Category: Tribes

21
Jul

More Great News for Borrowers: 4th Circuit Finds Lenders Entitled to Tribal Sovereign Immunity

For those of us who champion the rights of consumers and borrowers to have the right to choose financial products that are best for meeting their personal money challenges, the Fourth Circuit of Appeals just came through for them!

Native American Indian Tribes, servicers and vendors are considered to be “arms of the tribe” when properly constructed collaborations are implemented and are entitled to sovereign immunity.

This is a huge win for consumers, lenders, vendors and payment processors!

Per the Press Release by Weider, Brodsky & Kidder PC:

A panel for the U.S. Court of Appeals for the Fourth Circuit recently found that two lending entities affiliated with the Lac Vieux Desert Band of the Lake Superior Chippewa Indians (the Tribe) are entitled to tribal sovereign immunity as “arms of the tribe”.  The panel then ordered the dismissal of an underlying putative class action brought by five Virginia residents who claimed the payday loans they obtained online from the tribe-affiliated lenders violated state usury laws.  The panel’s decision reverses that of the district court, which held that the affiliated lenders failed to sufficiently prove they were “arms of the tribe” and thus were subject to the court’s jurisdiction.

One of the lending entities, Big Picture, was formed by the Tribe in 2014 to consolidate the Tribe’s lending activities, and in 2015, the Tribe formed Ascension as a subsidiary to support its lending activities by providing marketing, technological, and vendor services.  The appellees, Virginia residents, initiated a class action in federal court in 2015 in which they alleged that the payday loans they received from Big Picture came with interest rates fifty times higher than the legal limit in Virginia.  The lending entities moved to dismiss the case for lack of subject matter jurisdiction on the basis of tribal sovereign immunity, but the district court denied their motion, asserting that the appellants’ claim of immunity was unsupported by the evidence they provided.

In reaching its conclusion, the district court applied an “arm-of-the-tribe” analysis, which is used to determine whether tribal immunity may apply when a tribe-created entity engages in commercial activity.  The “arm-of-the-tribe analysis” typically involves consideration of the following factors: “(1) the method of the entities’ creation; (2) their purpose; (3) their… [Read More Below…

4th Circuit Finds Lenders Entitled to Tribal Sovereign Immunity

Want to know more? Grab a copy of our “Bible” or schedule a conference call with our Founder: Jer Ayles

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15
Feb

1st Tribal Lending

1st Tribal Lending

The Section 184 Indian Home Loan Guarantee Program is a home mortgage specifically designed for American Indian and Alaska Native families, Alaska Villages, Tribes, or Tribally Designated Housing Entities. Section 184 loans can be used, both on and off native lands, for new construction, rehabilitation, purchase of an existing home, or refinance.

Because of the unique status of Indian lands being held in Trust, Native American homeownership has historically been an underserved market. Working with an expanding network of private sector and tribal partners, the Section 184 Program endeavors to increase access to capital for Native Americans and provide private funding opportunities for tribal housing agencies with the Section 184 Program.

To help increase Native access to financing, the Office of Loan Guarantee within HUD’s Office of Native American Programs, guarantees the Section 184 home mortgage loans made to Native Borrowers. By… Read More

 

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29
Aug

Rent a Tribe Schemes, Fintech Objections & the Logic Behind Them

Rent a Tribe Payday Loan Companies

[Let us know if you ever have any questions. TrihouseConsulting@gmail.com  Jer]
“Those who oppose the idea of American Indian tribes operating successful businesses that compete with non-tribal rivals sometimes use offensive terms to create the illusion of nefarious conduct. One of the ugliest assertions is that a tribe’s success occurs by “renting” itself to non-tribal members, who abuse it for iniquitous purposes.”

“The term “rent-a-tribe” originated in gaming, where attacks started as soon as tribes became a competitive threat to non-tribal casinos. Opponents suggested that tribes’ practice of hiring capable vendors to provide services related to casino operations was akin to “renting” sovereignty and detracted from the tribal ownership of the business, even though many non-tribal entrepreneurs engage in identical outsourcing practices when starting a new business in a regulated industry.”

The term “rent-a-tribe” grossly misrepresents American Indians, their intellectual abilities, and business acumen.

American Indian tribes are sovereign; they have the inherent authority to govern themselves free from outside interference. Sovereignty is acknowledged by the federal and state governments through treaties, laws, executive orders, and intergovernmental agreements, and confirmed by centuries of U.S. Supreme Court and…

Read More: The Times Herald

Want to learn how to launch a consumer loan business? Internet lending? Store-front lending? Licensing? Need to talk to an expert? Step-by-step procedures for “how to lend money to the masses.” Visit: The Business of Lending to the Masses

For a complete set of tribal lending documents: Tribe Lending Entities 5th item down on this page.

How to Start a Consumer Loan Business: Installment lending, car title loan lending, payday loan lending, personal loan business

Click This Image for Some Light Reading 🙂 Over Your Weekend!

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31
Jan

Scott Tucker Dirty Money Netflix Ep2 Season 1

In October 2017, Scott Tucker was criminally convicted for his billion-dollar payday loan business. On Friday, he was sentenced to 16 years in prison. (Tucker’s attorney, Tim Muir, received 7 years.)

“As a unanimous jury found today, Scott Tucker and Timothy Muir targeted and exploited millions of struggling, everyday Americans by charging them illegally high interest rates on payday loans, as much as 700 percent,” Joon H. Kim, acting Manhattan U.S. Attorney, said in a statement. “Tucker and Muir sought to get away with their crimes by claiming that this $2 billion payday loan business was actually owned and operated by Native American tribes. Scott and his lawyer attempted to portray their Kansas City based AMG services as Native American owned; thereby having sovereign immunity. The jury disagreed.

Tribe payday loan business

Scott Tucker Payday Loan Business – Tribe Lenders

A lawyer for Tucker told said Scott  Tucker intends to appeal. Tucker is also appealing the $1.3 billion fine leveled against him last year by the Federal Trade Commission.

Meanwhile, Tucker is off to prison for 16 years!

The fact is, Scott Tucker’s payday loan business had thousands of returning borrowers! Why? Because they preferred Scott’s online payday loan product to the few options they had for borrowing a few hundred bucks without a hassle.

It’s true that Tucker employed MANY “tricks” and disclosure failures during the course of his customer’s online borrowing transaction. Too bad! Lenders don’t really have to do this. A lender can reveal ALL the costs, terms and transaction details BEFORE the potential borrower actually “signs on the dotted line” and still build a multi-million dollar loan portfolio. Many publicly traded and privately held companies are achieving this as I type here.

Tribal ownership? It appears that Scott Tucker and Timothy Muir accomplished this “after the barn doors were opened!” Their handling of this arrangement appears to have resulted in their mortal death. (They should have consulted with an experienced tribal chairman/manager like Allen Parker at Consultants4Tribes.com!)

Regarding the payday loan product offering itself, the media ALWAYS fails to disclose that there is more to the 700% interest rate they ALWAYS refer to than first meets the eye. This is an annualized interest rate required to be disclosed by the lender to a customer by the FED’s. By now, everyone knows that these loans aren’t meant to be rolled over every 2 weeks for years! They are scheduled to be paid off on the borrower’s next payday. You borrow $300 and payback $345. No big deal IF you have zero options and you want  a fast loan!

Scott Tucker screwed up! But of course, that’s easy for the rest of us to conclude having the benefit of hindsight! Tucker was a maverick; blazing new trails. As he says in the Netflix “Dirty Money,” Episode 2 treatise on his business, “There was no road map.”

 

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24
Sep

TLE: Tribe Lending Enterprise – Term Sheets, Tribe Resolution, Pro Forma, Marketer/Servicer Agrrement

Allen Parker: Sovereign Matchmaker for Tribe Lending

Allen Parker: Sovereign Matchmaker for Tribe Lending

Tribe Sovereign Nation Documentation, Term Sheets & More

Do you need documents to form a tribe installment. payday. line-of-credit or car title loan company?

I offer term sheets, tribe loan portfolio pro formas, TLE and Tribe Economic Development word docs… everything a new lender or a “servicer/marketer” requires in order to legally and formally launch a tribe owned online loan business.

Many Native American Indian tribes have have authorized consumer financial services businesses as legitimate conduits for generating tribe revenue and develop Tribe’s economy to improve the Tribe’s economic self-sufficiency, to enable the Tribe to better serve the social, economic, educational, and health and safety needs of its members and visitors, and to provide its members with opportunities to improve their own economic circumstances.

In an effort to protect consumers, borrowers and their constituents, all Tribal Financial Service providers are required to be licensed as a Tribal business and by the Tribal Financial Services Regulatory Authority (“TFSRA”), and to adhere to the Tribal Financial Services Regulatory Code, as well as all applicable federal and Tribal laws and regulations.

Tribally Owned and Operated Financial Service Businesses

The Native American Financial Services Association (NAFSA), an advocacy association advocating for responsible payday, installment, title loan and line-of-credit loan products, notes that “tribal online lending provides a critical economic lifeline for sovereign tribes in remote areas.” Revenue and profits generated by tribe payday and installment lending arms is used to fund tribal infrastructure as well as cultural, youth, employment and health care programs.

Investment: $7500.00

Note: All Word Templates are editable for your private use.

  1. Template-Standard Tribe Resolution Creating a Tribally Owned Business
    1. A RESOLUTION OF THE GENERAL COUNCIL OF THE (name of tribe) CREATING AND ESTABLISHING THE TRIBALLY-OWNED BUSINESS (NAME) PURSUANT TO (vesting power in General Council resolution) [Word Doc.]
  2. 3 year Pay Day Lender Loan Volume Projections
    1. (PDF Doc.)
  3. “THE RISKS AND BENEFITS OF TRIBAL PAYDAY LENDING TO TRIBAL SOVEREIGN IMMUNITY”

INTRODUCTION: [25 page PDF by Bree R. Black Horse J.D. candidate at Seattle University School of Law, and an enrolled member of the Seminole Nation of Oklahoma in cooperation with The American Indian Law Journal. Public Domain]

  1. Two Key Tribal Court Cases:
    1. While there have been many, many cases upholding tribal sovereign immunity over the years, two in particular are specific to tribally owned payday loan businesses. [4 page PDF]
  2. 3 Year Proforma.
    1. A 3 year tribe pro forma portfolio [Excel format]
  3. Boilerplate Marketing & Servicing Agreement
    1. Template for TLA & Marketer/Servicer arrangement with Revenue Share Exhibit A. [12 page Word Doc.]
  4. Consulting Agreement
    1. Template Consulting Agreement with Tribe Lending Enterprise [Word Doc]
  5. Resolution
    1. RESOLUTION OF THE GENERAL COUNCIL OF THE (name of tribe) VESTING ECONOMIC & COMERCIAL DEVELOPMENT IN THE GENERAL COUNCIL  [Word Doc]
  6. Car Title Boilerplate Agreement
    1. Example Marketing/Servicing Agreement with TLE [11 page PDF]
  7. Car Title Consulting Agreement
    1. Typical Consultant/TLE agreement specific to car title loan lending [6 page PDF]
  8. Typical Lenders Introduction and Compensation Agreement
    1. Example Tribe/Consultant introduction & revenue share term sheet [5 page PDF]
  9. Example Monthly Payments-Revenue Share Agreement
  10. Typical consultant – TLE revenue share statement [1 page PDF]
  11. Example of Typical Non-Recourse Promissory Note & Security Agreement
    1. Ordinary Borrower/Lender capital security agreement [4 page PDF]
  12. Lawyers’ View: Minimizing Regulatory Enforcement Actions Against TLE and Service Providers
    1. Important Factors in a Tribal Lending Relationship [3 page Word Doc]
  13. Frequently Asked Questions Regarding the Mechanics of TLE-TOB/Marketer-Servicer Collaborations
    1. Allen Parker responses to FAQ’s submitted by potential consultants, tribes, and providers of capital. [2 page Word Doc]
  14. Typical TOB Lenders’ License
    1. [19 page Word Doc] A financial services license authorizing the TOB to do business “THIS IS TO CERTIFY that, consistent with Section 4 of the Mahalo District of the North Dakota Tribe Tribal Financial Services Regulatory Act, the enterprise under the jurisdiction of the Mahalo District of the North Dakota Tribe has been licensed by the Mahalo District of the North Dakota Tribe’s Tribal Financial Services Regulatory Commission to provide financial services in furtherance of the Tribe’s economic self-sufficiency and political self-determination. It is…”
  15. Example Consultant- Lender Representation Agreement Boilerplate
    1. As titled, an example Consultant retainer/representation agreement [2 page Word Doc]
  16. Example Consultant- Lender Representation Agreement Boilerplate
    1. As titled, a template for consultant –services/marketer agreement [1 page PDF]
  17. Example Declaration of Servicer-Marketer Skill Set Submitted to Tribe
    1. As titled, a sample declaration to tribe regarding servicer/marketer skill set [1 page PDF]
  18. Template for Statement of Consultant-Servicer-Marketer Power Point Presentation to Interested Parties
    1. Editable Power Point presentation [12 page PP]
  19. Typical Tribe/Servicer/Marketer Credit Reporting Business Rules
    1. As titled, a phenomenal Excel list of go/no-go CRA implemented business rules [Excel 10 pages]
  20. Template for “Finders’ Fee”
    1. As titled, editable Finders’ Fee for use by Consultants [2 page Word Doc]
  21. Template for “Finders’ Fee”
    1. As titled. A second version of a Finders’ Fee
  22. Example Business Development Agreement
    1. As titled, editable template for business development agreement between TLE & Consultant [5 page Word Doc]
  23. Term Sheet
    1. As titled. [4 page Word Doc]
  24. TLE-Lender-Services/marketer Bank & Loan Flow Chart
    1. As titled, an visual of “how the money flows.” [1 page PDF]
  25. “Tips for Tribe Economic Directors”
    1. As titled, a public domain analysis for tribal economic development principles. [9 page PDF]
  26. Limited Solicitation RFP
    1. A typical Request for proposal submitted by TLE’s [2 page Word Doc]
  27. PDL Sovereign Nation Manual by Allen Parker
    1. An analysis of the TLE Model [8 page PDF]

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