Fast Loans Hit Class Action Against High-Interest Loan Program “Rent-a-Tribe”

Fast Day Loans is facing a proposed class action lawsuit that claims the payday lender violated Indiana law by providing high-interest loans to residents of the state while claiming to be shielded from liability by the sovereign immunity of a Native American tribe.

The 17-page lawsuit alleges defendants – WLCC Lending FLD (doing business as Fast Day Loans); Lake Wakpamni Community Society; Wakpamni Lake Community Corporation II (doing business as WLCC II); and three people – set up what is now called a “rent-a-tribe” system.

According to the lawsuit, these types of operations involve a payday lender claiming to be operated by a Native American tribe — in this case, the Oglala Sioux tribe — in order to take advantage of the group’s tribal immunity. In reality, according to the lawsuit, the lender pays the tribe only a small percentage of its revenue in exchange for the use of its name, while being entirely funded and operated by non-tribal members.

The lawsuit claims that the defendants are not, in fact, a “legitimate arm of the tribe” and instead acted “contrary to the wishes of the tribal authorities”. The lawsuit alleges that when two of the individual defendants approached the Oglala Sioux Tribe’s economic development office with a proposal to enter into a high-interest consumer loan business, the tribe refused to do so. It was only after this event that the individuals formed WLCC and WLCC II, the case relays.

According to the complaint, since Fast Day Loans’ operations were conducted on non-tribal lands, including Utah, Texas, Canada and Belize, by non-tribal entities and individuals and did not provide any benefit to the Oglala Sioux Tribe, the Lender is not protected from liability under the Tribe’s Sovereign Immunity.

“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 Fast Day Loans nonetheless provided loans to Indiana residents at over 700% interest and in violation of state usury laws.

The lawsuit seeks to represent anyone with an address in Indiana who was issued a loan in the name of Fast Day Loans at more than 36% interest on or after the date two years before the lawsuit was filed ( April 19, 2022), or on or after a date four years before the filing of the complaint.

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