Tribe Payday Loan Lenders: Listen Up

The payday loan industry has been partnering with tribes for a few years. Some of these “partnerships” do not pass muster. But, much like the gaming and energy industries have successfully entered into financially beneficial business enterprises with federally recognized tribes, so can payday loan lenders. Both the tribe and the lender must employ experienced counsel to navigate the challenges.

“Rent-a-tribe” and “sham agreements” are really not necessary to put these deals in place. Our Federal Government specifically supports sovereign tribal nations in their efforts to share in the American dream. However, these enterprises must be created properly with all sides aware of the requirements to create a fair and equitable business, employ full disclosure and solve a need in the market place.

When a break down occurs, you get the following result…

Los Coyotes win case against Eagle Rock Training Center – Military contractor must get its stuff off tribal land by June

A San Diego County Indian tribe has emerged victorious in its legal battle to boot ERTC, a military contractor from its land.

Beginning in 2011, Los Coyotes Band of Cahuilla and Cupeno Indians has been trying to evict Eagle Rock Training Center (ERTC), a combat training facility. The tribe alleged that a 25-year lease agreement with ERTC signed in 2010 by then-tribal spokesperson Francine Kupsch, which also included a waiver of the tribe’s sovereign immunity, was void because it had not been reviewed by the Bureau of Indian Affairs; nor had it been ratified by the tribe’s General Council.

When the tribe attempted to evict ERTC last year, the company refused. Facing physical expulsion from the land by tribal police, ERTC took the tribe to federal court.

Los Coyotes took its case to Intertribal Court of Southern California, which heard arguments in December. Tribal Chief Judge Anthony Brandenburg issued his ruling on Feb. 1, siding with the tribe and rendering the lease invalid.

Chief Brandenburg noted that the contract did not include the official tribal stamp; nor could ERTC provide evidence that the General Council had voted on the lease. ERTC’s attorneys argued that it believed Kupsch could make decisions on behalf of the tribe, a position the judge disagreed with; particularly regarding the issue of waiving tribal sovereign immunity.

“Allowing a single person to do so is unheard of in Indian Country and is contrary to the sacred principle,” the judge wrote.

The judge did not award damages to either party since the tribe had received some compensation from ERTC’s activities. However, the judge made it clear he believes ERTC exploited the tribe’s naivete:

“The bargaining positions of the parties completely favored ERTC. Los Coyotes economically is a poor tribe. Couple with their remote location, high rate of unemployment and lack of economic standing in the Tribal world they are clearly in need. As presented at Tribal meetings and by way of testimony at trial ERTC’s promises to the tribe were almost [too] good to be true, at times grandiose. There is no doubt in the court’s mind that during negotiations ERTC had the upper hand. Promises of Hollywood productions, exposure on the Discovery Channel, million dollar greenhouses, military exercises, a new tribal hall, a children’s park, automobiles and more were made. It is understandable why lacking the same bargaining position, legal and business acumen Ms. Francine Kupsch did what she did. However her good intentions do not compensate for her actions.”

Payday loan partnerships with tribes are being done PROPERLY every month! Pay a few bucks and get this right!

See San Diego City Beat article by Dave Maass for the entire piece.

Jer – Trihouse Consulting 702-208-6736

Comments ( 6 )
  • Payday Loan Industry says:

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  • Payday Loan Tribe Lawsuit -Tucker "Rent-a-Tribe" Update | PaydayLoanIndustryBlog says:

    […] (typeof(addthis_share) == "undefined"){ addthis_share = [];} Payday loan tribe model: wrong move? Robinson v. Tucker — RICO Class Action against Miami Tribe/Santee Sioux Payday […]

  • Stanley says:

    The only way to do business with a tribe is to have them do a limited waiver of sovereign immunity as it relates to the business partnership at hand. If the business partner does not have the tribe agree to a waiver, the business partner would have no legal recourse against the tribe if the deal doesn’t work out.

  • Frank says:

    OK How does the ERTC incident have to do with pay day loans? I can’t see a payday loan company doing something so stupid as to try and remove the tribes sovereignty in a deal. Only the government is arrogant enough to try that.

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