In the continuing battle between various regulators, native american indian tribes and payday loan lenders, we revisit the continuing saga of Martin “Butch” Webb, a member of the Cheyenne River Tribe. You may recall from previous Posts, Mr. Webb is accused of illegal lending and collection practices and dodging state limits on interest rates.
Mr. Webb is a legitimate member of the Cheyenne River Tribe and employs roughly 100 people. Webb’s payday loan lending activities are the only significant employer on the Cheyenne River reservation.
State and federal regulators question whether Mr. Webb’s Internet lending enterprises are truly tribal owned and operated for the benefit of the tribe or are they simply a ruse to circumvent state and federal laws. Additionally, Webb’s lending facilities are accused of violating federal fair credit and collection practices.
No one denies Webb is an enrolled member of the tribe. The challenge by the regulators is that Webb’s businesses aren’t affiliated with the tribe. Webb argues that because his businesses are on the Cheyenne River reservation, they operate under the umbrella of sovereign immunity.
Opinions on this matter differ widely. Reporter Johnathan Ellis at ArgusLeader.com quotes University of New Mexico School of Law professor Nathalie Martin, “If the lender is literally set up as a tribal corporation and it is the tribe itself, that’s what is entitled to sovereign immunity, not the person.” Of course, Webb and his attorneys with Katten Muchin Rosenman dispute this.
Read the USAToday.com piece in full here. Additionally, refer to Consultants4Tribes.comfor in depth commentary on this issue. Tribal lending and sovereign immunity lending models, much like online gaming, are tremendous opportunities for tribes to prosper. It’s only the beginning. Jer – Trihouse