Rush Is On For Payday Lenders Seeking Out, Striking Associations With Indian Tribes For Legalized Loan Sharking Rackets

From a recent post on Credit Slips:

• Think about what happens when you pit tribal sovereign immunity against effective consumer protection laws. In my view, no one wins. Yet payday lenders are now very actively seeking tribes with whom to partner, in order to get the benefits of tribal sovereign immunity. As one might expect, the payday lenders make out big and in most cases, the tribes get very little, at least so far.

For more, see Payday Loans and the Tribal Sovereignty Model.

See also, The Fresno Bee: Payday loans the latest venture for Chukchansi tribe:

• The payday loan industry generates $52 billion worldwide each year, and Chukchansi officials hope to get a piece of it. They're not alone; about three dozen tribes are in the business across the United States, said Allen Parker, a California consultant who works with tribes nationwide.

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• Although tribes expect to turn a profit, competing payday lenders complain that it's at their expense because tribes are sovereign nations that can ignore state regulations. While California sets a cap of $300 and a 15% interest rate for nontribal payday loans, Blue King's maximum loan is $1,000 -- and the sky's the limit for its interest rate.

See also, The Alliance between Payday Lenders and Tribes: Are Both Tribal Sovereignty and Consumer Protection at Risk?:

• This article explores how tribal sovereign immunity is being used in the context of payday lending to avoid state law and explores the ramifications of this for both consumer-protection regulation and tribes.