‘Rent-a-Tribe’ Class Action Lawsuit Alleges Fineday Funds Issued Predatory Loans

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Fineday Funds faces a proposed class action lawsuit out of Georgia that claims the online payday lender has issued loans with interest rates that far exceed the maximum rate permitted by state law.

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The 48-page lawsuit says the company behind Fineday Funds, Eagle Lending, LLC, has attempted to bypass state interest rate caps by claiming to be owned and operated by the Menominee Indian Tribe of Wisconsin, which would entitle it to the Native American tribe’s sovereign immunity. In reality, Fineday Funds is run by non-tribal members, and most of its lending operations are performed outside tribal lands, the case alleges.

This practice has come to be known as a “rent-a-tribe” scheme, where non-tribal payday lenders pay a portion of their profits to a small Native American tribe to use its name when issuing predatory loans to consumers, the filing explains.

According to the complaint, Georgia law prohibits unlicensed lenders such as Fineday Funds from making loans of $3,000 or less at interest rates exceeding eight percent. The plaintiff, an Atlanta resident, claims she took out a $1,400 loan from the company last year with an annual percentage rate of over 617 percent—about 77 times over the legal limit, the suit notes. The plaintiff ended up paying over $5,300 in finance charges over nine months in addition to the original $1,400 loan, the case says.

The suit charges that Fineday Funds, owner Wolf River Development Company, Wolf River CEO Crystal Chapman-Chevalier and nine members of the Menominee Tribe’s legislature have conspired to repeatedly violate state lending statutes and federal racketeering law. Per the filing, Fineday Funds has likely collected tens of millions of dollars issuing these allegedly illegal loans, which the case argues should be deemed void and unenforceable.

“The Fineday lending enterprise is just another example of a rent-a-tribe scheme designed to circumvent state usury regulation while taking advantage of vulnerable consumers who are in such dire circumstances that they are willing to accept triple-digit interest rates on relatively small sums just to pay their bills,” the case contends.

The lawsuit looks to represent anyone who, within the past four years, obtained loans from any Menominee Indian Tribe of Wisconsin (MITW) lending entity, such as Fineday Funds, Five Clans or Four Directions, was a resident of any state other than Nevada or Utah at the time the loan was made, and made payments on such loans in an amount in excess of the amount of loan proceeds they received.

The suit also seeks to cover anyone who was living in Georgia when they entered into a loan agreement with Fineday Funds, Five Clans, Four Directions or any other MITW lending entity.

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