The fight against payday lenders operating through affiliation with Native American tribes to skirt Connecticut law escalated this week as leaders of the state’s federally recognized Indian tribes joined forces with state officials to denounce the often financially devastating credit practice.
WTNH-News8 reports that Mohegan Tribal chairman Kevin Brown and Mashantucket Pequot Tribal chairman Rodney Butler shared their support on Monday with Connecticut Governor Dannel Malloy and Rep. Matthew Lesser’s effort to end one tribe’s practice of offering high-interest payday loan to residents though direct mail and websites.
The Connecticut Department of Banking previously took the Otoe-Missouria tribe of Oklahoma – the owner of two online lenders – to court and fined it $1.5 million for violating Connecticut’s loan regulations capping interest rates at 12%.
Shortly after the lawsuit was filed, another group began purchasing billboards and sending post cards to consumers saying the state’s actions were an attack on Native American tribes.
Brown said during a press conference that rejecting unlicensed payday lending practices “has nothing to do with denying Native American business, sovereignty or welfare, and everything to do with protecting the consumers of the state of Connecticut.”
Butler further raised concerns about the industry, saying that “tribes and the entire industry should also ensure they are being responsible and that their customers can repay those loans without getting charged unreasonable fees and paying extremely high interest rates.”
Both tribal leaders said they have previously been approached by the Oklahoma tribe to do business, but both denied the offer.
By showing support for the state’s fight, both leaders said they wanted to ensure there was no confusion over where the attacks against Malloy are coming from.
“To ensure that Connecticut residents don’t mistake the flyers that they’re seeing, the billboards that they’re seeing with these two tribes in the state of Connecticut,” Brown said.
In addition to rallying support behind the state’s fight against payday lending, Rep. Lesser said Monday that the legislature’s Banks Committee is working on a bill that would declare the most egregious loans “null and void,” meaning consumers wouldn’t be liable for any amount in excess of the maximum 12% interest rate.
Banking Committee Chair: ‘Payday loan sharks preying on most vulnerable’ [WTNH-News8]
by Ashlee Kieler via Consumerist
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