The new cash cow for Indian tribes is predatory lending. Some do it - some don't; in a sense, I don't know why any tribe would want to this kind of loan sharking business. For some, they say it's a "win-win" situation.
This practice of preying on people who are desperately in need of money has been shifted onto Internet sites by "tribes" with tribal immunity status.
For the past several years tribes have been approached by non-Indians to do business in the lending industry. These same non-Indian lending institutions have faced different regulatory actions by states, which either put a cap on their high interest rates or, in some cases, have banned these lenders from doing business. These lenders have approached tribes to continue their predatory lending practices.
A recent court ruling in Colorado was praised by a group called the Native American Lending Alliance. This group which was formed last year consist of several tribes who are in business of performing high interest loans to people over the Internet. The ruling in "Cash Advance v. State of Colorado" was based on predatory lending by a tribe with tribal immunity. These same tribes who are the new on-line payday lenders will continue to conduct business as usual with the help from non-Indian lenders.
Here at the Turtle Mountain reservation, our leaders have been discreet. It wasn't until our chairman released a statement recently about the Colorado court hearing did some of our tribal people know we were going to conduct business in the area of high interest lending. Our chairman, Merle St. Claire is also a co-chair of the Native American Lending Alliance.
Last year I published a story in our tribal newspaper which referred to our tribal leaders proposing to start up a payday loan program on the reservation. At the time, a resolution was put in place to support the new endeavor. The resolution was not supported by the full tribal council, as two members voted against the proposed business venture.
For years, tribal leaders have confronted congressional leaders in Washington about the victimization tribal nations have endured over the past few centuries. I'm sure tribal leaders today who are allowing predatory lending are doing the same complaining. In a sense, this is hypocritical behavior. Why criticize the government when your doing the same thing?
In a published story late last year about predatory lending, the Chippewa Cree Tribe of Montana has said its annualized interest rate on loans is 360 percent. Payments are made over a period of months and are usually done in monthly or biweekly installments. In the same report it states a first time borrower who borrows $600.00 ends up paying $1,261.32 in 12 biweekly payments.
Not much can be done about the high rates being charged by tribal lending institutions because of sovereign immunity. Tribes can regulate and make their own laws because of this status. The non-Indian lenders know this. This is why they are partnering up with tribes and continue to conduct predatory lending practices.
Delvin Cree is a writer and columnist for The Tribal Independent, an alternative online news source for the Turtle Mountain Band of Chippewa. Cree also is also a contributor to the tribal newspaper, The Turtle Mountain Times.
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