Tag: indian tribe loans


Tribe Payday Loan Business – CNBC Report Wrongheaded

'day in the life: lunch money' photo (c) 2004, marya - license: http://creativecommons.org/licenses/by/2.0/“A little known loophole is letting some payday loan companies dodge state laws and charge interest rates much higher than the states would otherwise allow, a CNBC investigation has found.”

Your CNBC team must have been under a rock the past 10+ years. Payday loans have been offered via the tribe “sovereign nation model” for at least that long.

Much like the gaming industry, the payday loan tribe model has evolved into a highly sophisticated, profitable business enterprise. The “rent-a-tribe” characterization is a thing of the past.

Regarding usury rates, if the so-called consumer activists bothered to familiarize themselves with a payday loan product that 14,000,000 Americans elected to “use” last year, they would immediately recognize that payday loan companies do a much better job regarding fully disclosing all rates and fees than banks and credit unions do. Wells Fargo charges $10 per $100 loaned and debits their PDL customer the moment their customer’s paycheck is electronically deposited in their WF checking account; zero disclosure of a 400% APR and ZERO risk!

Here’s a link to the full CNBC article, “How Some Payday Lenders Charge”


Payday Loan Tribe-Sovereign Nation Model by Marc Benjamin at The Fresno Bee

Marc Benjamin at The Fresno Bee wrote a very informative piece on the payday loan tribe-sovereign nation model at:

The payday loan industry generates $52 billion worldwide each year, and Chukchansi officials hope to get a piece of it. They’re not alone; about three dozen tribes are in the business across the United States, said Allen Parker, a California consultant who works with tribes nationwide.

It’s an ideal business opportunity for tribes in locations too remote to operate a casino successfully, or for tribes whose casino revenues are down.

Although a tribe may need to hire a consultant or management group that takes a cut of profits and ensures the business is run properly, the overall costs can be lower because the tribe doesn’t have to follow state rules, said Jer Ayler, a Newport Beach consultant who runs payday loan storefront businesses and helps tribes with online loan businesses.

That angers regular payday lenders who have to comply with state laws and limits, he said.

“You’d be mad if you spent millions of dollars on compliance and regulatory issues compared with a tribe that can enter with very little capital and utilize the sovereign model to exempt themselves from state licensing regulations and usury laws,” Ayler said.

But a Los Angeles County Superior Court judge said tribes are not subject to California licensing rules because of sovereign immunity, said Mark Leyes, a Corporations Department spokesman.

Sovereign immunity may also provide protection in federal court.

Three tribes and their loan business partners were sued in April by the Federal Trade Commission after more than 7,500 consumer complaints over the last five years.

In the federal case, tribes are accused of overcharging for loans and illegally filing lawsuits against customers. In one case, a company forced consumers who owed them money to travel to South Dakota and face a tribal court that did not have jurisdiction over their cases.

Other contentions made in the federal case: employers were falsely told by tribal companies that they had legal court orders to garnish wages, and tribal companies disclosed an employee’s debt information to employers and coworkers.

The federal case detailed where a loan company charged interest rates and fees totaling $1,925 to pay off a $500 loan.

“We are concerned that the loan documents and website representations are truthful and complete,” said Nikhil Singhvi, a lawyer for the Federal Trade Commission in Washington, D.C.

But the tribes’ lawyer, John Nyhan, who represented two of the same tribes in the recent California case, said he expects the federal government’s case to be dismissed in the tribes’ favor because of sovereign immunity.

Meanwhile, the Native American Financial Services Association is aiming to reduce those types of suits by setting ethical guidelines for tribes to follow when dealing with customers.

Read more here: http://www.fresnobee.com/2012/07/10/2905151_p2/payday-loans-the-latest-venture.html#storylink=cpy


CFSA, Clarity & Indian Tribe Police TV Show – Daily Life on a Reservation to Air

We returned LATE last night from the CFSA Payday Loan Convention in The Bahamas so I’ll need some time  – and several Posts – to digest all the workshops, breakout sessions,  regulatory developments, rumors, tech solutions, strategies and MUCH, MUCH MORE… If you were not there and you make  or plan to make money in the micro-lending space, you should have been there! ( If you were at The Atlantis and you somehow managed to miss the Clarity Shindig put on by Tim, Dave, Paul and their Team, “Oh Man, Woe is You!”  Friends, music, some GREAT DANCING, and food simply out of this world! I suspect a few biz deals as well!)

Meanwhile, this new TV Show caught my eye on the flight back to LAX. I wonder if the Navajo Police will eventually be asked to stop a State AG from attempting to subpoena tribe payday loan records? So far, 7 episodes are scheduled. Guaranteed, we’ll get an opportunity to witness the economic challenges most of the tribes face today and why partnering with gaming, energy, agriculture and yes, even micro-lender expertise, makes a lot of sense for them.

“FARMINGTON, N.M.—A new television show that follows Navajo Nation police officers as they patrol the reservation’s 17 million-plus acres is set to hit the airwaves. “Navajo Cops” premieres Monday evening on the National Geographic Channel and features some of the tribal department’s 330 men and women on patrol.”

Got an idea? Need help? State licensing? Tribe model? Offshore? Improve your PDL operation? Expand? Start?
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