Tag: tribe payday loans

24
Jun

Payday Loan Store-Front Businesses: More Ammunition

OETA did a piece on the Oklahoma payday loan industry. In the video, the DA makes the statement that he would prefer store-front payday loan lenders be allowed in the state with some restrictions rather than outlaw the industry and force Oklahoma payday loan consumers to solve their financial challenges with Internet companies. 13% of Oklahoman’s have gotten a payday loan in the past 5 years.

The content of the video makes many derogatory references to tribe payday loan companies, emphasizes the few complaints received by the BBB regarding Oklahoma payday loan stores, and includes several interviews of real-world payday loan customers. These interviews confirm that the payday loan product is not without its controversies BUT does meet a real need in the market place of financial choice.

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15
Jun

Western Sky Ordered to Cease Payday Loans in Maryland

Western Sky Financial Payday LoansBy Jer  with Trihouse Consulting ~ The tribe payday loan business model has been around since at least the late 1990’s. In the “early days,” individual tribe members collaborated with lenders to circumvent state and province usury and licensing requirements. Although this rendition of the tribe sovereign model is no longer employed, there still remains outstanding litigation and regulatory challenges that continue. The Martin Web and Western Sky controversies are part of this ongoing story.

Western Sky has always described itself as “wholly owned by an individual member of the Cheyenne River Sioux Tribe;” not by the tribe or any of its political subdivisions. It refers to itself as a Native American-owned business operating within the exterior boundaries of the reservation, a sovereign nation within the U.S.

Western Sky Financial, “located” on the Cheyenne River Reservation Timber Lake, S.D., has said it was not required to follow Maryland law because of tribal immunity, according to the Maryland Department of Labor, Licensing and Regulation.

The Maryland labor department’s Division of Financial Regulation said Thursday it has issued a final cease and desist order against Western Sky, its owner Martin Webb and other related parties. The order also prohibits the company from collecting or attempting to collect on any loans made to Maryland consumers. The company has the right to appeal the final order to Maryland Circuit Court, said Mark Kaufman, commissioner of financial regulation.

With the aid of Wall Street and sophisticated tribe legal counsel, the payday loan industry has evolved significantly since the early days of what was once referred to as “the rent-a-tribe model.” Much like the gaming industry, there are today, legal methods and strategies available that enable geographically challenged tribes lacking sophisticated resources to collaborate with “capital” and expertise in serving the millions of consumers who want and need small dollar loan products to help them solve their temporary, short-term financial challenges.

For more on this topic: Allen Parker at Consultants4Tribes.com  

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01
Feb

Payday Loans: “SAFE Lending Act”

Time to rally the troops and support your trade group? (FISCA, CFSA, OLA, NAFSA, and your state association) Good for “brick-n-mortar operators? Will your valuations increase? Would this force borrowers to abandon online lenders,  jump-into their automobiles and drive to a payday loan store? It’s no wonder so many payday loan lead generators are exploring direct lending via the tribe model. Google has been leaning hard on them. Now the FED’s are eyeballing them! More on all this later. Here’s the meat.

January 29, 2013: Senators Introduce Bill Attacking Online Payday Loans

The SAFE Lending Act has four main provisions:

  • Ensures That Consumers have Control of their own Bank Accounts
  • Ensures that a third party doesn’t gain control of a consumer’s account through remotely created checks (RCCs), which are checks from a consumer’s bank account created by third parties. To prevent unauthorized RCCs, consumers will be able to preauthorize exactly who can create an RCC on his/her behalf (such as when traveling).
  • Allows consumers to cancel a debit (just like they can cancel a check) in connection with a small-dollar (payday) loan. This would prevent an Internet payday lender from stripping a checking account without a consumer being able to stop it.
  • Closes Loopholes and Creates a Level Playing Field In State Usury Law Enforcement
  • Requires all lenders, including banks, to abide by state rules for the small-dollar, payday-like loans they may offer customers in a state. Only states, not the federal government, have laws to prevent 400% APR loans.
  • Bans Lead Generators and Anonymous Payday Lending.Some websites describe themselves as payday lenders but are actually “lead generators” that collect applications and auction them to payday lenders and others. This practice is rife with abuse and has even led to fraudulent debt collection.
  • Stops Offshore and Other Illegal Online Payday Lending in Violation of State Law
  • Gives the Consumer Financial Protection Bureau authority on its own behalf and upon petition by state Attorneys General or other local regulators to shut down payment processing for lenders that are violating State and other consumer lending laws through the Internet.
    Carefully constructed not to negatively impact the Internet.

Oregon’s Senator Jeff Merkley, Senator Tom Udall (D-NM), Senator Dick Durbin (D-IL) and Senator Richard Blumenthal (D-CT) introduced the Stopping Abuse and Fraud in Electronic (SAFE) Lending Act. The SAFE Lending Act would crack down on the worst practices of the online payday lending industry and give states more power to protect consumers from predatory loans.

“We threw the payday lenders, who prey on families when they’re at their most vulnerable, out of Oregon back in 2007,” said Merkley. “Technology has taken a lot of these scams online, and it’s time to crack down. Families deserve a fair shake when they’re looking to borrow money, not predatory loans that trap them in a vortex of debt.”

“Too often, families who turn to payday lending fall victim to deceitful practices that make it harder for them to make ends meet. With payday lending moving online, the opportunities for abuse are growing,” said Udall. “We owe it to those who earn an honest paycheck to ensure they are protected online just as they are in many of our states, like New Mexico.”

“Even as our economy begins to show signs of recovery, many hardworking families are still struggling to make ends meet,” said Durbin. “Unfortunately, many of these families are the targets of lenders offering payday loans with outrageous, often hidden interest rates that can have crippling effects on those who can afford it least. This bill will protect consumers and law-abiding lenders and I hope we can move it quickly on the floor.”

“The abusive and arbitrary practices of online payday lenders need to be stopped,” said Blumenthal. “Too often these lenders saddle vulnerable families with debt – creating a vicious cycle that makes them more vulnerable. This bill will protect consumers from this predatory industry.”

The legislation is endorsed by Americans for Financial Reform, Center for Responsible Lending, and the Consumer Federation of America.

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25
Sep

Tribe Payday Loans- The Native American Financial Services Association (NAFSA) Fed’s Continued Commitment

We discuss the entrance of Native American Tribe lending  in regards to payday loan, car title and other microlending niches often. Thanks to Allen Parker at Consultants4Tribes.com for bringing this important news to our attention:

WASHINGTON (September 25, 2012) – The Native American Financial Services Association (NAFSA) today applauded the Senate Committee on Indian Affairs’ continuing commitment to the enduring strength of federal-tribal relations.

During the hearing on Thursday, September 20, 2012, the Senate Committee on Indian Affairs made it clear that the tribes have the undisputed right of self-governance and self-determination. Indeed, testimony throughout this hearing repeatedly reinforced the principle that self-governance and self-determination are fundamental components of Native American culture and vital elements of every Native American community across the country.

Read the entire piece here: Allen Parker

Through the protection of consumer rights and sovereign immunity, NAFSA provides vital services to tribally operated lenders serving the under-banked with better short term financial services, furthering economic development opportunities in Indian Country.

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04
Aug

Tribes Fight Over Off-Reservation Gaming – The Future is Online Businesses

An interesting New York Times article regarding tribe gaming and current thoughts on tribal off-reservation gaming and strategies for tribe Internet enterprises:

“… still, he was worried that the good times would not last. With the state eager to get a greater share of gambling revenues, Mr. Hoffman said he believed that other forms of non-Indian gambling, particularly online operations, could become legal. “I don’t think the tribes 20 years from now will still have an oligopoly on gaming,” he said.

More from the NY Times piece, “Since Indian gambling was legalized in the United States in 1988, only five tribes have gotten final clearance to build casinos off their reservations. The intense campaign against Enterprise and the other applicant, the North Fork Rancheria of Mono Indians, comes as the gambling market has grown crowded, especially here in California.

Opposing tribes accuse the newcomers of encroaching on areas to which they have no historical ties. “We have other tribes out there doing what we call reservation shopping,” said Brenda Adams, the treasurer of United Auburn. “We played by the rules. We had to stay on our historical lands. They call it equal footing, but is it? We’d like to have a casino in downtown San Francisco, but that’s not our territory.”

“The tribe, which used to oppose the off-reservation casinos but is now publicly neutral, has felt the need to diversity beyond gambling. “Too many eggs in one basket is probably not a good thing,” said Marshall McKay, the tribal chairman.”

Personally, I wonder why should tribes have to wait for a state governor to give them permission to participate in revenue generating businesses that benefit tribe members. Who needs off-reservation enterprises when the Internet can be employed? These businesses could be focused on a multitude of niches including financial services, education, insurance, online poker, buying and selling bulk commodity chemicals, polymers and fuel products…

The game for the tribes is on! It’s time to implement whatever current business advantages they can identify before the game changes again.

Here is the link to the original New York Times Article. Lucrative Gambling Pits Tribe Against Tribe.

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