We promised our Trihouse readers a follow-up to the Tribe-Scott Tucker Part 1 piece we Posted last week. The “sovereign nation” model offering payday loans, car title lending and a multitude of other custom-built consumer loan solutions is gaining traction RAPIDLY. Faced with a multitude of complex state consumer finance laws and the new CFPB, lenders are scrambling to employ creative business models to meet the borrowing demands of millions of consumers while offering loan products that are fair and competitive.
Tribe Payday Loan Business-Part 2:
From: Miami Tribe of Oklahoma
P.O.Box 1326-Miami, Oklahoma 74655
To: Mr. Armen Keteyian, Chief Investigative Correspondent
Ms. Laura Strickler, Producer
CBS News Investigative Unit
524 W. 57th Street, New York, New York 10019-2985
Dear Mr. Keteyian and Ms. Strickler:
I am writing to request the opportunity to comment on the correspondence you directed to Scott Tucker. Mr. Tucker is an employee of MG Services, Inc. (“AMG”), a tribal corporation chartered pursuant to the laws of, and wholly owned by, the Miami Tribe of Oklahoma. Scott has been a close friend of the Miami Tribe for quite some time.
To protect the Miami Tribe’s proprietary business interests, which, as you know, are the subject of civil litigation, Mr. Tucker is bound by a confidentiality agreement and may not speak about the Miami Tribe’s online lending business. As a result, I am writing to you today to help you and your viewers better understand the context of how this 100% tribally owned and operated business plays a pivotal role in advancing the economic development and needs of our sovereign nation and its people.
Despite being expressly recognized by the Federal government as a sovereign, like many American Indian tribes, the Miami Tribe of Oklahoma was forcibly removed from its ancestral homeland and ultimately relocated to a remote and desolate area inside of Indian Territory—one that also happens to be in the center of one of the nation’s largest unmitigated environmental disasters.
This territorial isolation, combined with the fact that we have historically never had access to traditional forms of capital, has for far too long stifled development and investment in Indian country—almost ensuring tribal economic development can never provide a sustainable tax base from which we can provide basic governmental services for our people. Not surprisingly, in the face of these many obstacles, the Miami Tribe has struggled for decades to fulfill its duty to develop businesses and industries as part of a diverse economy that can provide jobs, housing, education, infrastructure, health care, and other vital services for our members.
Accordingly, and like many proud and successful American Indian tribes, the Miami Tribe has always had to be resourceful and innovative in our pursuit of economic endeavors in order to survive. The advent of e-commerce in the early 2000s provided American Indian tribes with the perfect opportunity to develop creative and new economic enterprises that were not constrained by the remoteness of our reservations. As one of many industries developed by American Indian tribes, online tribal lending is a legal enterprise that, I am very proud to say, provides one of several pathways to a brighter economic future for the almost 3,500 members of our tribe.
As you may not be aware, as a Federally recognized American Indian Tribe, the Miami Tribe has the sovereign right to promulgate laws governing all activities within the Tribe’s jurisdiction, including the activities of persons who do business with the Tribe and its subdivisions. This sovereign right is no different than South Dakota passing favorable laws in order to attract Citigroup and the like to set up niche industries within its jurisdiction.
Just like all of the credit card companies in South Dakota that are subject to the laws of South Dakota, the online tribal lending activities of the Miami Tribe’s wholly-owned lender, Miami Nation Enterprises (“MNE”), and our wholly owned shared services provider company, AMG, are strictly regulated by the laws of the Miami Tribe, as well as the laws the United States. And just like other providers of ?nancial products, the Miami Tribe’s online tribal lending business provides a vital service to many Americans who would otherwise be without access to short—term financial assistance. For many of our customers, the alternative to an online loan would be, at best, simply writing a bad check, or, at worst, the prospect of bankruptcy and the loss of their home, or worse yet, pressure toward more desperate and unproductive behaviors.
For several reasons, we believe that online tribal lending, as regulated by sovereign tribal law and subject to federal law, is the safest way for consumers to obtain small personal loans:
We are fully regulated by our sovereign laws;
We are fully compliant with all federal laws;
We offer impartial arbitration for any conflict resolution;
Our uniform rules and regulations are the same across the country, as compared to the conflicting and confusing rules promulgated by the various states, some of which regulate lending, others of which do not; and
We categorically abhor and do not participate in the unethical scams that are now creeping onto the Internet by off-shore criminals, trying to collect on unauthorized or non—existent loans, stealing personal information, and the like. Furthermore, we work closely with state and federal law enforcement agencies in trying to prevent and end these scams.
Any lender will attest that complaints are not out of the ordinary when individuals fail to honor their financial obligations. In our case, we have a strict policy that all complaints are handled appropriately and without any harassment. We recognize that consumers have many options for obtaining personal loans, and we compete for their business by upholding high standards in service, processing, performance, and access. Our successful performance in a competitive market proves that customers value our service and the level of customer service we provide.
As you might expect, the Miami Tribe’s online lending business handles confidential financial information for a significant number of Americans. These individuals rightfully expect that their confidential personal financial information will be strictly maintained in a confidential and protected manner. Indeed, to use your words, the Miami Tribe’s online lending business is required by federal law to keep such information “hush hush” and “secretive.” Accordingly, strict rules control our operations and, more often than we’d like, these rigorous rules require termination of employees who don’t uphold our standards. I can assure you both, however, that no one has ever been fired for asking questions. We therefore assume that the vague allegations that you say have been raised by former employees were from individuals likely terminated for other reasons, or were perhaps received from those motivated by something far less than the truth.
Ultimately, Mr. Keteyian and Ms. Strickler for centuries, the rights and privileges of American Indian tribes have been attacked and lessened by states and other governmental bureaucracies and their paternalistic attitudes, who, while always assuring us they were acting in our best interests, forcibly removed us to isolated, desolate–—and once again, in our instance, environmentally contaminated—regions of the country. And yet, to the extent our lands in Indian country have value, they cannot be collateralized to finance profitable business operations because the federal government holds legal title to such lands in trust.
Because of these and other paternalistic restrictions, we have pro-actively determined that our most productive course is to reject the attitudes driving such restrictions and independently and fully develop our own tribal economy as a sovereign nation. It is undeniable that Congress has expressly and repeatedly urged this path of tribal economic development, and through tribal online lending, we are proudly fulfilling the federal policies encouraging tribal self-determination and self-sufficiency. In short, legal and regulated online tribal lending is one part of a diversified tribal economy that we are developing and operating to sustain and advance our sovereignty.
I sincerely hope you will consider the perspectives I’ve raised in this letter and I invite you to more deeply explore the motivation, drive, skills, and potential of the many sovereign American Indian tribes who to this day continue their struggle to overcome barriers and prejudice that have been an obstacle for centuries—a reality that many Americans incorrectly assume is merely a relic of 18th Century history. If you are willing to consider more information and a deeper and a more accurate understanding of the Very-real, current-day issues that impact Native American tribes, we stand ready to assist you in doing so in any way that we can.
In the meantime, we extend our thanks to you both for your consideration of a more balanced perspective. We appreciate your efforts to insure a thoughtful story on this complex issue.
Very sincerely yours,
Thomas E. Gamble, Chief,
Miami Tribe of Oklahoma
Since 1997, Trihouse Consulting has been offering consulting, lending, introductions, media reponse (WSJ, Bloomberg, NYT…) and vendor marketing support to anyone having an interest in the AFS (Alternative Financial Services) industry. Trihouse has sold over 4000+ “Payday Loan Bibles” followed closely by its “Auto Title Loan Business Startup.”
Questions or comments? Jer@TrihouseConsulting.com 702-208-6736