One of the political issues you will not hear during the 2016 U.S. Presidential race is that of Native American lending. The question is will there be a more friendly climate in Washington, D.C. when the new president is inaugurated? There is a pretty obvious answer if the Oval Office goes to either Hillary Clinton or Bernie Sanders. Both of those candidates, and especially Bernie, would be much more likely to push Congress and/or the U.S. Supreme Court to take an aggressive stance toward the 400 plus tribal lending companies that are currently in business.
The more interesting question is what would a Donald Trump presidency look like and how would they approach the sovereignty of the tribal nations as they conduct themselves as online lenders? My personal opinion, which I believe is backed-up and well documented by Trump's business history, is that Trump as U.S. President would have a very "hands off" approach to the tribal lenders. The reality is a Libertarian minded president is exactly what the tribes need at this juncture. Several state governments and elements of the U.S. Government have been pushing tribal lenders to take actions, especially in regards to the extreme interest rates they charge. For instance some states are mandating a maximum interest rate with rates such as a 40% APR or 36% APR which is far below the "normal" tribal rate of somewhere in the neighborhood of 780% APR.
The tribes maintain that these are unsecured loans (which means there is little they can do if the borrower does not follow through by repaying the debt) and their business model is imperiled if they are not free to charge the much higher rates.
Another element that states are pushing is monitoring current short-term loan consumers to make sure they do not get multiple loans at the same time. This is especially true in the state of Illinois which has contracted with a third party information vendor to help them keep track of how many loans a borrower has outstanding and to prevent that consumer from taking any new loans until the first debt is fully paid off.
All of these measures, while designed to help consumers and having the best intentions for citizens, are quite a bit of government reach into the private sector. And this is even more true when we consider that Native American lenders are exempt from state and federal regulations.
With Donald Trump as U.S. President you have to believe that he would act in a 'hands off' manner. He has already stated that he is big on states making decisions rather than the U.S. Government and you can see that in his constant attack on the common core of capabilities which is a federal approach to charting public school results. Trump wants the federal level of government to keep out of the business of what he sees as local decisions. We can deduce that he will almost certainly take the same approach towards the federal recognized sovereignty of the Native American tribes.
What federal power (that is coded anywhere into law) indicates that the federal (or state) government has the ability to make laws, rules or regulations governing their decision on how to loan money? There is no preclusion for interest rates or for the type of loans that are issued, so rather than create new law (that by the way is designed to protect consumers) Trump would most likely say that the decisions of the federally observed tribes is up to them, and that the creation of any kind of rule for them would not be appropriate or legal.
On a wider view this is also the tact that most any Republican candidate would take. Cruz and Rubio have very pro-business views on the economy and they would say that if consumers are willing to pay the high rates then this is the rate that should be charged. In general the conservative base of the country is very concerned to leave business alone, and in this case there is the added component of nationhood for these recognized tribal organizations. Based on all this we can tell pretty easily who the Native American lenders will be voting for this year. Republicans can undoubtedly count on the support of the owners and managers of tribal loan companies.
Guess Trump wasn't too helpful or harmful he just did next to nothing for Native Americans.
Posted by: Lakota Anonymous | 03/18/2021 at 10:51 AM