AvailBlue.com Operates Illegal ‘Rent-A-Tribe’ Payday Loan Scheme, Class Action Alleges

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The entities behind AvailBlue.com face a proposed class action over an alleged “rent-a-tribe” scheme whereby the online lender has supposedly issued to Illinois residents payday loans with unlawfully high interest rates.

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The 22-page lawsuit says that defendants Anong LLC—which does business as AvailBlue—and parent company LDF Holdings, LLC claim to be owned by the federally recognized Lac du Flambeau (LDF) Band of Lake Superior Chippewa Indians, a small Native American tribe based in rural Wisconsin. However, the suit alleges that the companies are, in fact, “fraudulently hiding behind tribal sovereign immunity” in order to duck state usury laws.

Under state law, AvailBlue is prohibited from making loans to Illinois consumers at interest rates that exceed nine percent, as it has never held a bank or credit union charter or been issued a lending license by the Illinois Department of Financial and Professional Regulation, the filing relays.

Nevertheless, the online lender has extended loans to consumers at interest rates that exceed 500 percent, the complaint contends.

As the suit tells it, the “tribal lending entity is simply a facade for an illegal lending scheme” whereby the non-tribal lenders pay just a fraction of the revenues to the cooperating tribe in exchange for the use of their name.

The case also names as defendants LDF Holdings president Jessi Lee Phillips Lorenzo and two AvailBlue affiliates, Mark Koetting and Mainspring Management, LLC. Mainspring executive Rick A. Gwynne II is also included in the lawsuit.

The lawsuit looks to represent:

“(a) [All] individuals with Illinois addresses (b) to whom Defendants made loans at more than 36% interest (c) which loans are still outstanding or have been outstanding at any time during the 3 years prior to the filing of this action;”

“(a) [All] individuals with Illinois addresses (b) to whom Defendants made loans at more than 9% interest (c) which loans are still outstanding, or were outstanding on a date more than two years prior to the filing of this action;” and

“(a) [All] persons (b) with Illinois addresses, as shown by the loan documents, (c) to whom a loan was made in the name of Avail Blue (d) which loan was made on or after a date four years prior to the filing of suit.”

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