An Indian reservation in the heart of Montana's farm country may seem an unlikely place to borrow a quick $600, but the Chippewa Cree tribe says it has already given out more than 121,000 loans this year at interest rates that can reach a whopping 360 percent.
As more states pass laws to rein in lenders who deal in high-interest, short-term loans, Indian tribes like the Chippewa Cree and their new online lending venture, Plain Green Loans, are stepping in to fill the void. The Internet lets them reach beyond the isolated Rocky Boy's Indian Reservation to borrowers across the nation, while tribal immunity has allowed them to avoid bans and interest-rate caps several states have set.
To Neal Rosette, Plain Green Loans CEO and the Chippewa Cree's former executive administrative officer, it's a win-win. The online lending venture is a resource for people who can't or won't borrow from banks, while it gives the tribe a steady revenue stream and jobs with unemployment on the reservation at nearly 40 percent.
Rosette said this model could be the successor to gambling for tribes looking for an economic boost. Some tribes have owned online lending businesses for several years, and Rosette said the Chippewa Cree and three other tribes have started the Native American Lenders Alliance to encourage more.
"I believe this is the new outlook for Indian Country, not just Rocky Boy," Rosette said. "We are sovereign nations and we have the ability to create our own laws that regulate our businesses such as this."
That's a problem for consumer groups and the states that have tried to bring such lending under control. The issue with these loans, consumer advocates say, is that their high interest rates make it too easy for a borrower to become trapped in a cycle of debt as they have to borrow more to repay their original loans.
Forty-two states and the District of Columbia have taken different regulatory approaches, from outright bans to interest-rate caps. Montana voters last year passed a ballot initiative that capped such loans at a 36 percent annualized interest rate, which has led to a nearly 83 percent drop in so-called deferred deposit lenders, according to Montana banking and financial institutions director Melanie Griggs.
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I wonder if this would work in PL-280 states where certain states (such as California) have been given civil jurisdiction over Indian tribes. Under that authority, state usury laws would presumably kick in; however, I have not done the research. I've blogged about one case from the 9th Circuit, but it's been a long while since I looked at it.
ReplyDeleteI hear trafficking in human organs, prostitution, selling counterfeit and watered down prescription drugs and clubbing baby seals for their pelts is profitable. Tribal sovereignty could be helpful in establishing those businesses too. Additionally these businesses fit right in with the morals of many tribal leaders who could double dip by selling the bodies and body parts of their disenrolled family members.
ReplyDeleteThey better find something fast....the justice department is going to allow all States to have online poker...there is nothing the tribes can do to stop it....it's a profit making taxable win for the States....Obama is sure to pass it...been reading about on the finical blogs.
ReplyDeleteSpeaking of bodies and body parts.
ReplyDeleteSaving cord blood as well as storing blood saving can be life saving among family groups.
Humans are becoming more and ethnically mixed and finding compatible matches can mean the difference between life and death.
delete 'saving' above.
ReplyDeleteThe Alturas Indian Rancheria was approached by loan deal by Frank Chinook, Insight and RLJ Financial LLC here in California. They wanted to start the same deal with us as Rocky Boy is doing. But before our Tribe had another unlikely turn of events the last I heard in November was the banking laws here in California were the hold up. My brother and I felt it might be a scam as everything has been with these investors. LOL
ReplyDeleteCurious said: They better find something fast...the justice dept is going to allow all states to have online poker.....
ReplyDelete"Online Gaming," what a "Concept!" And your right, it will cut into the profits that "Pechanga," and Others, will have to endure. Endure to the extent of more forced "Disenrollments and Banishhments" to take up the slack because of soon to be "Diminishing Profit Margins," and their "Almighty Percap." You have got to know that these "Criminal and Corrupt Tribal Leaders" are working feverishly to combat this new threat. Its all going to be: The end is going to "Justify the Means!" That is their "In-sah-able Quest" for more, and the "Oppressed Native American Indian" will, "Again" suffer at the hands of these "Treasonous Leaches." How many more "Legitimate Indians" will fall by the wayside? You "Hide and Watch" the "Government(Indian Affairs)" stand back and give "Creadibilty" to this new assault by these "Corrupt and Criminal Casino Indians." If "Internet Gaming" passes, and there is a reasonable chance that it will happen: "And There Will Be No One To Stop Them!" The "Government(Indian Affairs)" surely won't "Bite The Hand That Feeds Them." It's all about the "Money" with these "Thieves." Don't anger the "Big Bad Wolves."...A.K.A... "Corrupt and Criminal Tribal (Casino) Indians" because of the "Inflated" power that they perceve to exist. The D.O.J. has the "Ability and the Means" to put a stop to this "Travisty of Justice" that is so firmly embedded within "Indian Country." It is the "Nature Of the Beast." You allow yourselves to be a big "Part Of the Problem," now how about being "Part of the Solution" and for once do you job? Put a stop to these "Criminal Acts" once and for all! You see what is happening, now finally take a stand for the good of all "Native American Indians" in your charge. "Justice, In A World Of Injustice" has happened because of your "Inability" to Act Responsibly" for the good of all "Indians," not just the "Criminals" you always stand behind. It is "Unexcusable!" It gives in to the "Notion" that you are "Paid Off." Prove that "Notion Wrong!" Take action against these "Criminal Enterprises." The "Evidence" is "So" out there to be had. There is no "Excuse For You Not To Act,"..."NONE!"
Considering such ideas is very helpful especially how to make high interest loans. More info on high interest savings account .
ReplyDelete