Tribal-Lending-Tribe-Payday-Loans

By Allen Parker: The  Wall Street Journal article addressing the phenomenon of tribes and payday loan companies states, “All it takes to make a deal is a willing tribe and an eager payday lender.” It takes far more than that in order to be protected under the tribe’s sovereign immunity umbrella. Here are some of the issues that must be addressed:

• The business must be tribally owned. In other words, the business has to be a legal extension of the tribe in order to come under the tribe’s sovereign immunity umbrella.
• You, as a payday loan company or investor, must be guaranteed that the tribe will comply with its contractual mandates. There are examples of tribes defaulting on loans or not complying with contracts. Also, changes in contractual relationships can be sought after tribal elections and there are new tribal members in charge. However, there is a way to ensure compliance which is enforceable in a court of law, if need be; and that is to insist that a limited waiver of sovereign immunity specific to the terms of the contract be included in the agreement. Moreover, that limited waiver must be enforceable in a state court, not a tribal court.
• You want to be able to manage your business free of outside interference.

All the preceding issues can be addressed, and win-win relationships between tribes and payday loan companies can be successfully negotiated.

To learn more: Allen@Consultants4Tribes.com