A Sour Relationship between Federal and the Native American Tribes on Payday Lending

The US Federal government is investigating purported payday lending practices being carried out in native American tribal lands. There are payday lending firms that are said to be operating under companies owned by native American tribes. The crucial point is that the regulators are trying to protect consumers and the tribal leaders on the other hand are defending their economic rights since they claim to benefit from such trading of undercover payday lending practices.

The aspect of sovereign immunity is very complex but that said and done, it does not grant any group of people to operate in dealings that are outlawed. There is a problem in the way in which legal matters that touch on the native American tribes are handled in courts.

For example, cases put forward against apparent tribal payday loan operations are usually dismissed or tossed out of state court on grounds of sovereign immunity. The legal concept does not bar federals from taking appropriate actions against payday firms operating under cover or on false pretence. There is harm being created on the citizens while the native American tribes leaders claim that their sovereignty is being undermined.

Tribal leaders claim that the actions of Consumer Financial Protection Bureau- CFPB are unfounded and most of the payday lending firms that run under the auspices of native tribes are in fact owned and controlled by native Americans. They further claim that the services are genuine and should not spark tension or legitimacy doubts from the federal legal arms. The leaders argue that they will fight any incursion that is perpetrated on their rights.

However, there are also claims that these leaders could be shielding businesses that could be ruining their sovereignty. If not checked, the sovereignty of native American tribes could be ruined by their insatiable practices. There have been claims that a particular payday lender has unfairly subjected borrowers who are debt-burdened to travel to South Dakota to appear before a tribal court.

This is a court, which does not have jurisdiction over their cases, and therefore, there is need for urgent redress on this issue. Consumers may be suffering under these payday loan firm purporting to be operated by natives. Consumers are perhaps being subjected to abusive collection tactics and lofty or inflated fees. The question is; should the Federal government remain silent over the payday loan issues being witnessed in the native American tribal lands?