Companies Behind ClearAirLending.com Issue Illegal Loans to Illinois Residents, Class Action Says

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A proposed class action claims the companies behind ClearAirLending.com have issued “predatory and unlawful” loans to Illinois residents while fraudulently hiding behind tribal sovereign immunity to sidestep state interest rate caps.

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The 19-page case was filed by an Illinois resident who, in August 2023, obtained a $500 loan from the online lender with an annual percentage rate of more than 699 percent. As the lawsuit tells it, the companies in charge of making, funding and collecting on Clear Air Lending loans—including defendants Robinson Economic Services, Robinson Economic Development Corporation and CT2022—regularly issue loans to individuals in Illinois at excessively high interest rates.

However, the filing alleges that the defendants lack the proper licensure from the state Department of Financial and Professional Regulations that would otherwise allow them to make loans to Illinois residents with interest rates that exceed nine percent. Under state law, loans made by an unlicensed entity with interest rates that surpass nine percent are “void and unenforceable,” and those made with interest rates higher than 20 percent are considered a felony, the suit says.

According to the complaint, the defendants have attempted to evade prosecution under Illinois usury laws by engaging in a so-called “rent-a-tribe” scheme, which is an “elaborate charade” frequently adopted by online lenders whereby they claim their otherwise illegal businesses are entitled to the sovereign immunity of Native American tribes.

Although Robinson Economic Development Corporation purports to be “an economic development arm” of the Robinson Rancheria of Pomo Indians of California, the Native American Indian tribe has, in reality, “no meaningful control over the business, how it is operated, who it lends to, and so forth,” the case alleges.

“Any tribal involvement does not go beyond the hiring of a handful of tribal members to work as phone customer service representatives or similar low-level jobs,” the filing says, claiming that Clear Air Lending is overwhelmingly run by and for the benefit of non-tribal members.

“Where non-tribal individuals and entities control and manage the substantive lending functions, provide the lending capital necessary to support the operation, and bear the economic risk associated with the operation, they are not in fact ‘operated’ by Native American tribes and, therefore, are not shielded by sovereign immunity,” the complaint says.

The lawsuit looks to represent anyone in Illinois to whom a loan was made through ClearAirLending.com at more than nine percent interest and which has yet to be paid in full.

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