By Seth Richardson
Colorado Attorney General John Suthers is on the warpath against abuses of Colorado’s payday lending law by companies claiming to be “protected” by the sovereign status of the Indian Nations. In a story in the Sunday, February 11, 2011 edition of the Denver Post, “Hiding behind a tribe,” reporter Alicia Caldwell describes how non-Indian out-of-state payday lenders are hiding behind two Indian tribes to evade Colorado’s new, and strict payday lending laws.
Members of the Santee Sioux and Oklahoma Miami Indian Nations are trying to give legal cover to several payday lending companies by claiming that the non-Indian businesses are “arms” of the “sovereign” Indian Nations.
This is not really anything new, casino gambling corporations have been camping out on Indian lands for decades now. But the payday lending scheme is different because the transactions don’t take place on Indian lands, they take place in cyberspace.
Suthers’ complaint has been wending its way through the courts, and the Colorado Supreme Court returned the matter to the trial court for more proceedings. Suthers is rightfully afraid that if loose associations with Indian tribes is sufficient to endow tribal sovereignty on any commercial business, the tribes will likely become “rent-a-tribes” allowing non-Indian businesses to escape state regulations. That cannot be permitted.
This is no idle threat. Federal law regarding the regulation of the Indian tribes is pretty exclusively vested in the Congress, although the states have won some ability to control Indian activities in places. Indian nations across the US use their state tax exempt status to sell everything from gasoline to cigarettes at prices far under what off-reservation commercial enterprises can.
Fair enough, if the transaction takes place on the reservation.
But the difference here is that the transaction does not take place “on the reservation,” it takes place, essentially, at the consumer’s home, on his computer. What the businesses, and the tribes want is to have their cake and eat it too. They want access to off-reservation markets and consumers without having to comply with off-reservation laws and regulations.
Sorry, not buying any today.
Because the transactions are not taking place solely on the reservation, they shouldn’t be subject to sovereign immunity…unless the Indians want FULL sovereign immunity.
And that would involve reservation border stations, immigration and customs inspection, trade and tariff agreements and other common international diplomatic and legal obstacles to unfettered trade.
It’s illegal, for example, for a payday lender in Mexico to solicit business in Colorado without complying with our laws, so why should Indian Nations be any different?
Short of making the Indian Nations fully sovereign, with all the diplomatic consequences thereof, there’s another way to quash this fraudulent scheme to evade our state laws.
The legislature should pass a law saying that no contract entered into with any Indian, Indian Nation, or company ostensibly owned by or protected by an Indian Nation’s sovereign status, can be legally enforced in any way outside of the boundaries of reservation property. Access to Colorado’s civil courts should be denied for contract disputes with Indian Nation-based businesses.
Colorado is under no obligation to enforce private contracts made with the Indian Tribes, particularly if the tribes are going to use their sovereign status to evade Colorado law.
If the Indian Nations want to enforce contracts they have entered into in violation of our laws, by claiming sovereign status, they will have to induce the parties to come to the reservation in order to serve them with legal process, and they will have to adjudicate the dispute on the reservation. If that means they can’t get a debtor to come to the reservation for trial, and they can’t get the Colorado courts to enforce a judgment, it’s just their tough luck. The same rules should be applied to gambling debts as well.
That’s what it really means to be a “sovereign nation.”
Payday borrowers should borrow whatever they can from tribally-protected payday lenders, and then stiff the lenders and the tribes, while making sure never to enter tribal reservations.
If the lender takes them to civil court anywhere outside the reservation, the borrower should simply claim the sovereign immunity of their status as a non-tribe-member citizen of the United States as justification for repudiating the debt.
If the payday lenders want sovereign tribal protection, they can get by with sovereign tribal enforcement, which should not be valid or enforceable anywhere but on their reservation.
© 2011 Altnews