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STRETCHING THE ENVELOPE OF TRIBAL SOVEREIGN IMMUNITY?

An Investigation of the Relationships Between Online Payday Lenders and Native American Tribes

November 2017

by

Kyra Taylor

with

Leslie Bailey Victoria W. Ni The Public Justice Foundation

This project was made possible by a grant from Silicon Valley Community Foundation

TABLE OF CONTENTS

I. EXECUTIVE SUMMARY .............................................................................1

A. Purpose.....................................................................................................................1

B. Key Findings ............................................................................................................2

C. Implications and Need for More Oversight .............................................................4

II. BACKGROUND .............................................................................................5

A. The "Tribal Payday" Model.....................................................................................5

B. Public Justice's Anti-Payday Lending Initiative....................................................11

C. Acknowledgements................................................................................................12

III. RESOURCES AND METHODOLOGY ......................................................12

IV. DATA AND FINDINGS...............................................................................15

A. No State or Federal Databases Listing "Tribal" Payday Lenders ..........................16

B. Al Jazeera America Investigative Series: Payday Nation......................................17

1. Raw Data..........................................................................................................17

Figure 1: Summary Raw Data from Al Jazeera's Payday Nation ...................17

2. Data Specific to California...............................................................................18

a. Summary of Lending Website Data

18

Figure 2: Al Jazeera's Lending Website Data Specific to California ...........18

b. California Tribes Referenced by Lending Sites

18

c. Updating the Al Jazeera Dataset

19

Figure 3: Updated Al Jazeera Data: California...............................................20

C. Tribes with a California Connection Currently Mentioned By Lending Websites ...........................................................................................................20

1. Location of Tribes Mentioned by Researched Lending Websites ...................21

Figure 4: Location of Tribes Purportedly Affiliated With Lending Websites With Connection to California .......................................21

2. Size of Tribes ...................................................................................................23

Figure 5: Membership Size of Tribes Mentioned by Lending Websites With Connection to California .......................................23

3. Frequency in Which Tribes Were Mentioned On Lending Websites ..............24

Figure 6: Frequency in Which Tribes Were Referenced By Lending Websites .........................................................................................24

D. Additional Tribal Affiliations Researched .............................................................24

Figure 7: Summary of Websites Reviewed ....................................................25

E. Composition of Lending Websites Researched .....................................................25

Figure 8: Summary of Websites Reviewed ....................................................26

Figure 9: Lending Websites Claiming Tribal Affiliation ...............................26

Figure 10: Tribe Affiliation Language on Active Lending Websites Referencing California Tribes........................................................30

F. The Anatomy of a Lending Website......................................................................31

1. General Trends of Lending Websites ..............................................................32

2. Contract Terms on Active Lending Websites ..................................................33

Figure 11: Contract Terms Stated On Active Lending Websites ...................34

3. Trends Among Lending Websites Claiming Association with the Same Tribe ...........................................................................................................65

4. Trademark Data For Active Lending Websites ...............................................66

Figure 12: Trademark Registration Data for Lending Websites......................67

G. Data Used to Determine the Scope of Relationships Between Tribes and Lenders .............................................................................................................70

1. Availability of Official Tribal Publications Mentioning Payday Lending Involvement .................................................................................72

Figure 13: Summary of Information Available on Tribal Websites ................72

2. Litigation Involving Tribal Payday Lending ...................................................76

Figure 14: Summary of Litigation By Tribe ....................................................77

Figure 15: Litigation History Involving Payday Businesses Claiming Tribal Affiliation ............................................................................83

3. Alternative Sources of Information Relating To Tribes' Relationship To Payday Lenders ..................................................................................103

H. Analysis of Tribal Sources, Media Articles, and Litigation Documents Discussing the Involvement of Tribes in Payday Businesses ........................103

1. Tribal Ordinances, Resolutions, and Codes ...................................................103

Figure 16: Sources of Tribal Corporation Formation Documents Purporting to Create Payday Lending Businesses or Tribal Documents Purportedly Creating Regulatory Agencies, By Tribe .............................................................................................104

a. Tribal Documents Purportedly Creating Payday Businesses or

Approving of Tribe's Affiliation with a Payday Lender

109

Figure 17: Summary of Tribal Documents Purporting to Create Payday Lending Businesses......................................................................111

b. Tribal Documents Purportedly Creating Tribal Lending

Regulatory Agencies

125

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Figure 18: Sources of Tribal Documents Purportedly Creating Regulatory Agencies ....................................................................126

Figure 19: Summary of Tribal Documents Purportedly Creating Regulatory Agencies ....................................................................130

2. Tribes' and Tribal Officials' Statements About Involvement in Payday Lending ....................................................................................................143

a. Statements Made in Internal Tribal Documents and to

Newspapers, Other Periodicals, and Government Entities

144

Figure 20: Statements About Payday Business in Tribal Newsletters or Tribal Websites ............................................................................145

Figure 21: Tribal Members' Statements to Newspapers Regarding Payday Industry ...........................................................................149

b. Tribal Officials' Statements in Court Documents

161

Figure 22: Tribal Declarations Filed in Litigation ........................................163

I. California Law and Enforcement Against Payday Lenders.................................172

1. The California Deferred Deposit Transaction Law .........................................172

2. Application of the CDDTL to "Tribal" Payday Lenders ...............................173

3. Relevant DBO Enforcement ..........................................................................174

4. Court and Administrative Decisions Interpreting the CDDTL......................177

V. SECONDARY ACTORS IN TRIBAL PAYDAY SCHEME ....................178

A. Lobbying Groups Advancing Tribal Involvement in Online Payday Lending ..........................................................................................................178

1. The Native American Financial Services Association (NAFSA)..................178

Figure 23: NAFSA's Board of Directors in 2013 ..........................................181

Figure 24: NAFSA's Current Board of Directors..........................................181

2. Online Lenders Alliance (OLA) ....................................................................182

B. Lead Generating Websites ...................................................................................184

C. "Tribal Matchmakers" .........................................................................................186

VI. RELATIONSHIPS BETWEEN TRIBES AND PAYDAY LENDERS ? CASE STUDIES..........................................................................................186

A. Summary of Data Collected.................................................................................187

Figure 25: Summary of All Available Data For Each Tribe.........................189

B. Case Studies .........................................................................................................191

1. Cheyenne River Sioux, Western Sky, and CashCall .....................................191

2. Wakpamni Oglala Sioux, ..............................................194

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3. Miami Tribe of Oklahoma, Miami Nation Enterprises, AMG Services, and Scott Tucker ......................................................................................196

4. Otoe-Missouria Tribe, Great Plains Lending, American Web Loan, Clear Creek Lending ................................................................................200

5. Lac Vieux Desert Band, Castle Payday, Big Picture Loans, Sovereign Lending Solutions, Red Rock Lending, and Bellicose Capital................203

6. Habematolel Tribe, ArrowShade, Mountain Summit Financial, Silver Cloud, and Golden Valley........................................................................204

VII. CONCLUSION............................................................................................208

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