Judge rebuffs tribal online lenders in case against New York

Tuesday, October 1, 2013  

A federal judge has refused to stop the state of New York from taking actions that affect online lenders operated by two tribes.

The Otoe-Missouria Tribe of Oklahoma and the Lac Vieux Desert Band of Lake Superior Chippewa Indians of Michigan operate online lenders under their own laws and regulations. They accused New York Superintendent of Financial Services Benjamin Lawsky of violating their sovereignty by calling their loans illegal and by telling lending institutions to stop doing business with the tribes.

Judge Richard Sullivan, however, said the activity at issue takes place "entirely off tribal land, involving New York residents who never leave New York state." He denied the tribes' motion for a preliminary injunction.

"The undisputed facts demonstrate that the activity the state seeks to regulate is taking place in New York, off of the tribes' lands," Sullivan wrote. "Having identified no 'express federal law' prohibiting the state's regulation of payday loans made to New York residents in New York, the tribes are subject to the state's non-discriminatory anti-usary laws."

Turtle Talk has posted documents from the case, Otoe-Missouria Tribe v. New York State Dept. of Financial Services.

Get the Story:
Dealbook: Tribes Lose Effort to Block New York From Regulating Their Online Lending (The New York Times 10/1)
Five Debt Collectors Settle With New York Over Payday-Loan Rates (The Wall Street Journal 9/30)

Indian-owned lending firm seeks dismissal of New York case (09/18)
Otoe-Missouria Tribe sees benefits from Internet lending firms (9/16)
Column: States paying more attention to Indian online lenders (9/16)
Law Article: Non-Indian lending partners are likely next target (9/16)
Tribal online lenders off to court in lawsuit against New York (9/11)