In an era where the American left has defined “racial justice” as one of the most pressing priorities in the country (alongside climate change and eating the rich), there’s a pronounced disparity in terms of which racial or ethnic groups should be near the head of the line for favorable treatment. Most of the focus is on Black and Hispanic communities, while Asian and Native American groups frequently seem to be an afterthought at best. It’s the latter group I wanted to focus on today because there have been ongoing efforts to chip away at the sovereignty of Indigenous American tribes in the courts using creative, if not outright strange reinterpretations of the law.
One prime example comes in the form of efforts to restrict various practices engaged in by the tribes on their own lands when their laws come in conflict with state laws. Traditionally, as long as the activities in question are primarily restricted to tribal lands and the members of the tribe, they are considered separate from state and local laws, but activists have attempted to undermine those rights when it suits their agenda. That appeared to be the situation in the case of Great Plains Lending LLC et al. v. Department Of Banking et al. The State of Connecticut’s Department of Banking went after Great Plains Lending, an entity of the Otoe-Missouria Tribe, accusing them of improper banking practices and interest rates because of a payday loan operation they were running on the reservation.
This case was largely supported and driven by the work of the National Consumer Law Center, a self-described “economic justice” think tank that appears to specialize in the aforementioned creative reinterpretation of the laws to further their agenda. They gained some early success in this suit, convincing a lower court to take their side in restricting the activities of the tribal financial entity. When the Second Circuit Court of Appeals ruled in their favor in April of 2019, NCLC sent out celebratory announcements heralding the “death of payday lending” on the tribe’s lands.
The Second Circuit Court of Appeals in a decision today against Think Finance and the officers of Plain Green Loans has made crystal clear that online tribal payday lenders must comply with state interest rate limits, licensing laws and other state laws, and can be sued through their officers for injunctive relief if they do not.
“This decision sounds the death knell for tribal payday lending,” said Lauren Saunders, associate director of the National Consumer Law Center.
As it turned out, those celebrations were premature. It took another two years, but a few months ago the state supreme court ruled in favor of tribal sovereignty and struck down the lower court’s ruling. Since Great Plains met the required tests for being defined as an arm of the tribe engaging in tribal business, they were exempt from the applicable state laws.
The justices said Thursday the lower court was incorrect to rule that further proceedings are required to determine whether Great Plains is an arm of the tribe, instead applying a test adopted by the Fourth, Ninth, and Tenth circuits that analyzes whether business entities constitute arms of the tribe for purposes of tribal sovereign immunity.
“The record reflects that it was created under tribal law and is controlled by directors appointed by the council for the purpose of promoting tribal economic development and welfare,” the high court said. “The record further indicates a significant financial relationship between the tribe and Great Plains, which leads us to conclude that withholding tribal sovereign immunity from Great Plains as an arm of the tribe would interfere with the tribe’s self-governance and economic development.”
As to the question at the heart of the initial lawsuit, I will once again remind readers that I am not a fan of payday lending schemes. I find the practice to be predatory and the institutions who engage in it frequently prey upon those who are desperate, gullible, or both. The interest rates that they charge in many cases should be (and in some cases are) criminal. But with that said, the rest of the country defines those lending laws for financial entities operating in the United States. But in the case outlined above, we’re not talking about federal, state, or municipal law. We’re talking about tribal practices and sovereignty means sovereignty. Also, nobody is forcing anyone to take out those loans, so there are questions of individual responsibility involved as well.
The Great Plains case was a close call, though, in the end, the courts sided with the rights of the tribes to manage their own internal affairs. But it’s not the only case that’s shown up in courts across the nation. Challenges have been raised against the rights of the tribes to engage in everything from banking and gambling to energy exploration. And “economic justice” groups like NCLC are poised to push those efforts by tailoring new interpretations of the law that ignore America’s commitment to allowing indigenous tribes to manage their own affairs. If you claim to be a fighter for “racial justice” or “economic justice” in the 21st century, you should probably check your own woke bona fides at the door and make sure you’re representing all minorities and not just a chosen few.