Arrowhead Advance Operates Illegal ‘Rent-a-Tribe’ Lending Program, Alleges Class Action
Wakpamni Lake Community Corporation (WLCC) and several related entities provided small loan sharking to Illinois residents under the name Arrowhead Advance while trying to hide behind the sovereign immunity of the Oglala Sioux tribe, according to a proposed class action.
The 19-page lawsuit alleges defendants, which include WLCC Lending FDL (doing business as First Day Loans); Lake Wakpamni Community Society; Wakpamni Lake Community Corporation II (doing business as WLCC II); and three people – are behind what is now called a “rent-a-tribe” project. According to the lawsuit, this type of arrangement involves a payday lender that claims to be operated by a Native American tribe and claims to be protected from liability by tribal immunity.
The case alleges, however, that the defendants do not operate as a legitimate arm of the Oglala Sioux Tribe given that their lending business is not funded or operated by or beneficial to the tribe. According to the prosecution, the defendant’s loan operations are conducted off tribal lands and against the wishes of tribal authorities.
“Where non-tribal individuals and entities control and manage the substantial lending functions, provide the loan capital necessary to support the operation, and bear the economic risk associated with the operation, they are in effect not being ‘exploited’ by Native American tribes and, therefore, are not protected by sovereign immunity,” the complaint argues.
The lawsuit alleges that Wakpamni Lake Community Corporation and its co-defendants violated Illinois law by charging interest rates greater than 600% on small loans without having a license to do so or a charter from a bank or credit union.
According to the case, two of the individual defendants initially petitioned the Oglala Sioux Tribe’s economic development office to enter into a business agreement whereby the individuals would operate a high-interest internet lending business. According to the complaint, the tribe’s economic development office declined the offer, and the individuals subsequently formed WLCC and WLCC II.
The lawsuit claims that many of the defendants’ lending operations — such as lead generation, marketing, funding, underwriting, payment processing and collections — are conducted in locations other than tribal lands, including in the Utah, Texas, Canada and Belize.
According to the filing, no members of the Oglala Sioux Tribe are involved in the defendants’ day-to-day operations, which are said to be carried out under a long list of aliases, including Arrowhead Advance, Fast Day Loans, Bison Green Lending, Explore Credit, Fox Hills Cash , Good Loans First, Rapid Loan, Title Loan First, MyBackWallet, TheGanEdenGroup.com, Checkadvanceusa.net, Consumer First Credit, Green Circle Lending, Rolling Plains Cash, Cash on Cloud 9, Easy Cash Online Store, BaysideCash. com, Whisper Rock, BeachsideCash.com, Blvdcash.com, Fast Money Store, FiresideCash.com, Seaside Dollar, SeasidePayday.com, Merit Financial Trust and Ocean Park Funding.
Although the defendants claim to be entitled to sovereign immunity from the Oglala Sioux Tribe and therefore would have no liability under Illinois usury laws, they are not a tribal society that functions as an “arm of the tribe,” according to the lawsuit. The lawsuit says the Oglala Tribe receives no benefit from the defendants’ operations, and WLCC and WLCC II receive “a small commission” for each loan, according to the complaint.
The lawsuit explains that Illinois law prohibits entities that do not have a bank or credit union charter or a consumer lending license issued by the State Department of Financial and Professional Regulation of grant loans at more than 9% interest. According to the lawsuit, the defendants made loans at more than 600% interest without having a bank or credit union charter or being duly licensed.
The lawsuit seeks to represent anyone with an address in Illinois to whom a loan has been made in the name of WLCC II, doing business as Arrowhead Advance, and:
- The loan was made at more than nine percent interest and has not been fully repaid;
- The loan was made at more than nine percent interest and is still outstanding or has been repaid within the past two years;
- The loan was granted at more than 36% interest on or after March 23, 2021; or
- The loan has been made at over nine percent interest for the past four years.
The full complaint can be read below.
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