Class Action Alleges West Side Lending Issued Predatory Loans, Faked Tribal Affiliation

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An Illinois consumer alleges online lender West Side Lending, LLC has attempted to hide behind a purported affiliation with the Menominee Tribe of Wisconsin in making loans with usurious interest rates. 

The 19-page “rent-a-tribe” lawsuit alleges West Side Lending, Wolf River Development Company and New Platform Fund, LLC have violated the Illinois Predatory Loan Prevention Act by extending loans to consumers at annual percentage rates of between 630 and 780 percent, far in excess of the maximum allowable 36 percent. According to the proposed class action, any loan made in violation of the Illinois predatory loan law is “null and void and no person or entity shall have any right to collect, attempt to collect, receive, or retain any principal, fee, interest, or charges related to the loan.” 

Per the case, West Side Lending is one of multiple high-interest lending entities purportedly owned by the Menominee Indian Tribe, with others including Moose Lending, LLC; Elk Lending, LLC; Loop Fund; and East Line Lending LLC. The suit relays that the domain registry for the company’s website is a nominee in Iceland, which, per the complaint, “would not be necessary were it actually owned and controlled by the Menominee Tribe.” 

On information and belief, the lawsuit alleges, the economic benefit of West Side Lending’s activities is “received by non-Native American persons,” a hallmark of what have come to be known as “rent-a-tribe” schemes. In such an arrangement, the suit relays, an online payday lender will “create an elaborate charade” whereby it claims to be owned and operated by a Native American tribe so as to use tribal sovereign immunity to shield itself from state and federal usury laws.

“In exchange for use of the tribe’s name, the beneficial owner of the payday lending scheme pays the cooperating tribe a fraction of the revenues generated. While the percentage varies from scheme-to-scheme, the number is almost always in the single digits.” 

The complaint says that the plaintiff in May 2021 took out a $1,500 loan from West Side Lending with an APR of 777.86 percent. Though the plaintiff was able to repay that obligation, the consumer has not been able to repay a second $2,450 loan with an APR of 724.72 percent, the suit claims. Per the filing, West Side Lending served a wage assignment demand to the plaintiff’s employer in September 2021 without advance notice to obtain repayment for the loan. 

The lawsuit alleges that the defendants have never had a license from the Illinois Department of Financial and Professional Regulation, or a state or federal banking or credit union charter, entitling them to make loans to state residents at more than nine percent interest. 

The case looks to represent all individuals with Illinois addresses to whom a loan was made in the name of West Side Lending, LLC at more than nine percent interest, and the loan has not been paid in full. 

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