PAYDAY LOAN COMPANY ON RESERVATION SUBJECT TO IOWA LAW

Photo Credit: Holly McCoy An important September 2013 ruling from the Iowa Department of Inspections and Appeals said that Western Sky Financial, an Internet payday loan company owned by a member of the Cheyenne River Sioux Tribe and located on the Cheyenne River Sioux reservation in South Dakota is subject to Iowa consumer laws. Western Sky sells the loans it makes to WS Funding, a subsidiary of CashCall, which services all the loans made in Iowa by Western Sky. The payday loans made by Western Sky can carry interest rates in excess of 135%. Western Sky and CashCall had argued that since it was owned by a tribal member and located on a reservation it was entitled to sovereign immunity and not subject to Iowa state laws. The Administrative Law Judge ruled, however, that since Western Sky was not the Tribe itself and most of the transactions occurred off the reservation, Iowa laws controlled. The judge said that since Western Sky solicited Iowa consumers to enter into loan agreements via the Internet it couldn't hide behind tribal sovereign immunity to shield itself from Iowa laws. If you're having problems with Western Sky or another payday loan company connected with a tribe contact us about what might be done.