Minnesota attorney general settles predatory lending case involving Montana tribe

An online lending business owned by a Montana Indian tribe will cease making allegedly predatory and illegal loans in Minnesota after a settlement with the state Attorney General’s Office.

Minnesota Attorney General Keith Ellison in November sued the principal officers of a lending operation owed by the Fort Belknap Indian Community over thousands of online loans to state consumers carrying interest rates between 474% and 795%.

Ellison’s office, alleging violations of state and federal law, asked the federal court for an injunction to shutdown Fort Belknap’s business in Minnesota. Earlier this week, Ellison’s office and Fort Belknap officials reached a settlement, which still needs court approval.

“If I find lenders charging outrageous interest rates and take advantage of Minnesotans, I will step in and bring a stop to it — whether it’s a business on your street corner or online,” Ellison said in a press statement Thursday.

Attorneys for Fort Belknap tribal officials did not respond to requests for comment.

Fort Belknap’s lending business will stop marketing and making loans to Minnesota residents under its current business model in the state, the settlement said. However, the lenders can operate in Minnesota if they comply with state consumer lending laws.

Also under the settlement, Fort Belknap’s lenders will modify existing loans in Minnesota to prevent the collection of interest accrued after a loan’s origination, the settlement said. The lenders can only demand payments on existing loans to recover unpaid principal.

Ellison’s office has claimed Fort Belknap’s tribal lenders broke Minnesota laws for usury, consumer fraud and deceptive trade practices, as well as a federal racketeering statute. The Fort Belknap defendants have denied those allegations, and they make no admission of law violations or wrongdoing in the settlement.

Several tribes based in the West and Midwest — though not in Minnesota — run online loan businesses. They can provide vital short-term funding for those with weak credit histories, but they carry high interest rates and can trap consumers in an expensive cycle of debt repayment.

The Fort Belknap community is located about 40 miles south of the Canadian border, and consists of the Gros Ventre (Aaniiih) and Assiniboine (Nakoda) tribes. The tribe owns Island Mountain Development Group, which in turn operates three online lenders: Bright Lending, Green Trust Cash and Target Cash Now.

Defendants currently named in Ellison’s suit are Evan Azure and William Bell, respectively CEO and chairman of Island Mountain. They shielded themselves from responsibility for allegedly illegal loans by citing the sovereignty of the Fort Belknap community, Ellison claimed in the suit.

“They represent to consumers in Minnesota that the out-of-state status of the tribal owner and operation of tribal law allows them to . . . avoid compliance with Minnesota law,” Ellison’s suit claims.

Indigenous nations have inherent sovereignty that predates the founding of the United States. Like states and the federal government, they have sovereign immunity from lawsuits. That immunity can extend to tribal businesses and — at times — individual tribal officials and employees.

The Fort Belknap defendants claimed in earlier court filings that Ellison sought “to interfere with the sovereign economic development efforts of a tribal business enterprise.”

In a statement Thursday, Ellison said “my approach to this case is to stop further violations while also preserving and respecting the tribes’ sovereign status.”

Federal courts are rife with consumer lawsuits involving tribal online lenders, with many plaintiffs claiming they’re fronts for non-Indian businesses that want to take advantage of tribal sovereignty. However, suits involving tribal lenders by state attorneys general are not nearly as common.