Nathalie Martin and Joshua Schwartz have posted their paper, “The Alliance between Payday Lenders and Tribes: Are Both Tribal Sovereignty and Consumer Protection at Risk?,” on SSRN. The paper appears in the Washington & Lee Law Review. Here is the abstract:
This article explores how tribal sovereign immunity is being used in the context of payday lending to avoid state law and explores the ramifications of this for both consumer-protection regulation and tribes. It discusses payday loans and tribal sovereignty generally, as well as tribal sovereign immunity, then discusses what might be done to address this consumer protection issue. More specifically, we discuss who in society has the power and resolve to dissolve this alliance, identifying tribes themselves, the Supreme Court, Congress, the Federal Trade Commission, and the Consumer Financial Protection Bureau as possibilities.
This is an important piece of scholarship from balanced scholars. Some tribal leaders and lawyers are thinking that payday lending is the new gaming for Indian country, but there seems to me that a certain amount of consent is missing in the way some payday lenders are behaving. I don’t think we saw the extent of bad faith in the early days of Indian gaming that we are sometimes seeing now with some of these tribal payday lenders. It’s important for Indian country as a whole to come together on this question as soon a possible, or else Congress will.