Here. Titled “Frozen Homeland.” The blurb: “How the Lac Vieux Desert tribe funds propane for its enrolled members when the tribe finds its homeland frozen in the harshest winter they’ve ever known.”
tribal payday lending
Suit against Lac Vieux Desert Band over Tribal Payday Lending
Here is the complaint in Decker v. RS Financial Services LLC (W.D. Okla.):
An excerpt:
1. This is a lawsuit to recover damages arising from the Defendants’ unconscionable loan/pawn finance charges, which are far in excess of any state’s usury limits.
2. Upon information and belief, RS Financial Services, LLC (“RS Financial”) and Sovereign Lending Solutions, LLC (“Sovereign”) are related entities owned and controlled by Defendant William McKibbin (“McKibbin”), and are in the business of making loans at usurious interest rates.3. Sovereign claims to be an arm of and affiliated with Defendant Lac Vieux Desert Band of Lake Superior Chippewa Indians (“Lac Vieux Tribe”), and to be afforded governmental sovereign immunity.
4. Upon information and belief, the Lac Vieux Tribe receives a fee for allowing Sovereign to claim this affiliation. However, even if the affiliation between Sovereign and the Lac Vieux Tribe was otherwise valid, the conduct alleged in this Complaint is not protected by governmental sovereign immunity.
Tribal Lending and the Consumer Financial Protection Bureau
Hilary B. Miller has published “The Future of Tribal Lending under the Consumer Financial Protection Bureau” in the ABA trade journal Business Law Today.
LA Times on Tribal Payday Lenders
New Article in ABA Trade Journal Article on Tribal Payday Lending
The ABA Business Law Section’s journal, Business Law Today, has published “The Future of Tribal Lending Under the Consumer Financial Protection Bureau.”
An excerpt:
Some Indian tribes – particularly impecunious tribes located remotely from population centers, without sufficient traffic to engage profitably in casino gambling – have found much-needed revenue from consumer lending over the Internet.
In a typical model, the tribe forms a tribal lending entity (TLE) that is financed by a third party. The TLE then makes loans over the Internet to consumers nationwide, usually on terms that are unlawful under the internal laws of the states where the borrowers reside. Because the TLE is deemed an “arm” of the tribe, the TLE benefits from the tribe’s sovereign immunity. As a result, the TLE may be sued only under very limited circumstances; and, perhaps even more importantly, the TLE is exempt from most state-court discovery intended to unearth the economic relationship between the TLE and its non-tribal financier.
Because this model has, at least to date, provided a relatively bulletproof means to circumvent disparate state consumer-protection laws, the model has attracted Internet-based payday and, to a lesser extent, installment lenders. Although data are spotty, it is likely the fastest-growing model for unsecured online lending. Tribal sovereign immunity renders this model the preferred legal structure for online lenders desirous of employing uniform product pricing and terms nationwide, including for loans to borrowers who reside in states that prohibit such lending entirely.
The tribal model is increasingly being adopted by online lenders who had formerly employed other models. Yet the legal risks of the model to those who would “partner” with TLEs are rarely emphasized.
Turtle Talk 