Most tribal communities have inadequate banking and financial services. In order to fill this need, tribes are increasingly exploring forming their own banks or credit unions. Reasons for these initiatives may include (1) removing cultural barriers that sometimes prevent tribal members from applying for loans from commercial lenders, (2) encouraging entrepreneurship among tribal members by making credit more available than is currently available through local banks, and (3) replacing tribal loan programs with a structure that is more business-like and which enables the tribe to minimize defaults and increase collections, and (4) making a profit for the tribe.

In order for tribal governments to evaluate the feasibility of a tribal lending institution, they need to understand the various types of lending institutions in order to decide which would best meet the Tribe's needs. It is also necessary to determine the federal deposit insurance requirements and the regulatory obligations that a tribal lending institution would have under state or federal law and assess how the Tribe might meet these obligations (e.g. with existing personnel, hiring consultants, partnering with another lending institution, etc.). In considering its options concerning the type of lending institution to be formed, tribal government should take into account the demands that each type of lending institution may make on the tribe's personnel and financial resources.