Opinion: Connecticut takes wrong approach with tribal lenders

An image from the Native Kids First campaign that targets the state of Connecticut.

Writer questoins the state of Connecticut for going after the online lending operation of the Otoe-Missouria Tribe of Oklahoma:
The Otoe-Missouria Tribe operates two consumer lending businesses, Great Plains Lending and Clear Creek Lending, from its sovereign land in Oklahoma. These firms provide short-term consumer loans to residents of Connecticut, at rates that are standard for such transactions and reflect the risks involved in making unsecured short-term loans, but which exceed the state’s usury rate of 12%.

Only credit unions, pawnbrokers, and banks can exceed that rate. So it seems odd that while one can pawn their gold watch at a rate exceeding 12%, just getting a straight cash loan from a lender – possibly the same lender who makes a pawn deal – isn’t permitted.

Connecticut has decided that it simply doesn’t like this form of consumer lending. Yet, rather than work with Indian Country to craft legislation that provides a usury exemption for this form of specialty lending, and provide consumers with access to credit that is permitted in more than thirty other states, it sought to sanction the tribe for asserting its sovereign rights.

However, Connecticut realized it would have a very hard time doing so through the courts. While payday lending is technically illegal in Connecticut, Federally-recognized Native American tribes and their elected representatives are immune from Connecticut process and suit.

“The tribe is a co-sovereign with the State of Connecticut and has tribal immunity,” according to Hilary B. Miller, a Greenwich-based and nationally-recognized consumer lending and tribal law attorney.

Get the Story:
Michael Hausam: Connecticut Should Leave Tribes and Consumers Alone When It Comes to Credit (Town Hall 4/30)

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