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The continuing future of Tribal Lending Underneath The Customer Financial Protection Bureau

Tuesday, August 18th, 2020

The continuing future of Tribal Lending Underneath The Customer Financial Protection Bureau

Some Indian tribes – specially impecunious tribes found remotely from populace centers, without enough visitors to engage profitably in casino gambling – are finding much-needed income from consumer financing on the internet.

The tribe forms a tribal lending entity (TLE) that is financed by a third party in a typical model. The TLE then makes loans on the internet to consumers nationwide, frequently on terms which can be illegal beneath the internal rules of this continuing states where in actuality the borrowers live. The TLE benefits from the tribe’s sovereign immunity because the TLE is deemed an “arm” of the tribe. Because of this, the TLE could be sued only under not a lot of circumstances; and, possibly even more to the point, the TLE is exempt from state-court discovery that is most meant to unearth the economic relationship amongst the TLE and its own non-tribal financier. (more…)