The lawsuit filed in 1999 contends Indian farmers and ranchers lost about $500 million because they were denied USDA loans. The government settled a similar lawsuit filed by black farmers more than a decade ago.
At a status hearing on the class-action case, both sides said they were close to a deal. They are expected to meet in court again next week.
Indian farmers have said local USDA officials tried to squeeze them out of business by denying them loans that instead went to their white neighbors. Agriculture Secretary Tom Vilsack says the department is committed to resolving the case.