FTC Expands Enforcement Action Against Tribe-Affiliated Payday Lenders

FTC Payday Lending

On March 7, the FTC announced the expansion of an existing enforcement action against several payday lending firms and their owner alleging that they sought to force borrowers throughout the country to travel to South Dakota to appear before a tribal court that did not have jurisdiction over their cases. The defendants are facing a number of claims relating to alleged attempts to garnish employees’ wages without appropriate court orders. The amended complaint adds allegations that the loan contracts issued by the defendants illegally state that the contracts are subject solely to the jurisdiction of the Cheyenne River Sioux Tribe. The defendants have brought suit in the tribal court against non-tribal members to obtain garnishment orders. The FTC contends that the tribal court does not have jurisdiction over claims against people who do not belong to the Cheyenne River Sioux Tribe and who do not reside on the reservation or elsewhere in South Dakota.