do not come from individuals, he points out, but from tribes or groups of tribes.

"There is no question that the members of Indian tribes are on the bottom of any socio-economic ladder ever devised," he says. "But, by the same token, there are tribes with large assets looking for ways to invest them in such a way as to generate a return." The return they are aiming for, he added, is stronger businesses that provide jobs and income for tribe members.

When the bank was founded in 1973, West notes, the federal government was beginning "some of the most imaginative concepts in the Indian area in 20 years." A number of financing plans, involving both the government and the private sector, were set up to provide money for Indian development. Yet there was no Indian-controlled institution in Washington to keep track of what money was available and help it find its way to the tribes.

Thus, representatives of a number of tribes, including the Yakimas, Unitahs, Utes, and Koniags, founded the American Indian National Bank. Today, it is still owned by these and other tribes and some 365 additional shareholders, including Indian organizations and individual Indians.

Barbara Hughes, marketing officer for the bank's metropolitan division, adds, however, that "you don't have to be Indian to bank at American Indian National."

To prove this, she has been heading the bank's aggressive effort to find business in the Washington area. Much of this effort has been aimed at minority entrepreneurs. to help reach these people, as well as nonprofit and community organizations, the bank has been holding seminars and meetings to answer general business questions and help deal with specific financing issues.

While American Indian National was founded at a time of expanding federal assistance, Mr. West is concerned that the current wave of budget cuts will hit some tribes just as they are starting to see the greatest benefit from the assistance. Cuts in such agencies and offices as the Bureau of Indian Affairs, Economic development Administration, department of Housing and Urban development , and the Comprehensive Employment and Training Act (CETA) will be heavily felt in "Indian country," West said.