NAFSA Submits Amicus Brief in Key Tribal Lending Case Now in Federal Court

NAFSA supports tribal lender’s motion to dismiss in Golden Valley Lending, et. Al. v. CFPB

On October 31, The Native American Financial Services Association (NAFSA) submitted an Amicus Curiae brief to the U.S. District Court for the District of Kansas in support of four tribal lending entities’ (TLEs) motion to dismiss charges brought by the Consumer Financial Protection Bureau (CFPB). The TLEs are owned and operated by the Habematolel Pomo of Upper Lake Indian Tribe, based in California. Though the Upper Lake tribe is not a member of NAFSA, the CFPB’s actions against the tribe and its TLEs could have serious ramifications for all tribal lending entities. Dismissing the case would send a strong message that the CFPB cannot ignore tribal sovereignty in the pursuit of regulatory action.

 “The Upper Lake Tribe’s case against the Consumer Financial Protection Bureau is important for everyone and every organization that cares about tribal sovereignty and economic self-determination,” said NAFSA Executive Director Gary Davis. “NAFSA is proud to support the Habematolel Pomo of Upper Lake and its TLEs as they seek to ensure the rule of law still applies to Indian Country, and all tribes are able to pursue economic development strategies that will benefit their members and communities.”

The CFPB argues that the TLE’s refusal to procure state licenses or adhere to state interest rate caps – both unnecessary due to the sovereign status of the tribe and its economic subdivision lending operations – constitutes an unfair and abusive act or practice under the Consumer Financial Protection Act. This ignores the TLEs sovereign status as an economic arm of the tribe, but also ignores the very law that created the CFPB; the Consumer Financial Protection Act explicitly bars the establishment of limits on loan rates.

From the brief:

“The federal government and federal courts have repeatedly upheld the unique ability of Tribes to engage in commercial-governmental activity and the federal obligation to respect and protect that right. This case is important because its tests whether a rogue agency, in absence of specific Congressional direction and consumed with a singular, unrelated mission, can unilaterally override this well-recognized federal responsibility to American Indians.”

You can view the full brief below.