Crane Finance “Rent-a-Tribe” Predatory Lending Indiana Class Action

Crane Lending, LLC does business as Crane Finance, making loans at high rates of interest. The complaint brings suit against Crane, the individual Jennifer Peters, and Wolf River Development, alleging that Crane is a predatory lender that uses a rent-a-tribe scheme to circumvent Indiana laws capping interest rates on consumer loans.

The class for this action is (1) all individuals with Indiana addresses (2) to whom a loan was made in the name of Crane Lending or Crane Finance at more than 72% interest (i.e., all of Crane’s loans) (3) where the loan was made on or after July 29, 2018.

The plaintiff in this case, Caitlin Knotts, took out an online installment loan with Crane in April 2022, for personal, family, or household purposes. The amount was a little over $255 and the annual percentage rate was 733.66%. Knotts lives in Indiana, the loan proceeds were sent to her bank in Indiana, and the complaint alleges that the loan is governed by the laws of Indiana.

The complaint alleges that the Indiana Uniform Consumer Credit Code sets a limit on loan finance charges of 36% per year. Even the state’s provisions for small loans, the complaint alleges, do not authorize rates of 733%.

Crane, which makes loans online, claims to be owned and controlled by a federally-recognized Indian tribe, the Menominee Tribe, which has an address in Wisconsin. The Wolf River Development Company’s activities supposedly include making high-interest loans, and the tribe supposedly owns a number of high-interest lending entities.

But the complaint alleges, “On information and belief, [the] vast majority of the economic benefit of the activities of Crane Lending, LLC d/b/a Crane Finance is received by non-Native American persons.” The complaint also alleges that the company’s lending activities are not conducted on tribal lands, nor are its lead generation, marketing, funding, underwriting, payment processing, or collection. Therefore, the complaint claims, the lending does not occur on tribal lands.

The complaint claims, “The place where a consumer is located when he or she submits an application via an online portal with a Native American tribe determines where the transaction takes place for jurisdictional purposes[,]” citing an earlier court case’s findings on jurisdiction.

The complaint describes rent-a-tribe operations in general, claiming, “In exchange for use of the tribe’s name, the beneficial owner of the payday lending scheme pays the cooperating tribe a fraction of the revenues generated.” Different schemes offer different percentages, the complaint claims, but “the number is almost always in the single digits.”

But to legitimately take advantage of sovereign immunity, the complaint says, “an entity must function as a legitimate ‘arm of the tribe’…” A framework has been developed to make this determination through earlier cases, the complaint alleges.

“These so-called ‘tribal lenders’ do not survive scrutiny when examined closely,” the complaint contends, “since virtually all business functions occur far from tribal land, by nontribal members, and overwhelmingly benefit non-tribal members to such a degree that tribal involvement is effectively nil.”

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