Arrowhead Advance Operates Illegal ‘Rent-a-Tribe’ Lending Scheme, Class Action Alleges

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Wakpamni Lake Community Corporation (WLCC) and several related entities have made usurious small loans to Illinois residents under the name Arrowhead Advance while attempting to hide behind the Oglala Sioux Tribe’s sovereign immunity, a proposed class action alleges.

The 19-page lawsuit alleges the defendants—who include WLCC Lending FDL (doing business as First Day Loans); Wakpamni Lake Community Corporation; Wakpamni Lake Community Corporation II (doing business as WLCC II); and three individuals—are behind what’s come to be known as a “rent-a-tribe” scheme. According to the suit, this type of arrangement involves a payday lender who purports to be operated by a Native American tribe and claims to be shielded from liability by tribal immunity.

The case alleges, however, that the defendants do not function as a legitimate arm of the Oglala Sioux Tribe given their lending business is not funded or operated by or beneficial to the tribe. According to the suit, the defendant’s lending operations are conducted off tribal lands and against the wishes of tribal authorities.

“Where non-tribal individuals and entities control and manage the substantive lending functions, provide the lending capital necessary to support the operation, and bear the economic risk associated with the operation, they are not in fact ‘operated’ by Native American tribes and, therefore, are not shielded by sovereign immunity,” the complaint argues.

The lawsuit alleges Wakpamni Lake Community Corporation and its co-defendants have violated Illinois law by charging interest rates in excess of 600 percent on small loans without having a license to do so or a bank or credit union charter.

According to the case, two of the individual defendants initially asked the Oglala Sioux Tribe’s economic development office to enter into a business arrangement whereby the individuals would operate a high-interest lending business over the internet. Per the complaint, the tribe’s economic development office declined the offer, and the individuals later formed WLCC and WLCC II.

The lawsuit claims that many of the defendants’ lending operations—such as lead generation, marketing, funding, underwriting, payment processing and collection—are conducted in locations other than tribal lands, including in Utah, Texas, Canada and Belize. 

According to the filing, no member of the Oglala Sioux Tribe participates in the defendants’ day-to-day operations, which are allegedly performed under a laundry list of assumed names, including Arrowhead Advance, Fast Day Loans, Bison Green Lending, Explore Credit, Fox Hills Cash, Good Loans First, Rapid Loan, Title Loan First, MyBackWallet, TheGanEdenGroup.com, Checkadvanceusa.net, Consumer First Credit, Green Circle Lending, Rolling Plains Cash, Cash on Cloud 9, Easy Cash Online Store, BaysideCash.com, Whisper Rock, BeachsideCash.com, Blvdcash.com, Fast Money Store, FiresideCash.com, Seaside Dollar, SeasidePayday.com, Merit Financial Trust and Ocean Park Funding.

Although the defendants claim to be entitled to the Oglala Sioux Tribe’s sovereign immunity, and would thus have no liability under Illinois usury laws, they are not a tribal corporation that operates as an “arm of the tribe,” the lawsuit argues. The lawsuit says that the Oglala Tribe receives no benefit from the defendants’ operations, and WLCC and WLCC II receive “a small fee” for each loan, according to the complaint.

The suit explains that Illinois law prohibits entities who do not have a bank or credit union charter or a consumer lending license issued by the state’s Department of Financial and Professional Regulation from making loans at more than nine-percent interest. Per the lawsuit, the defendants have issued loans at more than 600 percent interest without having a bank or credit union charter or being properly licensed.

The lawsuit looks to represent anyone with an Illinois address to whom a loan was made in the name of WLCC II, doing business as Arrowhead Advance, and:

• The loan was made at more than nine-percent interest and has not been paid in full;
• The loan was made at more than nine-percent interest and is still outstanding or has been paid within the past two years;
• The loan was made at more than 36 percent interest on or after March 23, 2021; or
• The loan was made at more than nine-percent interest within the past four years.

The full complaint can be read below.

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