Business | Opinion

Harold Monteau: Tribal lending industry facing major challenges

The office of American Web Loans in Red Rock, Oklahoma, a lending business owned by the Otoe-Missouria Tribe. Photo by Jane Daugherty.

Harold Monteau, a member of the Chippewa Cree Tribe takes a closer look at Consumer Financial Protection Bureau v. Great Plains Lending, an online lending dispute that is pending in the 9th Circuit Court of Appeals, and how a decision might affect tribal sovereignty:
The Consumer Finance Protection Bureau (CFPB), in pursuing the Tribes and their lending entities, is ignoring the real culprits in setting up these Tribal Lending Entity(s) (TLE) business arrangements, the non-Indian companies who rake off as much as 99 percent of the profits.

The CFPB has pursued civil enforcement actions against TLE (Some are organized as corporations and others are “arms of the Tribe” under ordinances or resolutions.). In at least one of these enforcement actions (now pending decision in the 9th Circuit) the CFPB is taking the position that because the Consumer Finance Protection Act (CFPA), part of the Dodd-Frank Act, is a “federal law of general applicability”, it applies to Tribes and Indians even though there is nothing in the CFPA that says that. In fact the CFPA only mentions Tribes in the definition of “State” in the Act and, under the Act, States are recognized as “co-regulators”. The Tribes take the position that, because the Act includes them in the definition of State, they are recognized as co-regulators under the Act and not “persons, corporations or lending entities” that Congress meant to be regulated by the CFPB.

The CFPB, in its zeal to take after Tribal Lenders, is arguing that it even has authority over the States and their lending entities (Student Loan, State Housing Development, State Economic Development entities and any other State Agency that lends money.) They can point to nothing in the act that grants them such wide authority but they are taking the legal position that they have this authority over States and Tribes. The States are not involved in the case and haven’t asked to be part of it. So I guess they’ll live with the results if the 9th Circuit and U.S. Supreme Court give the CFPA the interpretation that CFPB wants. Maybe they feel that anything that limits Tribal commerce that does not have to follow state law or regulations, is a good thing.

In taking this stand the CFPB (an agency of our “Trustee”) is about to set a precedent that will take a very, very large chunk of “Tribal Sovereignty” out of what’s left of it. It won’t be just the Tribal Lending Industry that will have to live with such a decision. Any federal act of general applicability (Labor Laws, OSHA, etc.) will suddenly all apply to Tribes.

Read More:
Harold Monteau: CFPB Is Barking Up the Wrong Tree (Indian Country Today 8/26)

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