Companies Behind eLoanWarehouse.com Operate Illegal ‘Rent-a-Tribe’ Lending Scheme, Class Action Alleges

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A proposed class action alleges the parties behind eLoanWarehouse.com have attempted to skirt Illinois interest rate caps by fraudulently posing as an online payday loan business run by the Lac Courte Oreilles Band of Lake Superior Chippewa Indians.

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The 25-page eLoanWarehouse lawsuit alleges the defendants, including Opichi Funds LLC, have engaged in a “rent-a-tribe” scheme, whereby a non-tribal payday lender claims that its business is owned and operated by a Native American tribe. Companies that orchestrate this unlawful, “elaborate charade” typically maintain that they’re shielded from usury laws due to tribal sovereign immunity and then charge consumers excessive interest rates on small loans, the filing explains.

However, this claim to sovereign immunity does not hold water once a closer look is taken at a purported tribal lender’s operations, the suit relays.

“These so-called ‘tribal lenders’ usually do not survive scrutiny when examined closely, since virtually all business functions occur far from tribal land, by non-tribal members, and overwhelmingly benefit non-tribal members to such a degree that tribal involvement is effectively nil,” the case says.

According to the complaint, the Lac Courte Oreilles Band of Lake Superior Chippewa Indians, a federally-recognized sovereign American Indian tribe located in northern Wisconsin, has “little meaningful involvement” in eLoanWarehouse.com. The suit alleges that the tribe receives less than 10 percent of the payday loan company’s revenues, and the rest goes to non-tribal members, including defendants David Johnson, Kirk Michael Chewning and “a web of interconnected companies,” culminating with Cane Bay Partners VI, LLLP.

“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 filing states.

Although the company behind eLoanWarehouse.com, Opichi Funds LLC, is prohibited under Illinois law from issuing loans at more than nine percent interest, it “regularly” makes loans to residents at interest rates exceeding 200 percent, the complaint says.

The plaintiff, an Illinois consumer, claims to have obtained several loans from eLoanWarehouse.com throughout 2023 with annual interest rates that ranged from approximately 338 to 625 percent.

The filing notes that it is a felony for unlicensed entities such as Opichi Funds to issue loans with more than 20 percent interest rates.

The lawsuit looks to represent any Illinois residents to whom a loan was made in the name of eLoanWarehouse.com at more than nine percent interest which has not been paid in full.

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