HELENA — Two Vermont women are trying to open a class-action lawsuit that, if successful, could upend the practice of online lending companies using Native American tribes’ sovereignty to skirt state laws against high-interest payday loans.
Jessica Gingras and Angela Given say in their lawsuit filed Wednesday in U.S. District Court in Vermont that Plain Green LLC is exploiting and extorting its borrowers through predatory lending in violation of federal trade and consumer laws.
Plain Green charges annual interest rates of up to 379 percent for its loans, which are typically used by low-income borrowers in need of emergency cash. The company is owned by Montana’s Chippewa Cree Tribe, which uses the tribal-sovereignty doctrine to ignore states’ laws that cap interest rates on payday loans.
The doctrine grants tribes the power of self-government and exempts them from state laws that infringe on that sovereignty, and it gives them immunity in many judicial proceedings.
Non-Indian companies have formed partnerships with tribes to operate the lending operations while benefiting from tribal sovereignty, a setup the lawsuit calls a “rent-a-tribe” scheme. In this case, a company called ThinkCash provided Plain Green with the marketing, funding, underwriting and collection of the loans, according to the lawsuit.
“The rent-a-tribe concept bugs me. It takes advantage of people in tough circumstances,” Matt Byrne, the attorney for Gingras and Given, said Friday. “We want to show that tribal immunity cannot be used to shield bad conduct.”
The lawsuit names Plain Green CEO Joel Rosette and two of the company’s board members as defendants. A call to Rosette was referred to a Helena public relations firm. The Associated Press refused The Montana Group’s demand that questions be submitted in advance as a condition to interview Rosette.
The Montana Group later released a statement attributed to Rosette that he has confidence in Plain Green’s compliance with the industry regulations and in making sure borrowers understand the loans. “Plain Green takes every effort to educate our customers and ensure they are provided the highest quality of service,” the statement said.
The Great Falls Tribune first reported the Vermont lawsuit.
Gingras and Given separately took out multiple loans from Plain Green that ranged from $500 to $3,000. They allege that the interest rates they were charged and the company’s requirement to access a borrowers’ bank account as a condition of granting a loan violated federal trade and consumer protection laws.
They say the company also is breaking federal law by not investigating its borrowers’ ability to repay their loans and by setting repayment schedules designed to maximize interest collections.
They are asking a judge to bar Plain Green from making any more loans and to prevent the company from lending on the condition that it has access to the borrowers’ bank accounts. They are seeking the return of all interest that was charged above a reasonable rate and the return of other financial charges made on the loans.
They are seeking to turn the case as a class-action lawsuit. It is unclear how many people have borrowed money from Plain Green, though the women estimated there are thousands of borrowers.
The Montana attorney general’s office has received 53 complaints against Plain Green since 2011, and the Better Business Bureau has fielded 272 complaints about the company over the last three years.
A separate civil lawsuit filed last year by the Chippewa Cree Tribe against a former partner estimates that Plain Green has made at least $25 million for Rocky Boy’s Indian Reservation since 2011.