Supreme Court Denies Cert in Tribal Lenders’ CID Case with CFPB
Earlier today the Supreme Court announced it would not be hearing a case between two tribal lending entities (TLEs) and the Consumer Financial Protection Bureau (CFPB) regarding the agency’s authority to issue civil investigative demands against the tribes. The question before the Supreme Court in the TLEs’ petition was “whether a generally applicable federal statute, which is silent as to its applicability to Indian Tribes, should nevertheless be presumed to apply to Tribes.”
The TLEs, Great Plains Lending and Plain Green, had hoped the Supreme Court would settle a split in the federal circuits over the applicability of general federal statutes to tribes and their sovereign arms. The refusal by the Supreme Court to hear the case means that the tribes will now be subject to the CID authority of the CFPB under the Consumer Financial Protection Act (CFPA) of 2010.
The CFPB originally issued CIDs for three tribal lending enterprises (“TLEs”) formed by the Chippewa Cree, Tunica-Biloxi, and Otoe Missouria tribes to determine potential violations under multiple federal laws for advertising, marketing, provision, and collection of small-dollar loan products. Tunica-Biloxi would later settle with the CFPB and did not participate in the petition to the Supreme Court.
The tribes directed their TLEs not to comply with the CIDs. The tribes’ position was that the CFPB had no jurisdiction to issue the CIDs because the CFPA’s definition of “State” specifically includes Native American Tribes. The tribes argued that since States are explicitly exempt from enforcement of the CFPA, it also does not apply to Tribes. Although not germane to the decision, the Court also mentioned that despite the Tribes’ stated position, they offered to cooperate with the CFPB as “co-regulators” of the TLEs. The CFPB declined that offer.
Following rejection of the Tribes’ petition in the CFPB’s agency appeal process, the CFPB brought suit in federal district court to enforce the CIDs. The district court ruled in the CFPB’s favor, finding that that the CFPA was a law of general applicability and Tribes and their TLEs were subject to the CFPB’s investigative demands. The Tribes appealed that decision to the Ninth Circuit Court of Appeals and ultimately the Supreme Court.
NAFSA, along with attorneys general from 3 states, filed amicus briefs with the Supreme Court in support of the TLEs’ petition.
In sum, the circuit court’s decision will now govern the CFPB’s CID authority with tribes in the Ninth Circuit. However, while the actual holding of this case is specific to that issue, the opinion issued by the Court contains a significant amount of dicta that could easily be persuasive to other courts (and certainly the Ninth Circuit) to extend this logic in a subsequent case to hold that tribes are in fact fully subject to the CFPA.
