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.