Native tribes and organizations: recent CFPB action could set dangerous precedent for tribally owned businesses, tribal sovereignty

Tribes and Native organizations join forces in letter to CFPB expressing concern about recent consent order

November 16, 2017

WASHINGTON, DC – A recent Consumer Financial Protection Bureau (CFPB) action is deeply troubling for tribal sovereignty and tribal economic development, according to The Native American Financial Services Association (NAFSA) and a wide array of American Indian and Alaska Native organizations and tribes. The group recently sent a letter to CFPB Director Richard Cordray expressing their concerns and requesting clarification regarding sweeping language used in a September consent order entered into with a non-Native owned loan lead generator that the CFPB had deemed to be in violation of the Bureau’s regulations. The letter was sent before Director Cordray announced that he plans to resign his post before the end of November.

Though it does not pertain to a specific tribe, tribally owned business, or member of NAFSA, the consent order nevertheless barred the company from working with any entity that “may take into consideration any contention that state or federal law is inapplicable, or that lenders are not subject to state or federal law, because of lender sovereignty or a lender’s foreign, offshore, or tribal status or affiliation, or because of choice of foreign or tribal law.”

The language suggests that state law should apply to the conduct of a federally recognized tribal nation, and that the CFPB questions the validity of tribal sovereignty generally. Absent more precise language to further clarify the CFPB’s position, such assertions stand in direct opposition of long standing federal Indian law and policy. The federal government has clearly limited the intrusive encroachment of state law within tribal borders and has repeatedly affirmed tribal sovereignty.

“NAFSA and the other signatories on our joint letter have deep concerns about what the CFPB’s recent consent order means not only for Indian Country, but also for businesses seeking opportunities to work and partner with tribes,” said Gary Davis, Executive Director of NAFSA. “Is this language becoming boilerplate for CFPB consent orders or other regulatory actions? Will businesses be targeted by the CFPB for entering into relationships with tribes? Is the CFPB implying that tribal sovereignty is no longer a legal consideration? These are just a few of the troubling questions created by this consent order that we feel need to be answered by the CFPB.”

“While the Navajo Nation, among other sovereigns, certainly understands and supports the Consumer Financial Protection Bureau’s charge to protect American consumers we find the recent action to be an affront to tribal sovereignty and counter to federal law and policy,” said Russell Begaye, President of the Navajo Nation. “By completely disregarding tribal law, the CFPB is harming Tribes’ rights to regulate commerce originating from our own lands. This could undermine our ability to provide protections and accountability for our own people and economies. We must have clarification on the language and cannot state strongly enough our opposition to further tying the hands of Indian Tribal sovereigns in the realm of economic development.”

The letter, which can be found by clicking here, requests clarification regarding the language and an opportunity for the signatories to meet with the Director or senior CFPB staff to offer guidance and insight regarding Indian Country and federal Indian law and policy.

In addition to the Native American Financial Services Association, signatories include:

Alaska Federation of Natives

Chippewa Cree Tribe

Coalition of Large Tribes

Guidiville Indian Rancheria

Habematolel Pomo of Upper Lake

Lac Courte Oreilles Tribe

Mandan, Hidatsa, and Arikara Nation

National Center for American Indian Enterprise Development

National Congress of American Indians

Native American Contractors Association

Native American Finance Officers Association

Native American Rights Fund

Navajo Nation

Otoe-Missouria Tribe

Formed in 2012, NAFSA is a 501(c)6 trade association located in Washington, D.C that advocates for tribal sovereignty, responsible financial services, and better economic opportunities in Indian Country.