|The following story was written and reported by Ernestine Chasing Hawk,
Native Sun News Correspondent. All content © Native Sun News.
“Who the heck is New York, heck with them, they are nobody,” said Steve Emery.
Western Sky closes Doors
Ernestine Chasing Hawk
Native Sun News Correspondent
EAGLE BUTTE – On Sept. 3, Western Sky Financial/Lakota Cash an online payday loan company located on the Cheyenne River Indian Reservation was forced to close its operations in Eagle Butte and Timber Lake after cash flow used to process loans was cut off.
In August, New York Department of Financial Services Superintendent Benjamin Lawsky filed suit against the company, owned by CRST tribal member Martin “Butch” Webb, accusing him of violating the state’s usury laws that cap interest rates at 25 percent.
The lawsuit also names CashCall Inc. and its affiliate, WS Funding LLC the companies which provide the loans. The lawsuit, seeks to stop the company from offering loans to New York residents and asks that they cancel any currently outstanding loans and repay borrowers any interest and fees charged above the legal limits.
New York Attorney General Eric Schneiderman and several other states including Maryland, Colorado and Nevada have filed similar lawsuits against the company.
“I’m deeply saddened that so many members of the Cheyenne River Sioux Tribe have had their lives turned upside down because of regulators and bureaucrats thousands of miles away,” Webb said. “Creating jobs here on the Cheyenne River Indian Reservation has been my proudest accomplishment, and it’s painful to know that my former employees face the prospect of long-term unemployment given the few job opportunities available to them.”
On Wednesday Oct. 9 more than 30 of the 118 former employees of Western Sky along with attorneys Sheryl Bouge and Steve Emery and spokesperson Frank King appeared before the CRST Tribal Council soliciting support to help fight what they believe is encroachment on tribal sovereignty.
“Who the heck is the state of New York, heck with them, they are nobody. They come over here from seven states away and they want to regulate us. Where do they get the authority,” Emery said.
The CRST member attorney then appealed to tribal council for support of resolution -2012 CR which reaffirms the sovereign immunity status of tribal members and business on the reservation and states that “no state regulator has authority within the territory of the CRST reservation.”
“Regulators in several states have been threatening to crack down on payday and installment loan companies…The Tribal code provides that unless there is a federal law to the contrary, the tribe asserts jurisdiction over all actions wherein the persons are present or residing within the boundaries of the reservation, including corporate entities transacting business or possessing property on the reservation.”
The resolution asks tribal council to “strongly condemn the action(s) of state regulators including those who have threatened or brought enforcement actions against Western Sky, who are infringing on the rights of the CRST and its members ‘to make their own laws and be ruled by them.’”
Emery also presented a resolution that asks the tribe to recognize “Western Sky as a business solely owned by an enrolled tribal member whose operations do not” violate CRST Law and Order Codes because the tribe enacted the Uniform Commercial Code (UCC) in 1997 which he contends supersedes the Law and Order Code. The UCC “mandates that interest in a loan may be rewritten if the term of interest is equally negotiated by the parties of the loan.”
The resolution asks the tribe to reaffirm, “the congressional purpose of promoting tribal sovereignty and self-sufficiency through the promotion of economic development on the reservation” and that “the tribe has sole regulatory authority over Western Sky’s on-reservation business activities and any disputes related to it.”
Also on the table was a resolution asking the tribe to file amicus briefs in the states suing Western Sky which attorney Bouge said will educate state courts on the complicated subject of tribal sovereignty and jurisdiction.
Lawsky took action after hearing consumer complaints that Western Sky was charging interest rates upwards of 355 percent.
Webb, however, via phone, told tribal council that his interest rates were industry standard and range from 39 to 199 percent.
“This is a case that isn’t just about Butch Webb,” he said and that other tribes are involved the same fight. “I think we need to band together. The only hope …for our future generations to come out of poverty is through technology and that right now is on-line.”
A letter from Lower Brule Sioux Tribal Chairmen Michael Jandreau was read to the CRST council in which he asks them to unite with the Great Plains Tribal Chairmen’s association “in aggressive resistance to the unrelenting attacks upon tribal sovereignty by states and federal agencies.”
In the letter Jandreau makes reference to the Consumer Financial Protection Bureau’s recent action against tribes operating payday loan companies via the internet. The CFPB was created in 2011 following the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act brought about by the financial crisis of 2007.
“Tribes are in for the fight of their lives to preserve what sovereignty we have left. We must take a hardline stance against state and federal assaults for the sake of our generation and generations to come,” Jandreau states in the letter.
“States far from us want to regulate commercial regulations between our tribes and people that we invite to do business with us on our reservations over the internet. Federal agencies that are supposed to be our trustees are destructively restricting our sovereignty by broadly interpreting federal consumer laws so that tribes can no longer regulate their consumer activities within their reservations.”
He said that any threat to any individual tribe is a threat to all tribal nations and encouraged all members of the GPTTCA to support Webb in his fight against the state of New York.
In June 2012 CFPB issued the subpoenas to Great Plains Lending LLC, MobiLoans LLC and Plain Green LLC, which are owned by the Otoe-Missouria Tribe of Indians in Oklahoma, Tunica-Biloxi Tribe of Louisiana and the Chippewa Cree Tribe of Montana who also engage in on-line lending.
The tribes contested the CFPB’s authority.
In a decision published Sept. 26, Richard Cordray, Director of the CFPB ordered, the lenders to comply with the civil subpoenas ordered last year seeking information on their businesses and gave them 21 days to comply.
The subpoenas were issued as part of a CFPB probe into whether the lenders are violating federal laws while making or advertising loans.
When it comes to personal loans, federal law does not ban predatory lending. However, 25 states have laws against predatory lending. Additionally, state usury laws put caps on interest rates, usually around 21 percent or lower.
Following presentations by several former Western Sky employees who told the CRST council that they came to defend tribal sovereignty, the council went into executive session.
“We did not come up here to defend Mr. Webb. We the people came here as we sat back and learned about tribal jurisdiction, we’re the ones putting up this fight,” Antoinette Nickols said.
All three of the resolutions were voted down by the CRST council on Wed. Oct. 9.
(Contact Ernestine Chasing Hawk at email@example.com)
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