Red Lake Nation News - Babaamaajimowinan (Telling of news in different places)



TOOELE, Utah – Banking behemoth U.S. Bancorp’s (NYSE:USB) lead bank, U.S. Bank National Association, is waging financial genocide against the Skull Valley Goshute Band of Indians of Utah, a federally recognized Native American Tribe. Native American Tribe members are the among most underrepresented and underprivileged individuals in the United States. Yet, U.S. Bank continues to claim the right to tens of millions of dollars that the Tribe would otherwise utilize to secure vital resources for its survival.

Candace Bear, Chairperson of the Tribe, stated “our Tribal government is limited by federal law from engaging in typical revenue-generating activities such as taxation. We rely exclusively on investments like the trusts administered by U.S. Bank to ensure the daily needs of our members are provided for. It is unconscionable that an American financial institution would act to deprive the most disadvantaged people in this country of their investments and financial resources. Anyone doing business with this bank is providing tactical support and encouragement for these devastating actions impacting our Tribe.”

The Tribe is calling on all 574 federally recognized Native American Tribes, current shareholders, institutional investors, businesses and other stakeholders to immediately boycott U.S. Bank in protest of its blatant corporate greed and extreme and manifest disregard for indigenous rights.

The Skull Valley Band filed a lawsuit against U.S. Bank[1] over the rights to residual interests in trusts known as REMICs[2] estimated by the Tribe to be valued at more than US $50 Million.[3] As trustee of the REMICs,[4] U.S. Bank had the right to terminate each REMIC if the principal balance dropped below a certain threshold.[5] However, U.S. Bank was obligated to hold all REMIC assets in trust for the exclusive use and benefit of all security holders, including residual interest holders. Further, unless permitted, U.S. Bank could not assert any claim or interest in the trust assets.

Meanwhile, as interest rates declined, the residual interests owned by the Tribe grew significantly more valuable.[6] Recognizing this, U.S. Bank purchased the remaining trust assets for less than their fair market value and re-sold them to third parties for substantial profit. Instead of distributing those proceeds to the residual interest holders, U.S. Bank kept the profits for itself.

In two precedential cases on nearly identical facts,[7], the court found that there was a viable breach of contract case against U.S. Bank for retaining the profits owed to REMIC residual interest holders. In one case,[8] the court characterized U.S. Bank’s position as “Heads I win, Tails I win,” finding that it had no right to pocket the residual interest holders’ assets at termination.

One of U.S. Bank’s principal defenses against the Tribe is that because it is a federally recognized Native American Tribe, it is somehow different than the plaintiffs in these cases. In certain ways, U.S. Bank is correct. According to the National Congress of American Indians, “Tribal nations ceded millions of acres of land that made the United States what it is today and, in return, received the guarantee of ongoing self-government on their own lands. The treaties and laws create what is known as the federal ‘trust responsibility,’ to protect both tribal lands and tribal self-government, and to provide for federal assistance to ensure the success of tribal communities.”

Under this trust arrangement, Native American Tribes rely on the United States government, as trustee, to protect their beneficial resources and interests. Over centuries, mismanagement of Tribal resources by the United States has forced Tribal governments to litigate breach of trust claims to defend their beneficial rights in the trust arrangement. In one of the largest class actions ever filed against the United States,[9] a member of the Blackfoot Nation sued for mismanagement of the trust funds of over three hundred thousand individual Tribal members. After thirteen years of litigation, the Obama Administration settled the case for $3.4B.

Native American Tribes like the Skull Valley Goshute Band cannot and do not rely on settlements like this to ensure their survival or the survival of their members. Tribes affirm their sovereignty by making their own investments, and the outcomes of those investments amount to life-or-death stakes for Tribal members. In a series of events reflective of those in the class action, the Skull Valley Goshute Band is now forced to litigate against a trustee tasked with protecting its beneficial interest in trust. Likewise, U.S. Bank’s actions perpetrate an ongoing financial breach against Native American Tribes that originated long ago and continues, albeit through more complex mechanisms like REMICs, into the modern day.


[1] Filed January 28, 2020 in the Supreme Court of New York Case No. 1:20-cv-01704. U.S. Bank subsequently sought to have the case removed to the United States District Court for the Southern District of New York, seemingly to avoid the application of two cases decided against it by the Appellate Division of the Supreme Court of New York on nearly identical facts.

[2] REMICs are real estate mortgage investment conduit trusts, which hold pools of mortgage-backed securities.

[3] Almost two decades ago, certain investment banks, acting as “sponsors,” purchased mortgage-backed securities and pooled them into REMICs. To close the deals, the sponsors paid the Tribe to obtain the residual interests, and in exchange, the Tribe assumed all liabilities associated with residual interest ownership.

[4] When U.S. Bank acquired State Street Corporation’s corporate trust group in 2002, it took over as trustee of the REMICs and began earning trustee commissions under the governing trust agreements.

[5] U.S. Bank could terminate a REMIC by either purchasing or selling the residual trust assets. This “clean up call” option protected U.S. Bank from having to perform its duties if the cost of doing so became higher than the trustee fee.

[6] The interest rates for the mortgages in the REMICs were high, at 7-8%, and these rates grew comparatively more valuable to market rates.

[7] Cece & Co. Ltd. v U.S. Bank N.A., 2017 NY Slip Op 05924 and NMC Residual Ownership L.L.C. v U.S. Bank N.A., 2017 NY Slip Op 05923. The REMICS in these cases were governed by nearly identical trust agreements to those governing the Tribe’s residual interests.

[8] Cece & Co. Ltd. v U.S. Bank N.A., 2017 NY Slip Op 05924.

[9] Cobell v. Salazar, 573 F.3d 808 (D.C. Cir. 2009), filed by Elouise Cobell and others against the United States Department of the Interior.


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