The primary defendant in this class action is Rosebud Lending LZO, doing business as ZocaLoans, which is supposedly an entity of the Rosebud Sioux Tribe that lends money. But the complaint alleges that it is part of a rent-a-tribe scheme, in which predatory lenders 777 Partners, LLC, Tactical Marketing Partners, LLC, and others engage in predatory lending while hiding behind the tribal sovereignty to evade Illinois lending laws.
In January 2020, the plaintiff in this case, Eido Hussam Al-Nahhas, took out a $350 loan from ZocaLoans. The annual percentage rate on this loan was 534.75%. Al-Nahhas paid the loan off, but he subsequently took out three more loans, in increasing amounts at similarly excessive rates of interest. He has not paid off the final loan, and ZocaLoans has been trying to collect it.
The complaint alleges, “At no time have [the ZocaLoans parties] had a license from the Illinois Department of Financial and Professional Regulation or a state or federal banking or credit union charter, entitling them to make loans to Illinois residents at more than 9% interest.”
ZocaLoans uses the address of the Rosebud Economic Development Corporation (REDCO), but the complaint alleges, “[o]n information and belief,” that there is no consumer lending business at that address. “On information and belief,” the complaint claims, “REDCO’s general manager, Mindi Jo Vavra…, was also an executive for Fintech Financial, LLC, a non-tribal, Delaware-based ‘warehouse lender’ which provides working capital to make loans to consumers for several payday lenders.”
According to the complaint, the same tribe has also had five other payday lender websites. It claims that these were also rent-a-tribe schemes with non-tribal investors.
The complaint claims that ZocaLoans gets its funding from Fintech and Tactical Marketing Partners. When a consumer applies for a loan, the complaint suggests, the information is sent to an employee of Rosebud Lending on the tribe’s reservation, who makes a “cursory, pro-forma review” and gives it “final” approval. This supposedly provides the tribal sovereignty origination, the complaint claims. However, the complaint alleges that the money for the loans is kept in bank accounts of 777 Partners and Tactical Marketing Partners, to which the tribe has no access.
On March 23, 2021, the complaint claims, the Illinois Predatory Loan Prevention Act “made it unlawful for anyone other than a bank to make loans to Illinois residents at annual percentage rates in excess of 36%.
The complaint claims that ZocaLoans is a rent-a-tribe scheme meant to circumvent state laws, and that the loans made by ZocaLoans are “null and void.”
Four classes have been defined for this complaint, one for each of the counts. The first is (a) all individuals with Illinois addresses (b) to whom a loan was made by Rosebud Lending LZO and ZocaLoans at more than 9% interest (c) which has not been paid in full. The others are similar and found under each count named in the complaint linked below.
Article Type: LawsuitTopic: Loans
Most Recent Case Event
ZocaLoans “Rent-a-Tribe” Predatory Lending Scheme Illinois Complaint
February 10, 2022
The primary defendant in this class action is Rosebud Lending LZO, doing business as ZocaLoans, which is supposedly an entity of the Rosebud Sioux Tribe that lends money. But the complaint alleges that it is part of a rent-a-tribe scheme, in which predatory lenders 777 Partners, LLC, Tactical Marketing Partners, LLC, and others engage in predatory lending while hiding behind the tribal sovereignty to evade Illinois lending laws.
ZocaLoans “Rent-a-Tribe” Predatory Lending Scheme Illinois ComplaintCase Event History
ZocaLoans “Rent-a-Tribe” Predatory Lending Scheme Illinois Complaint
February 10, 2022
The primary defendant in this class action is Rosebud Lending LZO, doing business as ZocaLoans, which is supposedly an entity of the Rosebud Sioux Tribe that lends money. But the complaint alleges that it is part of a rent-a-tribe scheme, in which predatory lenders 777 Partners, LLC, Tactical Marketing Partners, LLC, and others engage in predatory lending while hiding behind the tribal sovereignty to evade Illinois lending laws.
ZocaLoans “Rent-a-Tribe” Predatory Lending Scheme Illinois Complaint