indianz.com your internet resource indianz.com on facebook indianz.com on twitter indianz.com on Google+
ph: 202 630 8439
Kill The Tobacco Master Settlement Agreement
Advertise on Indianz.Com
Home > News > Headlines
Print   Subscribe
Heather Dawn Thompson: Tribes being put out of business again

Filed Under: Opinion
More on: economic development, heather dawn thompson, internet, nafsa, native sun news
   

The following is the opinion of Heather Dawn Thompson. All content © Native Sun News.


Heather Dawn Thompson. Photo from Greenberg Traurig

Operation chokepoint: destroying online lending
By Heather Dawn Thompson

WASHINGTON — Each time Tribes finally find a way to “pull themselves up by their bootstraps,” state and federal governments try to destroy their new businesses.

It happened with gaming, tobacco, and gas sales. So maybe it is not surprising that it is now happening with a new Tribal business, online lending. What is surprising to many, however, is that it is President Obama’s Administration that is trying to kill these legal Tribal businesses.

Many tribes have turned to internet businesses for income, because they are too isolated and remote and lack more traditional revenue, such as a tax base. One of the most successful tribal internet businesses is lending money, or “online lending.” According to Barry Brandon, the Executive Director of the Native American Financial Services Association (NAFSA), there are probably about two dozen tribes running successful online lending businesses.

These online businesses have been an economic miracle for many isolated and impoverished Tribes. According to President Mark Azure of the Ft. Belknap Indian Community in Montana, income from their online lending businesses now makes up about 20% of their Tribal governmental revenue, and provides approximately $1.2 million in payroll to Tribal employees; revenue and paychecks that the federal government is not providing. In addition, they are using the profits to invest in their community. They started the Smokehouse Grille Restaurant, a construction company, IT company and will be opening a grocery co-op this summer in an area of the Ft. Belknap Reservation that is a food desert.

Most Tribal online lenders provide short-term, small-dollar installment loans (typically around $300) for a short period of time (4-6 weeks is a common repayment period) at higher interest rates. There is a great demand for these loans because of the large number of people who do not have credit cards or who cannot get loans from regular banks.

The Obama Administration is trying to shut these Tribal businesses down. At the heart of it, some uniformed federal officials lump good, legal, hard-working Tribal businesses in with bad actors and they fail to understand Tribal sovereignty. They also appear to think that lower income people are too ignorant to make their own decisions about loans. And apparently, if they cannot get one from a bank, they should not be able to get one at all.

At the Online Lenders Alliance conference in Washington, DC on May 2, a lawyer for the FTC, Nikhil Singhvi, said doing business with a Tribal online lender was tantamount to subverting the law, and said that non-Indians only support Tribal businesses or provide services to Tribes to “escape law enforcement scrutiny.” The Tribal attendees at the conference were outraged and demanded Singhvi’s apology. He refused.

You may ask, what is so interesting about the government trying to stop people from “subverting the law”? The answer: Tribes are not breaking any laws. Nor are business that work with Tribes breaking any laws.

There are no federal laws prohibiting Tribal online lending. There are some states that prohibit or limit it, but state laws do not apply to Tribes or Tribal government-owned businesses.

Congress has the power to regulate online lending, for both states and Tribes. But, Congress has chosen to leave most of these decisions to states and Tribes. Each individual state and Tribe decides if you can lend online there, and if so how much and what interest rate you can charge.

Some states allow online lending, some do not. Some Tribes allow online lending, some do not. Some states put heavy restrictions on interest rates, some do not. Some Tribes put heavy restrictions on interest rates, some do not. The states that have placed heavy restrictions on online lending are mad at the Tribes who have not.

The Obama administration has decided to try and help these states force their state laws on Tribes despite the fact that the federal government is the trustee for Tribes.

There are at least four different Obama Administration agencies aggressively working to shut down these tribal businesses: the Federal Trade Commission (FTC), the Consumer Financial Protection Bureau (CFPB), the Federal Deposit Insurance Corporation (FDIC), and the Department of Justice (DOJ).

The Obama Administration calls these efforts “Operation Chokepoint.”

President Obama’s “Operation Chokepoint” works like this: The Tribes are not violating any laws, so the federal government cannot go after them. So, these federal agencies bully banks into not doing business with the Tribes or their business partners. The federal agencies meet with the banks and tell them they will investigate the bank for having a “risky” business and for potential “fraud.” The banks get scared. The banks close the Tribe’s online lending bank account. Without a bank account, the Tribe cannot run its business.

Even more disturbing, the banks are now so intimidated by the Obama Administration’s efforts that they are shutting down all Tribal bank accounts. One Tribal entity in the Dakotas had two banks shut down their online lending accounts, sending the business into a crisis. At the same time, one of the banks decided to just shut down all of their Tribal bank accounts, including one that was for tribal tourism and one for tribal arts and crafts. The Tribal entity asked that their name be withheld for fear of additional targeting by Obama’s “Operation Chokepoint.”

Tribes have reached out in desperation to Congress to protect themselves from “Operation Chokepoint.”

At a closed door meeting on April 30, 2014 with the Senate Democratic Steering Committee, several tribal leaders asked Senate Majority Leader Harry Reid (D-NV), and Senator Jon Tester (D-MT), Chairman of the Senate Committee on Indian Affairs, to hold a congressional hearing on the destruction “Operation Chokepoint” is causing in Indian Country.

As of the date of this publication, no hearing has been scheduled.

Indian activists rightly focus on the Keystone XL pipeline and the “Redskins” mascot. But the economic oppression of Operation Chokepoint is just as destructive to Indian Country. If Tribes cannot make their own money by running their own businesses, they will be forced to continue to be dependent on the federal government. Perhaps the next Indian Country t-shirt should read “No Operation Chokepoint!”

Heather Dawn Thompson is a professor at the United Tribes Technical College and an Indian law attorney with Greenberg Traurig. GT represents a number of Tribes expanding their economies with online lending.

Copyright permission Native Sun News


Copyright © Indianz.Com
More headlines...
Stay Connected:

Local Links:
Federal Register | Indian Gaming | Jobs & Notices | In The Hoop | Message Board
Latest News:
Native Sun News: Businesses show support for LNI tournament (3/27)
Lakota Country Times: Oglala Sioux fighter climbing in the ranks (3/27)
Mark Trahant: Alaska Natives look 10,000 years into the future (3/27)
Ivan Star: The influences of boarding school and Vietnam War (3/27)
Gyasi Ross: Funerals become family reunions in Indian Country (3/27)
Tim Giago hands over the reins as publisher of Native Sun News (3/27)
House committee passes Native American Children's Safety Act (3/27)
Bill to benefit Miami Nation moves forward in House and Senate (3/27)
City extended contract to send treated sewage to sacred peaks (3/27)
Oneida Nation welcomes ruling backing land-into-trust request (3/27)
Lawmakers want BIA to delay new federal recognition reforms (3/27)
Another conviction from Chippewa Cree Tribe corruption probe (3/27)
Editorial: Shakopee Tribe contributes $5M for health initiative (3/27)
Opinion: Navajo Nation enacts 'sin tax' on unhealthy products (3/27)
Editorial: Opposition to Pamunkey Tribe recognition 'revolting' (3/27)
Dennis Jenkins: Hypocrisy for new tribal casinos in Connecticut (3/27)
Supreme Court asked to hear Kialegee Tribal Town gaming case (3/27)
Ho-Chunk Nation extends agreement for off-reservation casino (3/27)
Indiana lawmakers seek role in Pokagon Band gaming compact (3/27)
Native Sun News: Oglala Sioux leader not pleased with boycott (3/26)
Lakota Country Times: Lakota Nation Invitational stays in Rapid (3/26)
Native Sun News: Mayor of Rapid City addresses race relations (3/26)
Jane Daugherty: Tribal e-commerce continues to draw scrutiny (3/26)
Witness list for Senate Indian Affairs Committee's field hearing (3/26)
Richard Iron Cloud: Remove murderer's name from sacred peak (3/26)
Native Youth: Bring dental therapy providers to Indian Country (3/26)
Steven Newcomb: Tribal nations still under dominating process (3/26)
Law firm hosts tribes for session on marijuana in Indian Country (3/26)
Judge upholds BIA decision on Oneida Nation land-into-trust bid (3/26)
Appeals court rules against Crow Tribe in housing grant dispute (3/26)
Ho-Chunk Nation raises minimum wage to $2.75 above federal (3/26)
Mishewal Wappo Tribe to appeal decision in recognition lawsuit (3/26)
Racist emails of former Montana federal judge to be preserved (3/26)
Shingle Springs Band considered but rejected indoor gun range (3/26)
House panel backs bill to block Tohono O'odham Nation casino (3/26)
Quapaw Tribe did not include casino on land-into-trust request (3/26)
Chumash Tribe never got apology for diplomat's casino remark (3/26)
Governor won't sign casino compact with Fort Sill Apache Tribe (3/26)
Cherokee Nation approves $6.9M renovation project for casino (3/26)
Native Sun News: Oglala Sioux veteran training for Paralympics (3/25)
Alaska Native musher Chuck Schaeffer completes 2015 Iditarod (3/25)
LTBB News: Michigan tribes come together for historic meeting (3/25)
Lecture focuses on repatriation of tribal intellectual properties (3/25)
Board still working on delivering money for Cobell scholarships (3/25)
Sen. Barrasso to chair field hearing on drugs in Indian Country (3/25)
Bill for tribal marijuana compacts up for hearing in Washington (3/25)
Choctaw Nation chief hopes to travel to Ireland for monument (3/25)
HHS urged to do more to help tribes with foster care programs (3/25)
Eastern Cherokees work to teach language to new generations (3/25)
Another suggestion for Indian woman on $20 bill -- Sakakawea (3/25)
Man from Crow Tribe cites self-defense in fatal casino shooting (3/25)
Shawnee Tribe sees opposition to off-reservation gaming plan (3/25)
Navajo Nation signs Class III casino compact with New Mexico (3/25)
Quapaw Tribe insists a casino isn't focus of Arkansas land plan (3/25)
Suquamish Tribe reaches deal to allow highway work at casino (3/25)
more headlines...

Home | Arts & Entertainment | Business | Canada | Cobell Lawsuit | Education | Environment | Federal Recognition | Federal Register | Forum | Health | Humor | Indian Gaming | Indian Trust | Jack Abramoff Scandal | Jobs & Notices | Law | National | News | Opinion | Politics | Sports | Technology | World

Indianz.Com Terms of Service | Indianz.Com Privacy Policy
About Indianz.Com | Advertise on Indianz.Com

Indianz.Com is a product of Noble Savage Media, LLC and Ho-Chunk, Inc.