Lawsuit: Think Finance Charged 400 Percent Interest on Loans in ‘Rent-a-Tribe’ Scheme

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Think Finance, Inc., six affiliate entities, and the company’s chief executive officer are facing a proposed class action lawsuit that claims they partnered with a Native American tribe to offer consumers loans with unlawfully high interest rates while shielding themselves from liability by exploiting the Tribe’s Sovereign Immunity. In this “rent-a-tribe” scheme, the defendants, the suit claims, maintain complete control over business operations while paying the Otoe-Missouria Tribe “a tiny fraction” of their revenue – a flat fee of 4.5 percent – in order to use its name and evade state and federal lending laws. This business model, according to the complaint, allows the defendants to sidestep Florida’s interest cap of 18 percent per year (for loans of less than $500,000) and charge consumers as much as 400 percent on small “payday” loans.

The plaintiff says she applied for loans with the defendants on two occasions – for the amounts of $1,000 and $700 – and ended up paying a total of $3,439.45 and $1,302.73, respectively.

Notably, the case mentions that the Pennsylvania Attorney General filed suit against the defendants over similar allegations in January 2016.