Bridge Lending “Rent-a-Tribe” High-Interest Loans Indiana Class Action

This class action involves two payday-loan-related companies purportedly owned and operated by a Native American tribe—Biboon, LLC, which does business as Bridge Lending Solutions, and LDF Holdings, LLC. The complaint alleges that these actually represent “rent-a-tribe” business arrangements intended to circumvent Indiana usury laws.

The Indiana Uniform Consumer Credit Code Class for this action is (1) all individuals with Indiana addresses (2) to whom a loan was made in the name of Biboon, LLC dba Bridge Lending Solutions at more than 36% interest (3) on or after July 11, 2020.

The RICO Class is (1) all individuals with Indiana addresses (2) to whom a loan was made in the name of Biboon, LLC dba Bridge Lending Solutions at more than 36% interest (3) where the loan was made on or after July 11, 2018.

Many states have limits on interest rates. The complaint says, “The Indiana Uniform Consumer Credit Code … establishes a maximum loan finance charge or 36% per annum for consumer loans other than supervised loans.” But certain loan companies have attempted to circumvent these usury laws by entering into agreements with Native American tribes who are not bound by these state laws on their own lands.

Both Bridge and LDF are purportedly owned by the Lac du Flambeau Band of Lake Superior Chippewa Native American tribe (the LDF tribe), which the complaint describes as “a small, isolated, and economically depressed Indian Tribe located in rural Wisconsin.”

The complaint alleges, “Lacking both capital and experience, and in desperate need of money, the tribe attempted to rent out one of its few remaining assets—its sovereign immunity—to non-tribal persons and entities who agreed to pay the LDF Tribe a small percentage of each loan as a fee or commission. The complaint claims that LDF made rent-a-tribe agreements with more than fifty different non-tribal investors. However, the complaint alleges that the tribe receives only from one to three percent of the revenue from these loans.

Bridge makes high-interest loans, such as the loan it made to the plaintiff in this case. In April 2022, Bridge lent her $300, then required a payment every fourteen days for nine months, resulting in a total repayment of $1,605, for an annual percentage rate of 824.97%.

The complaint alleges that the lending for such loans is not actually done by the tribe. First, it says, Bridge approves the loan. Then, “[e]lectronic documents were transmitted to a representative on LDF tribal soil in Wisconsin, who rubber-stamped approval for the loan while technically on the LDF Tribe’s reservation. The loans are then funded from bank accounts to which the tribe has no access, and the loans are serviced and collected by nontribal entities off the LDF Tribe’s reservation.”

The complaint alleges that such lenders are not actually tribal entities and that they “are not shielded by sovereign immunity.”

The complaint alleges violation of Indiana laws and of the Racketeer Influenced and Corrupt Organizations (RICO) Act.

Article Type: Lawsuit
Topic: Loans
Tags: Excessive Interest Rate, Payday Loans, Tribal Sovereignty Issue