Class Action Alleges Eagle Valley Lending, Fast Auto Loans Operate Illegal ‘Rent-A-Tribe’ Payday Loan Scheme

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A proposed class action lawsuit claims online lenders Eagle Valley Lending and Fast Auto Loans are behind a “rent-a-tribe” scheme whereby they issue “predatory” loans with unlawful interest rates to Illinois residents.

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Though Eagle Valley Lending claims to be wholly owned and operated by the federally recognized sovereign Tonto Apache Tribe, the 21-page lawsuit alleges the non-tribal company—along with its owner, Fast Auto Loans, Inc.—illegally attempts to avoid state usury laws by “fraudulently hiding behind tribal sovereign immunity.”

According to the suit, the defendants—online lenders who provide loans to consumers at annual percentage rates of more than 700 percent—make illegal payday loans in the name of the “tiny” Arizona-based Native American tribe they purport to be owned by in order to be “shielded” from state and federal laws. As the case tells it, however, the “tribal lending entity is simply a facade for an illegal lending scheme,” whereby the non-tribal lenders pay just a fraction of the proceeds to the cooperating tribe.

Under Illinois law, loans made by unlicensed entities at more than nine percent interest are considered void, and the state’s criminal usury law states that a loan at more than 20 percent interest is a felony, the filing explains.

Despite having never obtained a legal license, the defendants nevertheless make loans to Illinois residents at interest rates well above nine percent, the lawsuit charges.

Per the case, the Illinois Department of Financial and Professional Regulation regularly takes legal action against unlicensed out-of-state lenders that make online loans to Illinois residents.

The plaintiff, a Chicago resident, took out a $1,000 loan from Eagle Valley Lending in December 2021 with an annual percentage rate of 396.54 percent—over 10 times the legal rate in Illinois, the complaint stresses.

The lawsuit looks to represent:

“(a) [A]ll individuals with Illinois addresses (b) to whom a loan was made in the name of Eagle Valley Lending at more than 9% interest (c) which loan has not been paid in full;”

“(a) [A]ll individuals with Illinois addresses (b) to whom a loan was made in the name of Eagle Valley Lending at more than 9% interest (c) which loan is still outstanding or has been paid on or after a date two years prior to the filing of suit;”

“(a) [A]ll individuals with Illinois addresses (b) to whom a loan was made in the name of Eagle Valley Lending at more than 36% interest (all of its loans qualify) (c) on or after March 23, 2021;” and

“(a) [A]ll individuals with Illinois addresses (b) to whom a loan was made in the name of Eagle Valley Lending at more than 18% interest (all of its loans qualify) (c) which loan was made on or after a date 4 years prior to the filing of suit.”

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