By: Javi Calderon
Native American-Affiliated Lenders Draw Government Attention
While the majority of doctors are friendly and caring, not all are. Just like not all restaurants offer quality food, while many do. In the first week of April, the Federal Trade Commission reminded us that not all payday loan lenders are honest. These types of lenders unfortunately sully the reputations of the majority of payday lenders that are consumer-friendly businesses.
The news that the FTC is suing a group of cash advance lenders that have teamed up with Native American tribes in order to circumvent state laws, should serve as a wakeup call to consumers – Don’t trust just anybody who is offering you money. A healthy bit of old fashioned American paranoia is a good thing before making financial decisions.
The best way to be confident that the company you choose to work with really has fair policies and procedures is to find a company that is a member of a trade association like CFSA or FISCA.
The Community Financial Services Association of America and the Financial Service Centers of America are groups that offer membership to non-traditional lenders that adhere to their high standards of business etiquette. Member companies gain instant credibility, thus improving their profits, by displaying their trade association’s good, reliable name; in exchange, they must maintain high standards of customer care and fair practices or risk losing their membership.
CFSA and FISCA also publish codes of conduct for their members, and they offer customers of their members access to payment plans and dispute settlement. They also offer customers avenues for filing complaints.
In the FTC lawsuit, over 7,500 complaints had been filed concerning Native American payday lenders in Colorado. These devious lenders had struck up deals with native tribes in order to take advantage of their tribal immunity. So far, little is known about the terms of their agreements, but under tribal immunity, Native American businesses are exempt from government oversight.
Even though many of these lenders are owned by non-natives, up until now the status quo in the judicial branch has been to uphold their tribal immunity. The FTC has now made it clear that even tribal-affiliated payday advance businesses will be held to state and federal laws.
In order to avoid abusive or dishonest practices by a short-term loan lender, make sure to find a company that is a member of a trade association.