Tribal loan sharks are preying on the vulnerable

Do you ever check out the fine print on TV ads? I do.

Every time I see a political ad on TV, making some outrageous claim or other, I always grab the remote, pause the ad and read the disclaimer, which of course is required by law. Sometimes it’ll be a candidate or an organization like a chamber of commerce. More and more these days, you get some meaningless name like “Citizens for Mom and Apple Pie,” which tells you nothing. And often times, there’s nothing you can do to find out where the money comes from to fund such groups.

Then a Cal Worthington ad will come on, and Cal starts squawking about the various cars and trucks he’s trying to sell. And they seem such awesome deals. There’ll be some truck spinning on his revolving thing and he says it’s $16,999, just $129 a month.

I’m doing the math in my head and wondering how many months it’s going to take to pay that off. Grab the remote, freeze. Ah ... eight grand down.

Always read the fine print.

So I’m vegging on the couch yesterday watching “World’s Wildest Police Videos” on Spike. Love those kind of shows. It’s endlessly entertaining watching how stupid some people can be.

The ads come on, and I’m confronted by this really rather attractive young woman speaking to the camera, saying that she’ll lend me $10,000. Or, rather, that a company called Western Sky Financial will.

We’ve all probably seen Montel Williams on TV saying that he can get $1,000 deposited in our bank accounts by tomorrow, but $10,000 caught my attention. The nice-looking girl, who was somewhat Hiawatha-ish in her looks, was telling me that I could have $10,000 straight away, without any credit check at all. They would just trust me!

I get to the end of the ad and there’s a fine print disclaimer that says that Western Sky is a wholly Native American owned business. Interesting.

But I missed the terms and was fairly sure there was another disclaimer back at the beginning of the ad. So I rewind, and sure enough, there it is.

I take a sip of coffee, read the terms of a “typical $10,000 loan” and do a spit take. It comes with an APR of just under 90 percent, requiring 84 months of payments. Just $743 a month. Do the math and it’s a total repayment of $62,412 over seven years. You very nearly repay the entire loan amount the first year; the rest is all interest.

Is this legal? Really? Isn’t this loan sharking? In tough economic times, isn’t this the kind of stuff that needs to be outlawed?

So I crack open my Googler and do a search for Western Sky Financial. Their website states that the company is “owned wholly by an individual Tribal Member of the Cheyenne River Sioux Tribe ... operating within the exterior boundaries of the Cheyenne River Sioux Reservation, a sovereign nation located within the United States of America.”

And of course, the Interwebs is strewn with ghastly tales of usury involving these people to the point that some states, notably Colorado and Maryland, have sued to stop them from lending within their borders, claiming that they require a license to lend at interest rates higher than a certain maximum rate.

But looky here; Western Sky states in its loan agreements that (1) the agreement is exclusively subject to the laws of the Cheyenne River Sioux Tribe, (2) the debtor consents to the exclusive jurisdiction of the Cheyenne River Sioux Tribal Court, (3) the agreement is governed by the Indian Commerce Clause of the U.S. Constitution and Cheyenne River Sioux Tribal laws, and (4) the company is subject to the laws of no state.

When the states challenge them and rule that they can’t engage in predatory lending practices within their borders, you guessed it, Western Sky claims tribal immunity. As if it isn’t enough to rob people blind with their endless casinos, they’re now in the loan-sharking business and insist that U.S. law doesn’t apply to them.

Part of me has little sympathy for someone stupid enough to take out loans with such outrageous repayment terms. But another part of me understands the desperation that it’s possible to feel when the money runs out and is outraged by entities like Western Sky and their scummy owner, Martin Webb, who do nothing but heap more misfortune on the least fortunate among us.

Well, these folks are now actively promoting their loans in the state of Alaska. Of course, the claims of tribal immunity are bull pucky, not least of which because the running of TV ads takes the point of engagement of the commerce in question outside of the boundaries of the reservation. They are being laughed out of court everywhere.

It’s time for the state of Alaska to step up. I don’t know who reads this column. I’m guessing some people do.

But if there’s anyone reading this who’s involved with whatever regulatory agency deals with keeping people like this in check, it’s time to do something before desperate and gullible Alaskans start signing on.

Time to shut them down!

Ivan Moore is a public opinion pollster who lives in Anchorage and works for a variety of clients — political, corporate, public sector, or just plain curious — around Alaska. His opinions are his own. He can be reached at ivan@ivanmooreresearch.com.