Gabe Galanda: Internet lending industry erodes tribal sovereignty

A review of recent federal judicial decisions against tribal online lenders shows that they are losing the war–resoundingly.

Arguments under Tuscarora that federal consumer protection laws of general applicability, have fallen flat. Arguments that these tribal enterprises are immune from federal enforcement action (see U.S. v. James), have not surprisingly fared even worse. Tribal sovereignty is being eroded in the process of each federal court controversy.

The tribal online lending industry needs a legal attitude adjustment. Or is it only a matter of time before the industry meets its demise. Instead of throwing traditional federal Indian legal arguments against the walls of federal courthouses, in hope that they stick–they haven’t yet–the industry needs to heed lessons learned by other tribes when over-zealous federal agencies like the IRS, FBI or ATF come barreling onto an Indian reservation or into a tribal economy.