Investigators Charge Some Payday Lenders Avoid Consumer Laws
The ongoing battle between payday lenders and their critics, including credit unions, has taken another twist as investigators have revealed another strategy some payday lenders are using to avoid consumer laws.
An investigation conducted by the Center for Public Integrity, a non-profit investigative journalism center, has charged that at least one payday lender has partnered with Native American nations to avoid state consumer protection regulations.
The investigation, which the Center conducted with CBS News, focuses on John Tucker, an auto racing entrepreneur and accuses him of financing his operations with payday lending, sometimes in states where it is illegal. Additionally, investigators say he has partnered with Native American nations because they are considered sovereign and not subject to state laws.
Investigators alleged Tucker’s payday lending businesses are now owned by the Miami and Modoc tribes of Oklahoma as well as the Santee Sioux of Nebraska. But investigators said in court and public records they found evidence that Tucker secretly runs the payday lending business from offices in Kansas.
One Native American organization, which he said owns one of the businesses, acknowledged Tucker was an employee. Tucker declined comment as did other nations.