Loan Sharks Find Safe Havens On Native American Tribal Lands To Carry Out Their Handiwork

In Portland, Oregon, KATU-TV Channel 2 reports:

• Online loan sharks are exploiting a gaping loophole to get their hands on your money - and local lawmakers are fighting back hard. What are these loan sharks doing that's so wrong?
  
  They're setting up shop on Native American reservations so they can avoid state and federal laws that protect consumers. It's one of the worst cases of online crime the KATU On Your Side Investigators have ever come across.
  
  Oregon Democratic Senator Jeff Merkley told KATU he has been fighting for years to stop it. "What they're doing is morally wrong," Merkley said. "It breaks state law. It destroys families and we have to stop it."
  
  We’ve been talking to a Salem woman – hard working but behind on her bills like a lot of us – who is in over her head with a payday loan company – way, way over her head.
  
  Elena Peralta, 20, took out $150 to pay her car insurance – but in a matter of weeks, she was on the hook for $4,500 and teetering on the brink of bankruptcy. The business she got the loan from is called US Fast Cash, which operates on the Ottawa tribe's reservation in Oklahoma.
  
  The loan company, Peralta found out, had the right to raid her bank account at will. And when that money ran out, she started getting phone calls from ‘collection agents’ every day and night, and even at work, threatening her with legal action and harassing her.
  
  And the payments Peralta did manage to make never touched the principal – just the outrageous triple-digit interest rates the loan company was charging her. "It affected my family," she said. "Not just myself, my whole family."
  
  Everything about this loan sounds illegal under Oregon law. Regulators agree - so much so that the state has already red-flagged these online lenders in this consumer alert.
  
  But here's what we found out when we started looking into this - nothing can be done to stop them, or bring the worst of these cyber loan sharks to justice. Not yet at least.
  
  This woman’s case – and thousands like it – is now at the center of a legal battle at the highest levels of the U.S. Government –a story that’s taken us from Portland, to the halls of Congress, to a dusty town in Oklahoma - and deep into the pages of one of the murkiest chapters in America’s history. Millions of dollars hangs in the balance as the rights of you, the consumer, are pitted against the rights of all Native Americans.
  
  Their treaties with the United States are century-old binding contracts upheld by numerous court decisions. But the issue of tribal sovereignty is taking center stage in the fight to stop online loan sharks.

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• Merkley is now trying to push a bill that he authored through the U.S. Senate. It would stop the lending from tribal lands in its tracks. "It simply says that you can't operate out of a tribal reservation or overseas, or anywhere else, and violate the state laws," Merkley said.
  
  If the bill becomes law, the Consumer Fraud Protection Bureau will also have the power to stop the loan sharks at the source, making it impossible for them to dip their electronic fingers into the bank accounts of anyone.
  
  Merkley expects a fight. He says lenders and their lobbyists will line up to stop the bill’s passage.

For the story, see Online loan sharks find tribal lands are an easy way to skirt the law.