A Proposal for a National Tribally Owned Lien Filing System to Support Access to Capital in Indian Country
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This article sets forth a proposal to develop and implement a national, state-of-the-art, all-electronic filing system to support tribes’ secured-transactions laws, with the goal of improving access to capital for tribes, tribal consumers, and, most importantly, independent Native-owned businesses. Tribes are increasingly recognizing the need to establish a sound commercial legal infrastructure, including in particular a modern secured-transactions law, to support sustainable business development. Toward this end, many tribes have adopted the Model Tribal Secured Transactions Act (MTSTA), and many more are in the process of reviewing the act for adoption. Central to the functioning of any secured-transactions law is a publicly accessible filing system, without which a secured-transactions system is incomplete and can’t be deployed to support non-possessory security interests, especially in important income-producing collateral such as accounts, equipment, and inventory. However, the cost of a system that will be credible and trusted by lenders, other creditors, and prospective buyers of assets tends to be beyond the capacity of most tribes. Developing economies across the globe have faced similar challenges, and many have recognized the benefits that flow from implementing the type of filing system proposed by this article. The filing system being proposed would be developed for use and commonly owned by participating tribes that have adopted the MTSTA. The required technology is available and readily adaptable for a single, multi-jurisdictional tribal system, and implementation of such a system would support tribes’ efforts to put in place the legal infrastructure needed to support access to capital in Indian Country. The proposed system would best be housed within a Native American organization with a solid reputation of representing all tribes in the U.S. and whose mission incorporates the promotion of tribal economic development. The costs of establishing, operating, and maintaining an e-filing system are quite modest, and they are estimated to be much lower than even a couple of years ago. The recent reduction in cost does not come at the expense of reduced security or efficiency of the system. On the contrary, it results from the incorporation of technology like blockchain, which would make the system less costly to establish and operate while ensuring the highest level of security and transparency.
