Big Picture Loans, Ascension Technologies Hit with Class Action in GA Over Alleged ‘Rent-a-Tribe’ Lending Scheme

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A proposed class action filed in Georgia federal court claims Big Picture Loans, LLC, Ascension Technologies, LLC, and two individuals with control of the companies have devised a payday lending scheme by which they exploit the tribal immunity of a Native American tribe to evade state usury laws. Referred to in the complaint as a “rent-a-tribe” scheme, this business model, according to the suit, allows the defendants, who claim to be operated by the Lac Vieux Desert Band of Lake Superior Chippewa Indians, to charge borrowers more than 500 percent interest on small loans while claiming they aren’t subject to Georgia’s interest caps.

In reality, the lawsuit alleges, the tribe is merely a front, allowing the defendants to use its name in exchange for a mere two percent of the business’s revenue. The defendant companies, not the tribe, control the operations of the business and are responsible for funding, underwriting, servicing, and collecting the loans, the case says. In fact, the complaint continues, many of the companies’ executives and employees are not affiliated with the tribe at all and aren’t located on the reservation.

Despite Georgia’s eight percent cap on annual interest rates from non-bank lenders, the defendants allegedly charged the plaintiffs 556.63 and 591.46 percent interest, respectively, on their small payday loans. Moreover, the lawsuit points out that the defendants are unlicensed to lend money in Georgia and have violated several of the state’s lending laws.