Fast Day Loans Hit with Class Action Over Alleged ‘Rent-a-Tribe’ High-Interest Lending Scheme

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Fast Day Loans faces a proposed class action that claims the payday lender has violated Indiana law by issuing high-interest loans to state residents while purporting to be protected from liability by a Native American tribe’s sovereign immunity.

The 17-page lawsuit alleges the defendants—WLCC Lending FLD (who does business as Fast Day Loans); Wakpamni Lake Community Corporation; Wakpamni Lake Community Corporation II (doing business as WLCC II); and three individuals—have operated what’s come to be known as a “rent-a-tribe” scheme.

Per the suit, these types of operations involve a payday lender who purports to be operated by a Native American tribe—in this case, the Oglala Sioux Tribe—in order to take advantage of the group’s tribal immunity. In reality, the suit argues, the lender pays the tribe only a small percentage of its revenues in exchange for the use of its name, while being funded and operated entirely by non-tribal members.

The lawsuit claims that the defendants are not, in fact, a legitimate “arm of the tribe” and instead have operated “contrary to the wishes of tribal authorities.” The suit alleges that when two of the individual defendants approached the Oglala Sioux Tribe’s Economic Development Office with a proposal to enter into a high-interest consumer lending business, the tribe refused to do so. It was only after this event that the individuals formed WLCC and WLCC II, the case relays.

According to the complaint, because Fast Day Loans’ operations have been conducted on non-tribal lands, including in Utah, Texas, Canada and Belize, by non-tribal entities and individuals and have provided no benefit to the Oglala Sioux Tribe, the lender is not protected from liability under the tribe’s sovereign immunity.

“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 argues.

The suit alleges that Fast Day Loans has nevertheless issued loans to Indiana residents at more than 700-percent interest and in violation of the state’s usury laws.

The lawsuit looks to represent anyone with an Indiana address to whom a loan was made in the name of Fast Day Loans at more than 36-percent interest on or after the date two years before the lawsuit was filed (April 19, 2022), or on or after a date four years prior to the suit’s filing.

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