LendUMo.com Hit with ‘Rent-a-Tribe’ Class Action in Illinois Over Allegedly Excessive Payday Loan Interest Rates

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A proposed class action claims the entities behind online lending website LendUMo.com are involved in an illegal “rent-a-tribe” scheme whereby Illinois consumers have been issued payday loans with excessive interest rates.

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The 20-page lawsuit alleges that although defendants Niswi, LLC—which does business as LendUMo—and LDF Holdings, LLC purport to be owned by a small, federally recognized Native American tribe based in rural Wisconsin, the non-tribal lenders are, in reality, exploiting the tribe’s sovereign immunity in order to evade state usury laws.

The suit also names as defendants Brittany Allen, an executive who apparently directed and controlled the lending practices of LDF Holdings, and Soaren Management, LLC, a “service provider” for LendUMo which the case claims is the online lender’s true owner.

According to the complaint, LendUMo has extended loans to Illinois residents at annual percentage rates greater than 450 percent. The unlawful loans are void and unenforceable under the Illinois Interest Act, which prohibits unlicensed entities from issuing loans at more than nine percent interest, the filing contends.

Notably, though the companies behind the online lending website claim to be operated by the Lac Du Flambeau Band of Lake Superior Chippewa Indians, much of the economic benefit finds its way into non-tribal pockets, the lawsuit contends. In fact, the tribe receives only between one and three percent of the revenues generated by the lending operation in exchange for the use of its name, the suit shares.

In January 2022, the Illinois plaintiff took out a $1,300 loan from LendUMo with an interest rate of 580.94 percent—far in excess of the legal maximum, the case charges.

The lawsuit looks to represent:

“(a) [All] individuals with Illinois addresses (b) to whom a loan was made in the name of LendUMo at more than 9% interest (c) which loan has not been paid in full;”

“(a) [All] individuals with Illinois addresses (b) to whom a loan was made in the name of LendUMo at more than 9% interest (c) which loan is still outstanding or has been paid on or after a date two years prior to the filing of suit;” and

“(a) [All] individuals with Illinois addresses (b) to whom a loan was made in the name of Niswi, LLC [doing business as] LendUMo at more than 36% interest (all of its loans qualify) (c) which loan was made on or after a date 4 years prior to the filing of suit.”

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