Landmark Court Case Settled in Favor of Tribal Online Lenders

Source: Blue Earth Marketing

Louisville, Colorado—Fredericks Peebles & Morgan LLP, a national tribal law firm announced this week a victory in the state of California for two Tribal online lenders:  the Miami Tribe of Oklahoma and the Santee Sioux Nation of Nebraska.  The California Court of Appeals has affirmed the dismissal of a suit by the State of California against online lenders owned by the two federally recognized Indian tribes. The suit was an attempt by the State to shut down the sovereign Tribes’ online lending businesses and impose penalties for alleged failure to comply with the California laws governing short-term loans.

This case comes in the wake of a series of other states’ efforts to shut down various tribal lending operations around the country.  States have mounted campaigns to restrict and control tribal lending operations in their state even though federally recognized Indian Tribes are not subject to state laws in general and are regulated primarily through Federal Indian law.  This issue has gained widespread publicity around the country in the last several months.

This California case has now re-affirmed that federally recognized Indian Tribes are sovereign nations, not subject to state control.  The court decision will significantly impact other states and other Tribes throughout the country as the issue of tribal sovereignty has been under attack on many fronts over the last several years.

In this case, California claimed that loans made by the Tribes are not enforceable under California law because the Tribes are not licensed in California and the loan fees exceed California’s enforceable rates.  In a ruling issued on January 21, 2014 the Court of Appeals rebuffed the State’s claims, finding that the Tribes’ lending activities “are subject to tribal laws governing interest rates, loans and cash advance services,” and that California’s lending laws are not enforceable against the Tribal lenders.  The Court went on to find that “there can be little question” that the Tribally-owned lenders “function as arms of their respective tribes” and therefore are not subject to the jurisdiction of the State of California.

The Court observed that due to the relocation of these Tribes to remote and severely depressed regions, revenues from these loans are “essential to maintaining a functioning tribal government able to provide necessary services to the tribe’s members.”

The decision marks the second appellate court ruling in favor of these sovereign Tribal lenders in less than a month.  In December 2013, the Colorado Court of Appeals dismissed the State of Colorado’s appeal of the lower court’s nearly-identical finding that these sovereign Tribal lenders were arms of their respective Tribes and are not subject to that State’s jurisdiction.  In both the California and Colorado proceedings, the Courts affirmed the imposition of monetary sanctions against the respective states for their litigation misconduct committed during the course of the litigation.

The California Court of Appeals decision, California v MNE, Case No. B242644, may be found here.

The Miami Tribe of Oklahoma operates its sovereign lending business through MNE Services, Inc., a 100% tribally-owned subdivision and arm of the Miami Tribe. MNE Services, Inc., which is licensed and regulated by the Miami Tribe of Oklahoma, does business under the tradenames Ameriloan (; USFastCash (; United Cash Loans (; Advantage Cash Services (; and Star Cash Processing (

The Santee Sioux Nation operates its sovereign lending business through SFS, Inc., a 100% tribally-owned subdivision and arm of the Santee Sioux Nation.  SFS, Inc., which is licensed and regulated by the Santee Sioux Nation, does business using the trade name OneClickCash (

The tribal lenders were represented in both appeals by Fredericks, Peebles & Morgan, LLPFredericks Peebles & Morgan LLP is dedicated to the representation of American Indian tribes and Native American organizations throughout the United States. Legal services provided by Fredericks Peebles & Morgan LLP include a wide spectrum of services related to Indian concerns in the areas of business transactions, litigation, and governmental affairs.  For more information on the firm, please visit their website at