The facts and legal interpretations in this case, where the 4th Circuit found that the business structure of Big Picture Loans was protected by the tribal sovereign immunity of the Lac Vieux Desert Band of the Lake Superior Chippewa Indians, are not particularly pertinent to bankruptcy or consumer rights issues that are the focus of this blog.
The impact of this decision, which will allowed expanded on-line pay-day loans to consumers throughout the 4th Circuit. As these were, before the “brick and mortar” versions were expelled from North Carolina, often the last debts before consumers were driven into bankruptcy, it seems likely that we will be seeing these in greater numbers in cases soon.
What has also always seemed like a lack of vision, however, is that tribal entities have not played both sides of the street on credit matters. Just as tribal sovereign immunity allows lending on terms that would be illegal in a state, so too could tribes offer “on reservation” bank accounts that were exempt from execution by creditors, just like foreign “off shore” accounts. It would seem likely, in fact, that tribal bankers could become the depositories of choice for marijuana businesses, which are otherwise precluded from using regular banks.
For a copy of the opinion, please see: