The state of New York filed suit on Monday against an Internet loan firm operated by a member of the
Cheyenne River Sioux Tribe of South Dakota.
Martin Webb, the owner of
Western Sky Financial, and his affiliates offer loans that are not legal under New York law.
The lawsuit claims he is hiding behind tribal sovereignty even though his business is not owned by his tribe or authorized by his tribe.
"Western Sky and CashCall charged exorbitant interest rates on their loans to scam New Yorkers out of millions of dollars,”
New York Attorney General Eric T. Schneiderman said in a press release. "With this case and others, my office will continue to fight to protect New Yorkers from illegal business practices and stop companies that seek to prey upon consumers facing tough economic times."
The
Native American Financial Services Association welcomed the development. The group represents tribes that own Internet loan firms or charter them.
"Western Sky Loans does not abide by these consumer-friendly practices, is not an enterprise wholly owned by a federally-recognized tribe, is not regulated by a tribal regulatory lending authority, does not operate according to tribal law, and breaks the covenants meant to benefit tribal governments and their members,"
Barry Brandon, the group's executive director, said in a statement.
Brandon, however, criticized the state for targeting Internet loan firms operated by tribes.
Gov. Andrew Cuomo (D) has called on such firms to stop doing businesses with consumers in New York.
Get the Story:
New York Attorney General Files Lawsuit Against Payday Lenders
(The Wall Street Journal 8/13)
Dealbook:
Suit Accuses Online Lender of Violating New York Rate Caps
(The New York Times 8/12)
Indian Tribes Oppose New York Order on Online Lenders
(The Wall Street Journal 8/12)
NY finance official on the warpath against Native American payday lenders
(The Daily Caller 8/11)
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increased scrutiny (8/9)
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