Sen. Jeff Merkley is looking to crack down on payday lenders taking their business online.

But his effort could be complicated by a group of Native American lenders who are crying foul over the measure and say it intrudes on tribal sovereignty.

Earlier this week, Merkley (D-Ore.) along with Sens. Tom Udall (D-N.M.) and Democratic Whip Dick Durbin (D-Ill.) unveiled a measure aimed at trimming loopholes that have emerged as payday loans made over the Internet have grown in the last decade.

Under the bill, online lenders, including those based offshore or affiliated with tribes, would have to play by the rules established by the state where the borrower resides, not where the business is established. It also would hand more power to the Consumer Financial Protection Bureau (CFPB), allowing it to shut down the payment processing systems for lenders that use online lending to violate state or other lending laws, but otherwise avoid enforcement.

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