Wisconsin Tribe Faces Lawsuit Over High-Interest Loans

The Lac du Flambeau tribe has reached a significant $1 billion class-action settlement following allegations of predatory lending practices linked to its high-interest online loan operations. The tribe, based in Wisconsin, has been accused of exploiting its sovereign rights to circumvent state interest rate caps, allowing it to charge exorbitant rates, sometimes as high as 600%. The loans, marketed under various catchy names, were part of a larger operation controlled by the tribe, which has faced scrutiny for its lending practices. Court documents reveal that tribal leaders have agreed to pay $37.4 million to consumers and their legal representatives as part of the settlement stemming from a 2020 federal lawsuit filed in Virginia. Despite the settlement, LDF officials maintain their innocence, asserting that they adhere to high industry standards and comply with both tribal and federal regulations. The tribe's president emphasized that their sovereign status exempts them from state lending laws. The lawsuit alleges that the tribe's governing council delegated daily operations to non-tribal members, raising concerns about the legitimacy of their lending practices. Critics argue that the tribe's partnerships exploit sovereign immunity to conduct loans that would otherwise be illegal. The settlement includes a substantial $20 million contribution from unnamed non-tribal individuals and entities associated with LDF’s Loan at Last, the company involved in the case. As the details of the tribe's business operations remain largely undisclosed, the settlement marks a pivotal moment in the ongoing debate over the intersection of tribal sovereignty and consumer protection in the lending industry.