Lenders from Native American tribes have been illegally soliciting Connecticut residents for loans, according to officials with the Connecticut Department of Banking.
In addition to the solicitation, state leaders contend that the interest rates at which customers can borrow far exceed those allowed under state law.
"Any entity that does business in the state of Connecticut doesn’t have the right to charge our citizens 448 percent interest rates," Gov. Dannel Malloy said at a press conference Monday. "We wouldn’t allow the Swiss to do it. We wouldn’t all the French to do it. We wouldn’t allow the Germans to do it. We shouldn't allow anyone else to do it."
Great Plains Lending is one lender under fire from state regulators. The company is owned and operated by the Missouria-Otoe tribe in Oklahoma and recently sent letters offering rates in excess of 200 percent to Connecticut residents.
Representatives from Connecticut's two federally recognized tribes joined state leaders at Monday's press conference to make it clear that they do not support the activity of out-of-state tribes trying to skirt state law.
"We're here to show that we don't support their efforts," said Rodney Butler, chairman of the Mashantucket Pequot tribe.
Kevin Brown, chairman of the Mohegan tribe, said tribal leaders aim "to ensure that Connecticut residents don’t mistake the fliers that they’re seeing and the billboards that they’re seeing with these two tribes from the state of Connecticut, who are very engaged, as all of you know, in finding the right way forward for the Connecticut consumer."
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The Connecticut Department of Banking fined the Missouria-Otoe tribe $700,000 for improper practices.
Tribal chairman John Shotton called the fine "unprecedented, unwarranted, unconstitutional and unjustified."
Heather Payne, spokesperson for the Otoe-Missouria tribe, defended the tribe's actions in a statement Monday afternoon.
"In recent weeks, Otoe-Missouria tribal enterprises and the sovereignty of our tribal government have been attacked by the State of Connecticut. They are attempting to assert jurisdiction over our tribally chartered, licensed, regulated lending businesses by assessing fines against us for violating their lending laws. They have also attempted to assess a fine against the elected Chairman of the Otoe-Missouria Tribe, in an act of intimidation toward our leadership," Payne said.
She added that the tribe "operates under sovereign tribal law and federal law" and that tribal businesses "do not engage in predatory lending of any kind."
Malloy pledged Monday to sign into law any bills that would make any payday loan that doesn't meet state law requirements on interest rates, null, void, and unenforceable in Connecticut.
