Debt: The Tribal Lending Industry Offers Quick Cash Online at Outrageous Interest Rates. Here's How It's Survived.

[Passages]

Despite lawsuits, prosecutions and federal crackdown attempts, the tribal lending industry has adapted for over a decade, providing exorbitant loans to millions of financially vulnerable consumers.


More than a decade ago, loan financier Matt Martorello was worried that the golden days for his high-interest lending venture were over.

In an email to his accountants, he detailed how attorneys general in multiple states were sending cease-and-desist letters to the online enterprise he operated with a Native American tribe based in Michigan. Major banks wanted nothing to do with the business, which offered small-dollar loans at exorbitant interest rates far above limits set by many states. Federal regulators were suing his competitors.

The pressure was getting to be too much. Martorello feared the federal government seeking “every $ I have” in restitution, he wrote in the December 2012 email.

SNIP

Powerful allies in the financial sector and payday loan industry, which encompasses all forms of short-term lending, have served as protectors at key junctures. Even as many states kicked out storefront payday and auto title lenders, online tribal lending flourished. Industry lobbyists helped beat back congressional plans for consumer protections, while payday industry lawyers dragged the CFPB to court and hindered the agency.
https://www.propublica.org/article/tribal-lending-industry-federal-oversight?utm_campaign=propublica-sprout&utm_content=1735830001&utm_medium=social&utm_source=twitter

[Dennis Donovan]

1. The CFPB was created to combat this kind of loan-sharkery, but the incoming admin wants to "delete" the agency n/t