Building Native CommunitiesFINANCIAL SKILLS FOR FAMILIES

Fifth Edition

INSTRUCTOR GUIDEP A R T I C I P A N T ’ S W O R K B O O K

Buildi

ng NativeCommunities

Financial Skills for Families

F O U R T H E D I T I O N

Chapter JBNC:FSF Session 6 Best Practices and Training Techniques

AcknowledgmentsThis 2016 version of the Building Native Communities: Financial Skills for Families - Intructor Guide was compiled and written by Krystal Langholz, Caleb Selby, Sarah Dewees, and Shawn Spruce. A debt is owed to Vickie Oldham-John and Natasha Shulman and their Advisory Committee for writing the previous edition of this guide. We thank The Rose Foundation and the Paul G. Allen Foundation for funding this project and we thank the Fannie Mae Foundation for supporting this project in its earliest phases.

In 2000, First Nations Development Institute and the Fannie Mae Foundation developed the personal financial education curriculum Building Native Communities: Financial Skills for Families. The curriculum has been revised several times, and in 2016 First Nations Development Institute and First Nations Oweesta Corporation finalized the 5th edition of the Building Native Communities: Financial Skills for Families curriculum and this Instructor Guide. First Nations Development Institute and First Nations Oweesta Corporation thank The Rose Foundation and the Paul G. Allen Foundation for funding this revision. To accompany the revised participant workbook, First Nations Development Institute and First Nations Oweesta Corporation worked with an Advisory Committee of practitioners led by Caleb Selby, Krystal Langholz, Sarah Dewees, and Shawn Spruce to create this Instructor Guide. We would like to thank the following individuals for their assistance, careful reading, and feedback: Arnold Blum, Gallup Central High School; Lisa Garcia, Salt River Financial Service Institution; Sunny Guillory, Northwest Indian College; Christopher Hansen, First Nations Oweesta Corporation; Spawn Spruce, Independent Consultant; Dawn Wesley, Tlingit-Haida Housing Authority; Tawny Wilson, First Nations Development Institute; and Shawn Winters, Chi. Ishobak, Inc. A special thanks also to TM Design for providing design and layout services.

DisclaimerAll names and examples provided in the Building Native Communities: Financial Skills for Families 5th Edition Instructor Guide are fictional. Any resemblance to actual individuals or their financial situations is coincidental. The Building Native Communities curriculum is intended to be used as guidance and should not be relied on as legal or tax advice. Please seek the counsel of a qualified attorney or tax professional for further assistance. The authors and publisher are solely responsible for the accuracy of the statements and interpretations contained in this publication.

More InformationTo obtain additional copies of this workbook, more information about training opportunities for your community, or to become a certified instructor, please visit the First Nations Oweesta Corporation website at www.oweesta.org or email info@oweesta.org. You can also access these materials at www.BNCweb.org.

© First Nations Development Institute and First Nations Oweesta Corporation 2016.

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This chapter is designed to help you teach the Building Native Communities: Financial Skills forFamilies curriculum. It has ideas for games, exercises, and teaching techniques that will enhanceyour delivery of Session 6. Answers to the exercises in this session are provided in Chapter K:Answer Key.

Session Description

This is the last session in the curriculum. Participants will:· Identify pre-European Native economic systems.· Discuss types of financial institutions.· Learn how to avoid predatory lenders.· Become savvy consumers. · Recognize the importance of insurance.

Games and Teaching Techniques

As participants often benefit from seeing concepts explained in several ways, the following section presents games and teaching techniques for specific topics and exercises. See the Training Techniques chapter for general ideas that can be applied to any exercise.

Financial Systems Before European Contact – Page 119The active inter-tribal trading routes before European contact are a point of pride and interest. If possible, invite a community elder or historian to share stories about the local trading routes and currencies that were developed and used between communities.

Types of Financial Institutions – Page 120While choosing a financial institution is a personal choice, many people are not informed about the different products and services provided. Come prepared with a list of local institutions including pawnshops, grocery stores (if they offer credit), trading posts, casinos and payday lenders.

In rural communities that do not have access to different types of financial institutions, focus on how people take care of their financial needs, and identify some real world examples that make sense in those communities.

Chapter J: Best Practices for Session 6

for Building Native Communities: Financial Skills for Families

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Try to avoid bank bashing. Instead, focus your discussion on actions people can take if they are not happy with their institution (e.g., report their experience to customer service or find another financial institution).

Types of Financial Institutions Exercise – Page 1211. Take photos of all local financial institutions before your class begins. Have either physical or

digital copies of each photo. 2. Draw the table on page 121 of the Participant’s Workbook on a flip chart. 3. Show each photo to the class and let them advise you on where the photo should be placed. In

other words, for each photo, ask your participants “Which type of financial institution in shown in this photo?” The photo can then be taped or stuck to the appropriate cell of the table on the flip chart.

Not All Lenders Are the Same: Predatory Lending – Page 122Unfortunately, predatory lenders are still active in most communities. In 2007, First NationsDevelopment Institute conducted a survey of attendees at a Native American Housing AssistanceCouncil conference. Over 73% of the respondents stated that predatory lending was either “a bigproblem” or “somewhat of a problem” in their communities. Respondents reported problems with payday loans, pawn shop transactions, car title loans, and loans against tax refunds.

Help participants become aware of the different types of predatory lenders and how they appeal to customers. Bring in advertisements and make notes of radio or television ads. Consider visiting or calling a few predatory lenders so that you can relate the experience to participants. Ask your participants, “Which local lenders would you consider predatory?”

Call the local Attorney General’s Outreach office. At no cost to your program, they are often willing to come and speak about predatory lending and identity theft.

Predatory Lending Advertisement 1. Divide participants into groups.2. Ask each group to create an advertisement, commercial or jingle to sell predatory

lending services.3. Ask each group to present their ideas.4. Discuss the techniques used by predatory lenders to lure people into working with

them.· How do predatory lenders appeal to customers?· Why do people choose to go to these lenders instead of a mainstream financial

institution?

Additional Exercise:

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Money Math – Page 123This is the most in-depth Money Math in the Participant’s Workbook thus far. Have your participants: 1) Read through the text on the top of page 123. 2) Once they have read the text and familiarized themselves with the two tables, they should

understand the different options available to buy the car. Have your participants answer the question in the middle of the page.

3) Your participants should now answer the four questions on the bottom of the page.

The important lesson in this Money Math is that higher monthly payments allow you to pay less in interest. Be sure that your participants see evidence of that lower total interest payment in the tables.

Answer: A higher monthly payment is cheaper because interest charged totals less with higher monthly payments than with lower monthly payments.

Discussion Questions: 1) The pros and cons of “buy-here, pay-here” are listed below: a. Pros i. Folks who are normally unable to purchase a car can do so at “buy-here pay-here”

dealerships. ii. These dealerships are readily accessible. b. Cons i. These dealerships traditionally charge higher interest rates. ii. Hidden fees are often associated with “buy-here, pay-here” dealerships.

“Buy-here, pay-here” dealerships are not necessarily predatory lenders, but they could be. Each dealership would need evaluated independently.

2) Yes; a prospective car buyer should know their credit score before heading to the dealer. 3) The loan officer wants to encourage you to take a lower monthly payments because it will make

their business more money in the long run.4) Examples of “garbage fees”: documentation fees, advertising fees, dealer fees.

Joanna’s Predatory Lending Experience Complete the Predatory Lending exercise in Appendix J-1. This is a way to discuss situations where people come into contact with predatory lenders. If your participants do not own their own homes, you can substitute a more realistic example. The following steps can be used to facilitate this exercise:1. Ensure that the Predatory Lending exercise in Appendix J-1 is relevant to your

participants’ experience. If it is not, retype the story with a more appropriate example. Photocopy the exercise for participants.

2. Divide participants into small groups and have them read the story.3. Ask participants to present their answers and discuss the issues as a group.4. Record their answers to the questions on a piece of flipchart paper.

Additional Exercise:

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Glenda’s Payday Loan Saga – Page 124 and 125Guide your participants through each ‘bubble’ of Glenda’s Payday Loan Saga. Ask your participants if they have any questions about what happens at each stage.

On a flip chart or white board, list all the fees from each bubble. Then, total those fees up. The Participant’s Workbook already shares the total amount of fees that Glenda had to pay, but listing each fee and then totaling those fees removes all doubt that small fees over the life of a payday loan can be very damaging.

How To Be a Savvy Consumer – Page 126There are four ideas detailed in this section that savvy consumers understand every time they make a purchase. Ask your participants, “If you were buying a new television, what would be the specific actions associated with each of these ideas?”

Negotiation – Page 128Refer participants to the illustration on page 128. Review the tips for negotiation. Remind participants that it is important to learn negotiation skills. Negotiation it is an important part of being a savvy consumer. If you feel comfortable, tell a story about when you had to negotiate the price on something, like perhaps an experience you had purchasing a car. Or you can ask your participants to share a story they might have about negotiating the price for something. Did they use any of the techniques covered on page 128?

Feel Like You Need to File a Complaint? – Page 129Consider visiting the Consumer Financial Protection Bureau’s website in class. By clicking on the “Get Assistance” tab, you can show your participants some of the services available to them.

Wallace Goes Truck Shopping Exercise – Page 129It’s fairly clear that Wallace made a bad choice buying the truck when he did. But, challenge your participants to rewrite the scenario using an empowered and knowledgeable Wallace. How can Wallace’s bad decisions be changed into good decisions? Encourage your participants to create dialogue around the exchanges between the salesperson and Wallace. They can even act out the revised situation in the front of the class.

Insurance – Page 130Start the discussion on insurance generally. How do you protect what is important to you? Native communities feel that insurance is family; strong family bonds are created and relied upon in times of trouble. Insurance helps protect larger assets, such as a house or car.

Often times when insurance is brought up, participants are inclined to talk about instances in which insurance saved them a lot of money or hassle. Allow your participants to answer the questions on page 130, and if organic discussion arises around insurance, let the class talk freely for. The free discussion can reduce animosity around insurance.

Types of Insurance – Page 131Instruct your participants to go through all the text on page 131. There is an overload of information here. Recommend to your participants that they write short summaries or annotations next to each explanation to retain the dense text.

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Invite an insurance representative to talk about the different types of insurance. Make sure that the representative approaches this as an educational visit and not a sales call. Investigate if there is a tribal human resources representative who may also be able to share information.

Each type of insurance has many different providers. Be sure to discuss the importance of shopping around just as you instructed them to shop around for the best financial institution.

Life Insurance – Page 132Some communities are uncomfortable talking about death. If this is the case, then skip the discussion about life insurance and focus on the other types of insurance. Highlight the importance of protecting your family and all that you have worked to achieve. Approach this just like you approached loan applications: carefully and intentionally.

Rachel’s Life Insurance Exercise – Page 135If life insurance is a new topic for your participants, they may need guided through this exercise. All of the questions can be answered by referring to the text on the previous two pages.

This exercise can be conducted in small groups or individually.

Native Americans and the Affordable Care Act – Page 136Consider visiting www.ihs.gov in class to show your participants their responsibilities under the Affordable Care Act. YouTube can be utilized to explain the Affordable Care Act in simple language. Search “The Affordable Care Act Explained” and several useful videos will populate.

Out of Pocket Insurance Expenses – Page 136Discuss the fact that many insurance plans have “out of pocket” expenses, or things you may end up paying for even though you have insurance. Review the concepts of a co-pay, co-insurance, and a deductible and make sure your students are comfortable with those ideas.

Choosing Insurance Products – Page 137Consider visiting www.consumerreports.com to see how locally popular insurance providers are rated. A common theme in this session of the Participant’s Workbook is purchasing in an educated manner. Ask your participants, “How are the steps outlined on pages 137 and 138 similar to the steps to being a savvy consumer?”

Your Circle of Life – Page 139This narrative is a throwback to an initial exercise from Session 1. Participants should now be more empowered to answer the questions bulleted on page 139.

Circle of Life: Financial Checklist – Page 140In this section, the main financial periods of a person’s life are broken up into four major segments that correspond to the seasons of a year. Each season has a checklist associated with it that you can go through with your participants.

This section is an appropriate end to the BNC:FSF curriculum. Participants can refer to these pages as a summary of the entire curriculum and as a reference to make sure that are reaching their long-term financial goals.

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Homework Ideas

· If your participants have anything that has been passed down by their ancestors that was traded between different Native communities, ask them if they would be comfortable bringing it into class to show other participants. Some participants may not be comfortable with this activity, so be sure to encourage it only if participants are comfortable with it.

· Assign each participant a different product which they will then research. Several participants can have the same product. Ask them to research different vendors that offer that product and then narrow down the vendor with the best price and best quality. In essence, by assigning different products to each participant you are providing an opportunity for them to put to practice being a savvy consumer.

· Encourage your participants to investigate the different insurance providers that exist locally. If they are not pleased with local options, have them shop around online. Break the insurance providers down by type. Finally, encourage them to compare the different amounts of co-pay, co-insurance, and deductible required by each provider to see which providers make the most sense for their family. If your training spans several days, consider having participants compose a list of providers they found, characteristics of each provider, and then present that information to the class.

Commonly Asked Questions

The following question came up in the past during this session. Often, there are no right or wrong answers to participant questions. Try to take questions that you are asked and pose them to the group for discussion before you share your opinion.

Question: What insurance provider should I choose?

Answer: Selecting an insurance provider is a personal decision. If there are options in a community, encourage participants to visit them and determine which organization meets their insurance needs while providing the best customer service. Encourage participants to get price quotes from several insurance providers.

Question: What do I do if I find myself in a situation where a predatory lender is trying to sell me something?

Answer: Always know that if the customer feels pressured from a lender, they can simply ask the lender to slow down and speak in simple terms. Depending on the situation, any number of reactions are appropriate as long as it is fully understood what the lender is trying to sell and the customer does feel pressured. Simply leaving the predatory lender if the customer feels that they are getting coerced into a loan that does not fairly serve them is appropriate too.

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Appendix J-1: Predatory Lending Exercise

Joanna’s StoryLaid off after 29 years of working for a local company, Joanna was struggling. Although she had a part-time job driving a school bus, she was not earning enough to pay her bills. When she received a call from a man who said he could help her come up with some cash, it seemed like a godsend. The man said he worked for a home improvement company and that he could find her a loan that would both pay for some remodeling on her house and leave enough cash left over to pay her bills. Unfortunately for Joanna, the salesman actually worked for a mortgage broker, and he was not peddling home improvement, but a refinancing of her existing home mortgage at a high interest rate. He invited Joanna to his office, where he chatted with her while he filled out a mortgage application for her. While he indeed gave her a “good-faith estimate” – a form required by regulators that lists the proposed interest rate and fees on a loan-the loan he wrote up was not a home equity loan for the $6,000 she needed to pay off bills. It was a loan for $76,500 that refinanced her entire mortgage at a higher interest rate. A couple of weeks later Joanna signed the loan papers and walked out with a check for $1,900. The signing went by so fast she didn’t catch all that was written on the pages. But she trusted the broker and the lawyer in the room and felt she had a pretty good grasp on what she was signing. What Joanna didn’t realize was that her loan terms had changed since she received the good-faith estimate. The broker added $6,500 in fees to her loan and changed the loan from a fixed-rate to a more expensive adjustable-rate mortgage. Joanna was a victim of predatory lending.

Questions:1. What does the word “predator” mean?

2. How would you define predatory lending?

3. What are some things you might do to avoid being in the same situation?

This exercise is adapted from a piece by Jeanette Bradley and Peter Skillern and can be found in the Fannie Mae Foundation’s Money Management and Homebuying Readiness Sourcebook for Teachers for ESOL and ABE.

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Notes