Connecticut's two federally recognized Indian tribes sided Monday with the state in a dispute with an Oklahoma-based tribe and its Internet payday loan companies.
The Otoe-Missouria Tribe of Indians contends it has been attacked by Connecticut, which has fined the tribe's chairman and its business entities a total of $1.5 million for violating the state's cap on interest rates.
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"They are attempting to assert jurisdiction over our tribally chartered, licensed, regulated lending businesses by assessing fines against us for violating their lending laws," said Heather Payne, a spokeswoman for the tribe. She said the tribe's businesses "do not engage in predatory lending of any kind" and the tribe has enacted strong consumer protections.
She said "any suggestion that our tribe is required to follow state law is completely at odds" with the concept of Native American sovereignty.
Rodney Butler, chairman of the Connecticut-based Mashantucket Pequot Tribal Nation, said tribes have sovereign rights and should be allowed to pursue economic development ventures, including consumer lending. However, he said tribes "should be honoring the state-imposed limits where they are doing business."
He also said the tribes and the entire short-term lending industry should not charge consumers unreasonable fees and extremely high interest rates. State Rep. Matthew Lesser, D-Middletown, who is backing a bill that would strengthen the state's ability to void short-term loans, said the tribal lending companies are charging 200 to 450 percent interest.
Kevin Brown, chairman of the Connecticut-based Mohegans, said his tribe declined an offer by the Otoe-Missouria Tribe to join them in the short-term lending business. He voiced concern that consumers might think the Mohegans and Mashantuckets are part of a recent marketing campaign underway by the Oklahoma tribe's businesses.
He said the state's denial is not about tribal sovereignty, but about protecting Connecticut consumers.
"And while we always stand united with our tribal brothers on those issues of sovereignty and health and welfare, we wanted to make it clear we stand apart on this particular business venture," Brown added.