When Amber Buker tried to purchase her first home, she went in circles between her lender and her Native American tribe.
Buker’s mom recalled that as an enrolled member of the Choctaw Nation of Oklahoma, she was eligible for a down payment assistance program. But representatives of the tribe were not able to help her figure out eligibility, and her lender was not willing to communicate with the tribe. Buker had to wait two more years before she could buy her first home in 2018, and it was without the benefit of this program.
“I remember thinking, if I just had a bank that understood what it is to be Native, what these tribal benefits are that we have access to, this whole thing could have gone differently,” she said.
Several years later, she is creating that bank herself.
Totem, the first challenger bank for Native Americans, will go live in early 2023. It will address a group that is currently served by several dozen dedicated banks, credit unions and community development financial institutions, according to
The American Indian and Alaska Native population in combination increased by 160% from 2010 to 2020, according to Census data. These groups accounted for 1.1% of all people living in the U.S. in 2020, compared to 0.9% in 2010. At the same time, they are severely
Native American reservations have some of the country's highest concentrations of unbanked households. But tribes are finding ways to get their members access to capital — with or without banks.
Totem’s playbook may be of interest to other neobanks, even though it targets a narrow audience. Instead of relying solely on interchange fees to make money at the outset, as many banking startups do, Buker and her co-founder Richard Chance plan to partner with individual tribes to white-label their app, for a fee.
Buker met Chance, an enrolled member of the Cherokee Nation, through Natives in Tech, a nonprofit that helps Native American technologists network, build open-source tools and more. She recruited him in the fall of 2021 as a co-founder, chief technology officer and the Totem app developer. As of June 1, Chance dove full time into work on Totem; Buker made the same transition as of July 1. Previously, she was the director of insights at the Alloy Labs Alliance, a consortium of community and midsize banks.
“It was important for me to find a co-founder who was Native and to have a Native-built product,” Buker said.
It was also important for her to produce a digital bank that could be available nationwide. Buker says that Native American-owned banks are typically small, with a few branches, and limited to a specific geographic territory. At the same time, the majority of Native Americans are born “off reservation,” meaning they likely don’t live near their tribal bank.
“This is a bank for both sides — the people with close relationships to their tribe and a national audience that may not be as closely tied to their Native heritage, but they do identify that way,” she said.
The initial version of the app will include a checking account, debit card, a
Native Americans "get targeted with a lot of paid credit coaching that is expensive, so it was important for us to have that credit builder piece,” she said.
Later iterations will incorporate features that are not specific to banking, namely a powwow finder and a charitable giving mechanism.
The powwow finder will let users search for “contest powwows,” which typically unite several tribes in a celebration that involves drumming, singing and competitive dancing. Buker says it is difficult for Native Americans to locate powwows; she typically hears about these festivities while scrolling through Facebook. The charitable giving feature will help users locate indigenous-led projects or causes that benefit indigenous people.
“It’s a way to create a space that is not just about your finances, but what it means to be Native,” said Buker.
The direct-to-consumer app will be open to everyone, regardless of tribal affiliation or blood quantum (the “amount” of Native American ancestry that is required for some tribal enrollments). Buker and Chance also plan to partner with tribes who want to white-label the app. Tribe-specific versions could feature that tribe’s colors, language and a way to distribute tribal benefits electronically.
Buker said tribes get money from the government that they can distribute in the form of benefits that best suit their tribes. These may include down payment assistance, money for burials, auto loans and school supplies, and are typically disbursed via paper check or prepaid card. The goal is to send them to tribally branded Totem bank accounts.
This will provide another stream of revenue beyond interchange, which most challenger banks rely on when they debut.
“I never want to build a business model solely reliant on a single source" of income, Buker said.
Jason Henrichs, the CEO of Alloy Labs, agrees with that premise. He is a general partner of the Alloy Alchemist Fund, a bank-led fund participating in Totem’s pre-seed funding round.
“Interchange models are doomed to fail,” he said. He adds that interchange may experience further pressure as inflation rises. “There is not enough money in it to go around between the startup, the issuing bank and any platform that is trying to take a bite of that apple.”
He appreciates that Totem’s business model does not revolve around interchange.
“This is a community that is well defined and has a unique set of needs,” he said. “What I like about Totem is there is real value delivered that they can monetize outside of interchange.”
