A Wisconsin Tribe Built a Lending Empire Charging 600% Annual Rates to Borrowers
A Wisconsin Tribe Built a Lending Empire Charging 600% Annual Rates to Borrowers
The Lac du Flambeau tribe is at the center of a $1 billion class-action settlement that comes after years of fending off claims of predatory lending practices.
In bankruptcy filings and consumer complaints, thousands of people across the country make pleas for relief from high-interest loans with punishing annual rates that often exceed 600%.
Although they borrowed small sums online from a slew of businesses with catchy names — such as Loan at Last or Sky Trail Cash — their loans stemmed from the same massive operation owned by a small Native American tribe in a remote part of Wisconsin.
Over the past decade, the Lac du Flambeau Band of Lake Superior Chippewa Indians has grown to become a prominent player in the tribal lending industry, generating far-reaching impact and leaving a legacy of economic despair. A ProPublica analysis found companies owned by the LDF tribe showed up as a creditor in roughly 1 out of every 100 bankruptcy cases sampled nationwide.
That’s the highest frequency associated with any of the tribes doing business in this sector of the payday loan industry. And it translates to an estimated 4,800 bankruptcy cases, on average, per year.
Alternative headline: Indigenous corporation takes a page from the Wall Street playbook to benefit tribe.
Alternative headline: Capitalist scum fuck over innocent people.
This is like cheering Thatcher for being a girlboss.
Look I get it, they deserve a win after what their entire civilization went through and is still going through a thanks to the government in particular and white people in general. That does not mean, however, that it justifies fucking over already poor people using exorbitantly high interest loans. John Oliver did an episode about these kinds of things once and they are so goddamn predatory it's disgusting.
Never said I agreed with it...
First nations group gets their pound of flesh; more at 11
Reminds me of this old commercial I used to see. I think they got shut down for predatory lending IIRC. https://youtu.be/xgLMgVq4p_E?feature=shared
I remember those! Also the fine print:
The APR for a typical loan of $10,000 is 89.66% with 84 monthly payments of $743.99.
For the curious, that means you pay
$743.99 x 84 = $62,495.16
How the fuck that commercial aired more than once without any sort of federal intervention boggles the mind.
I was wondering if this was a legit tribe or one of those shitty "white people desperate to open an Indian casino" tribes with two registered members that are like 1/24000 native American or some shit. I kind of looked them on Wikipedia, they seem legit.
There is a special level in hell for those who prey on their own kind.
Their land was stolen. This is in no way worse than what Wall St continues to do. Capitalism, baby!
I'm fairly certain that they lend to everyone, not just other tribes. The article makes it sound like the tribes out in the boonies need to do something to survive, and the US federal aid mandated in our treaties is hideously insufficient for their needs. Like, I think that what they're doing is bad because you shouldn't harm people, and you especially shouldn't harm people who are struggling. However, I can at least understand why they're doing it. I can also see that the society they're targeting shares responsibility for the situation. If the US had been continuously honoring the letter and spirit of the treaties we signed with the tribes, then the tribes would've have to resort to exploitative shit like casinos and predatory lending to make money. People will do whatever it takes to improve their situation, and it's a shame that the US has failed in this regard.
As an aside and for the sake of clarity, I think casinos are predatory and exploit people who don't understand their odds, but I'm not against their existence in general, or their existence on reservations. Native American folks can do what they want, it's their goddamned land, and the consenting adults who go to casinos have a responsibility to themselves. I only bring up casinos because of my perception of them and their presence on reservations.
(Also, fuck non-tribe people that use reservations as a way to skirt US regulations. I had no idea that non-tribe people used tribes as fronts for shitty lending operations. Again, kinda smells like something that could have been prevented with proper federal aid.)
I guess they were running out of ideas for law suits
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