Catawba Indian Nation Passes Banking Code to Attract Banks and Fintechs
Last month, the Catawba Indian Nation in South Carolina passed a banking code to attract both traditional and new financial activity to its reservation. It is headed by the Catawba Digital Economic Zone (CDEZ), a legal entity that was created to help increase economic growth in the area.
“This is an example of a tribe moving beyond simply governing the gaming space, cannabis or payday lending, but being a full-service governing body for businesses in their jurisdiction,” said Joe McKinney, CDEZ CEO, according to Banking Dive. McKinney has been leading the tribe’s economic development efforts for the last several years.
The code is designed after existing codes in South Dakota, North Dakota, and Wyoming, but McKinney said the bulk of it is modeled after that of South Dakota. He noted that the states the CDEZ modeled their code after have financial frameworks that demonstrate a commitment to managing innovative financial activity.
The CDEZ hopes to eventually obtain regulatory approval for new banks to be able to receive charters under the laws of the reservation’s federally recognized land. McKinney emphasized that under the U.S. Constitution, tribal governments are in the same position as states when it comes to business regulations and commercial law.
Another goal of the CDEZ is to charter a public bank like North Dakota, which would serve as a regulator for bank charters and promote capital access for both Catawba citizens and banks. The CDEZ is also in the process of establishing a banking commission, which would review charters and administer bank examinations.
McKinney predicted that the bank charters could be enticing for both new banks and fintechs.
“Maybe some of the high-quality neobanks that have best practices and quality teams, that can pass our vetting through our charter system, could be banks themselves,” he said.