A Tribal Lending Enterprise (TLE) is a type of American

financial services Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, ...

and

lending In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that ...

organization owned and operated by a federally-recognized Native American tribal government. Native American tribal governments have established TLEs to further expand their business portfolios beyond traditional industries associated with tribal economies, such as

gaming Gaming may refer to: Games and sports The act of playing games, as in: * Legalized gambling, playing games of chance for money, often referred to in law as "gaming" * Playing a role-playing game, in which players assume fictional roles * Playing ...

payday lending A payday loan (also called a payday advance, salary loan, payroll loan, small dollar loan, short term, or cash advance loan) is a short-term unsecured loan, often characterized by high interest rates. The term "payday" in payday loan refers to ...

, natural resources, and government contracting. Native American tribal lending is often operated through an online hub, based on sovereign tribal land, and offering loans to consumers (government-to-consumer lending).

History

Native American tribes have diversified revenue streams in internet-based consumer lending through tribal lending enterprises that are often financed by a third (outside) party. As arms of the tribe
tribal
lending entities benefit from the tribes' sovereign immunity in relation to state-based consumer lending regulation; "as nations that predate the Constitution and the United States, tribal nations can generally operate in licensed environments independent of state regulation."

Controversies

Some critics of short-term lending have alleged that American Indian tribes do not benefit from their lending businesses, and that the businesses are a loophole allowing "

firms affiliating with Native American tribes and taking advantage of tribal sovereignty to offer loans online that would otherwise be blocked by many US state laws." Leaders in American Indian tribal lending have rejected these allegations of their tribes being "rented" for private parties for profit at the expense of tribal members. The Native American Financial Services Association has referred to these allegations as "offensive to all Native Americans". Some members of

Congress A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...

have agreed, and in 2013, a letter signed by 31 congressmen and women opposed a federal crackdown on tribal lenders. Multiple court cases have also reinforced tribes' ability to operate these businesses. Many tribes have made the strategic business decision to outsource which has created a peak for tribe gaming as of 2018. Because of this, online tribal lending has become a key economic tool for American Indian Tribes. In July 2020, the

United States Court of Appeals for the Third Circuit The United States Court of Appeals for the Third Circuit (in case citations, 3d Cir.) is a federal court with appellate jurisdiction over the district courts for the following districts: * District of Delaware * District of New Jersey * East ...

found that the Otoe–Missouria Tribe of Indians payday lender could not compel arbitration to defeat a

Racketeer Influenced and Corrupt Organizations Act The Racketeer Influenced and Corrupt Organizations (RICO) Act is a United States federal law that provides for extended criminal penalties and a civil cause of action for acts performed as part of an ongoing criminal organization. RICO was en ...

lawsuit brought by borrowers because the choice of law clause in the loans had adopted only the tribe's own law. The company settled the

class action A class action, also known as a class-action lawsuit, class suit, or representative action, is a type of lawsuit where one of the parties is a group of people who are represented collectively by a member or members of that group. The class actio ...

lawsuit in 2021, which had alleged illegal predatory lending for $182 million, including $86 million in cash and $76 million in loan cancellation.

Examples

Examples of Tribal Lending Enterprises include the Turtle Mountain Band of Chippewa Indians,

Picayune Rancheria of Chukchansi Indians The Picayune Rancheria of Chukchansi Indians of California is a federally recognized tribe of indigenous people of California. They are Chukchansi or Foothills Yokuts. Picayune Rancheria is the tribe's ranchería, located in Madera County in cen ...

Plain Green Loans Plain Green Loans is an online installment loan company providing emergency cash via the internet. It is a Tribal Lending Enterprise owned by the Chippewa Cree Tribe on the Rocky Boy Indian Reservation. Plain Green Loans (PGL) is an online reso ...

, Chippewa Cree and others.

References

{{reflist Financial services in the United States History of indigenous peoples of North America Native American topics Payday loan companies United States Bureau of Indian Affairs United States federal Native American legislation