Class Action Alleges Bright Lending, Montana Native American Tribe Behind High-Interest ‘Loansharking’ Enterprise

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A proposed class action alleges the company that does business as Bright Lending wrongfully holds itself out as owned and operated by a Native American tribe so as to charge borrowers exorbitant interest rates on relatively small loans. 

The 30-page lawsuit alleges Bright Lending, a payday lender purportedly owned and operated by the Montana-based Fort Belknap Indian Community, has unlawfully used what’s come to be known as the “rent-a-tribe” model to evade state prohibitions against usury loan schemes. 

Per the case, the tribal entity involved in these types of arrangements serves as the nominal lender for the purpose of allowing individuals or entities not affiliated with the tribe to dubiously claim loans are subject to only tribal law and not state usury protections, and that the lenders themselves are somehow protected from legal inquiry by the tribe’s sovereign immunity. 

“Federal law does not grant Native American tribes any special power to make loans over the internet to consumers across the United States in violation of state usury restrictions,” the complaint says.

The suit contends that the defendants have nonetheless “deliberately chosen to enter and facilitate the loansharking enterprise” alleged by the plaintiffs, two New Jersey consumers who say they’ve been required to repay more than $2,500 in finance charges in less than six weeks on loans totaling $550 or less. According to the case, New Jersey has in place a 16-percent cap on loan interest rates. 

As the lawsuit tells it, the Fort Belknap Indian Community of the Fort Belknap Reservation of Montana Tribe has been inviting and accepting rent-a-tribe partnerships with “the shadowy payday loan industry” using the LLC Island Mountain Development Group as the vehicle for these arrangements. According to the case, the tribe “has neither the financial resources, the expertise, nor the technology needed to operate a national, multi-million dollar lending enterprise,” and only a small portion of the profits from its arrangement with Bright Lending benefit the tribe at all. 

“Upon information and belief, a significant portion of the lending operations done under the name Bright Lending are operated by third parties that are not located on tribal lands,” the lawsuit claims. “These non-tribal outsiders supply all the lending capital and handle and control all or part of the marketing, underwriting, funding, risk assessment, compliance, customer complaints, accounting, lead generation, collections, and website management for the business.” 

As far as borrower disputes are concerned, Bright Lending claims that tribal law applies exclusively to all complaints, the suit says, and the lawsuit alleges the company’s dispute resolution procedure is “inherently unfair and crafted with the purpose of insulating the non-tribal principals from liability for their illegal conduct.” 

The case looks to cover all persons who obtained Bright Lending loans within the four years prior to the filing of this action, who, at the time the loan was made, were residents of any state other than Nevada or Utah, or the District of Columbia.

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