Why are New York State authorities vexing Indian tribes? Article I, section 8, clause 3 of the United States Constitution empowers Congress exclusively "To regulate commerce with the Indian tribes." States are ousted from jurisdiction for good reason. They have often been the deadliest enemies of Native Americans. Yet the Superintendent of New York's Department of Financial Services, Ben Lawsky, has unleashed a regulatory war against sixteen Indian tribes and other entities for online lending to willing borrowers at interest rates exceeding the state's 25 percent ceiling for short-term, payday loans. Superintendent Lawsky has sent cease-and-desist letters to 35 lenders and 112 banks providing or facilitating short-term, high-interest payday loans to consumers online at rates that exceed New York's cap. Mr. Lawsky is not only trespassing on Indian tribal sovereignty. He is also frustrating the commendable initiatives of Indian tribes to promote employment and economic self-sufficiency and to accommodate the credit needs of New York residents. The advent of the Internet era opened opportunities for Tribal Nations because e-commerce requires limited capital and infrastructure investment. Tribal Governments with little or no gaming capacity now enjoy a chance to prosper. One attractive opportunity is consumer lending. Advances in technology, data, and analytics have facilitated the underwriting of sophisticated online consumer lending products for unbanked borrowers.Get the Story:
Bruce Fein: Misconceived New York Attack on Tribal Sovereignty (The Huffington Post 10/14)
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