Otoe-Missouria Indian Tribe
Native Americans are taking a stand on behalf of tribal lenders amid an attack by special interest organizations trying to push these local businesses that serve an often overlooked community into bankruptcy. A Native American advocacy group says opponents of tribal loans are promoting a “false and often racist narrative.”
For years, the National Consumer Law Center (NCLC), a self-proclaimed watchdog organization without legal authority, has waged a public relations war against tribal lenders, accusing them of engaging in “payday loans” contrary to the law. ethical and demanding that they operate. according to non-tribal rules.
“None of my tribes engage in payday loans,” says Robert Rosette, a lawyer who exclusively represents Indian tribes. “They are always upset by this kind of negative connotation.”
And it seems the courts are on their side.
The state of Connecticut tried to fine the president of the Otoe-Missouria tribe, John R. Shotton, and their tribal lenders for violating state rules on short loan interest rates term. The NCLC supported the effort. They failed.
“We took this to the Connecticut Supreme Court where we won,” says Rosette. “We also had an important victory two years ago in the 4th Circuit, so we now have two important wins in federal courts and the Connecticut Supreme Court.”
According to Rosette, it is a question of sovereignty. So, for example, there are federal laws, state laws, and tribal laws. The laws that tribal lenders follow are federal laws. This is because of the supremacy clause, which means that federal law takes precedence over other laws.
“If you look at every federal loan law, every tribal loan law, and every tribal loan code, the tribes are complying with all of those applicable federal and tribal loan laws,” says Rosette. “It’s not that tribes don’t follow state law, it’s that those laws don’t apply to tribes.”
Meanwhile, the NCLC is lobbying against these rulings, using its widely read online digital library to promote legal theories contrary to these recent rulings. Their the site is full of references to “bogus tribal loans”; and to legally dubious claims that tribal sovereign immunity is at issue in these cases.
The Native American Financial Services Association (NAFSA) attributes this to a lack of education on these issues.
“We are keenly aware of the lack of education that exists in much of America regarding tribal financial services,” the Native American Financial Services Association (NAFSA) in a press release. “As such, we continue to work to better educate the public, consumer groups, politicians and lawmakers to counter the bogus and often racist narrative and stigma that unfairly plagues tribal financial services and fintechs.
“Above all, NAFSA remains steadfast in its advocacy for tribes and their inherent rights as sovereign nations to determine what is best for themselves and for future generations of indigenous peoples,” said they stated.
Fintech refers to computer programs and other technologies used to support or activate banking and financial services.
Tribal lenders offer short term installment loans with higher interest rates which reflect higher risk, but they are not tied to a person’s salary.
“It’s an entirely different company that we don’t agree with and my clients ban this type of activity,” says Rosette. “These are installment loans with amortization periods, and borrowers have the right and the ability to prepay them much like a credit card, and I think most of our customers pay them off within a period of time. one to three months, so, I just want to make it clear that none of my tribal clients engage in payday loans. “
Rosette says it is “demoralizing for tribes to be beaten up by the mainstream media.”
“No one takes the time to examine how hard the tribes work in these businesses, how well they treat their customers, and most importantly, what the tribes do with the income they make from these businesses,” explains Rosette. “Tribes use this much needed income to provide essential government services to their constituents, like buying dialysis machines to treat diabetes or buying police cars or maybe using some of the money to send. their kids at university.
“It’s very disheartening and demoralizing, but the tribes are determined to continue to operate these businesses, to offer better products and to continue to be a market leader in the financial services arena,” said Rosette.