Rent-a-tribe lawsuits are legal actions that involve violations of loan and lending laws. In a rent-a-tribe lawsuit, an unlicensed lender may attempt to avoid excessive interest rate regulations by claiming that they are affiliated with an Indian tribe. Under this guise, the lender may claim that they have federal sovereign immunity and are therefore able to “get away” with charging much higher interest rates than is normally allowed under law. These usually involve some form of payday loan arrangement.
In addition to the interest rate issues, the lender may also attempt to use their affiliation with or sponsorship by a tribe in order to remain “shielded” from various laws. They may even situate themselves at the outskirts of a tribal reservation to maintain the appearance of tribal relationships.
In most cases, their relationship to a tribe is non-existent; or, a relationship may exist, but violations may still be occurring anyhow- even with such sponsorship or relationship, they may not be entitled to such practices depending on the circumstances.
How Can I Recognize a Rent-A-Tribe Scheme?
In most cases, a rent-a-tribe fraud scheme may involve:
- A loan agent or company that is not certified
- Attempts to collect excessively high interest rates (in some cases, rates have been as high as 100%)
Also, some rent-a-tribe schemes may require the borrower to sign an arbitration clause or a liability clause that states that the borrower won’t sue the lender in the event of a legal dispute. These types of clauses, along with the factors mentioned above, may signal that a rent-a-tribe type arrangement is being perpetrated. You should contact authorities or a legal professional if you suspect that you are involved in such an arrangement.
Are There Any Legal Remedies for Rent-A-Tribe Legal Issues?
Under most finance laws, a person who has been the victim of usury (illegal charging of excessive interest rates) may have access to various legal remedies. In most instances, the borrower may be able to recover the excess interest rates that they had paid on the loan.
In some cases, they may also receive additional damages on top of those amounts, especially if negligence or other issues have been at play. The lender may be subject to further legal consequences, such as fines, a loss of business operating credentials, or even criminal consequences.
Do I Need a Lawyer for Assistance with Rent-A-Tribe Legal Conflicts?
Rent-a-tribe schemes are somewhat new, but they have already cost borrowers large amounts of money in excessive interest payments. Such schemes also undermine the various laws governing finance operations as well as state/tribal relations. Thus, legal authorities have great interests in detecting, identifying, and eradicating these types of schemes.
You may wish to hire a lawyer in your area if you suspect that any type of activity involves illegal rent-a-tribe arrangements. Your attorney can help you investigate the matter, and may also assist you with filing a lawsuit for any losses you may have experienced.
