Are the PayDay lenders attempting to pull a fast one with the help of the tribes in SD?

A little birdy tipped me off this morning that some of the major players in payday lending industry in South Dakota may have found a new angle to skirting the law and proposed interest rate cap; process the loans on tribal land. I was told that early talks have begun.

So how would it work? As it was explained to me, no matter if you are in Sioux Falls, Yankton or Watertown, when you would apply for one of these loans, the lender would send your application off to a loan processing site on tribal (sovereign) land, I’m assuming it would be legal for them to do it electronically. Since the application is being processed and the loan potentially being approved on tribal land, they would not have to follow the rules of the state. It is similar to First Premier setting up shop in South Dakota because of the lax usury laws here, but marketing their predatory card throughout the nation.

If this is true, it is just another step by the payday lenders to skirt law (that hasn’t even passed yet) and to continue to prey on the poor, with the help of our SD tribes.

 



5 comments ↓

#1 anonymous on 07.20.15 at 1:25 pm

Won’t that be ironic, given the fact that some of the SD counties that make up tribal lands have the highest poverty rates in the entire nation.

Example: Shannon County, a county entirely within the Pine Ridge Indian Reservation, is the poorest county in the U.S.

#2 teatime on 07.20.15 at 5:26 pm

I believe that was already tried once, a few years ago. Western Sky was the company; Problem Solver was the loan product’s name.

It would provide jobs on the reservation(s).

#3 The Daily Spin on 07.20.15 at 6:02 pm

Reservations are not only aside from state government, they’re a sovereign nation. Their own country. Their own laws. It’s why marijuana is legal on tribal land. Native Americans regularly get loans on cars, mobile homes, etc.. Once it’s on the reservation, it can’t be repossesed. Payday lenders will be surprised when principal and payments go in but can’t come out. It’s a hard lesson they deserve.

#4 l3wis on 07.20.15 at 7:15 pm

Woop, there it is!

http://www.huffingtonpost.com/2015/06/29/online-payday-lenders-reservations_n_7625006.html

#5 The Daily Spin on 07.21.15 at 9:42 am

Wow! Interesting article Lewis. It seems Indian reservations have become on shore money maneuvers that replace caribbean havens. Perhaps government no longer provides consumer protection.