Oliver Semans: Court upholds tribal immunity in online loan case

Oliver Semans, the executive director of Four Directions, discusses a California court decision that upheld the immunity of tribal-owned Internet lenders:
In a ruling issued on January, 21, 2014 the Court of Appeals rebuffed the state’s claims, finding that the tribes’ lending activities “are subject to tribal laws governing interest rates, loans and cash advance services,” and that California’s lending laws are not enforceable against the tribal lenders. The Court went on to find that “there can be little question” that the tribally owned lenders “function as arms of their respective tribes” and therefore are not subject to California’s jurisdiction.

The court observed that due to the relocation of these tribes to remote and severely depressed regions, revenues from these loans are “essential to maintaining a functioning tribal government able to provide necessary services to the tribe’s members.”

The decision marks the second appellate court ruling in favor of sovereign tribal lenders in less than a month. In December 2013, the Colorado Court of Appeals dismissed the State of Colorado’s appeal of the lower court’s nearly identical finding that sovereign tribal lenders were arms of their respective tribes and are not subject to that state’s jurisdiction. In both the California and Colorado proceedings, the courts affirmed the imposition of monetary sanctions against the respective states for their litigation misconduct committed during the course of the litigation.

Get the Story:
Oliver J. Semans: Court Slaps Down California's Attempt to Control Tribal Lending (Indian Country Today 3/1)

Related Stories:
California court upholds immunity for tribal payday lenders (1/22)

Join the Conversation