[T]wo Vermont women are leading an effort to open a federal class-action lawsuit against an Internet lending company that allegedly uses tribal immunity to skirt state laws on high-interest loans.
Jessica Gingras and Angela Given claim that Plain Green, based on an American Indian reservation in Montana, uses illegal lending practices to prey on financially disadvantaged people. They filed their claim in the U.S. District Court in Burlington last week.
Both women took out loans from the company but ended up paying back significantly more than the original loan amount because of the high interest rates Plain Green charges. According to the court papers, between 2011 and 2012, Gingras took out $3,950 in payday loans from Plain Green. In total, she paid back $6,235.03.
Under Vermont law, the finance charge on small loans is capped at 18 percent. But the online company can skirt the cap in Vermont and other states because of tribal immunities.
Plain Green states on its website that it is “wholly owned” by the Chippewa Cree Tribe and is based on the Rocky Boy’s Reservation, but the court papers allege that the company conducts most of its business through third-party off-site contractors.
According to the lawsuit, Plain Green was formed by ThinkCash, a company that had previously used exemptions for banks to avoid state interest caps until the FDIC stepped in in 2008.
Matt Byrne, a Burlington-based attorney representing the two Vermont women, said that he was spurred to take on the case because he finds the alleged “rent-a-tribe” activity troubling.
“I don’t think that tribal immunity should be used as a shield for bad conduct,” Byrne said by phone Monday.
The company promises fast cash, but charges extremely high interest rates in exchange. Plain Green’s site advertises that a first-time borrower will likely have an APR of up to 378.95 percent.
“It ends up just being taking advantage of those who are in difficult financial positions,” Byrne said.
The Vermont Attorney General’s office has had a dozen consumer complaints filed specifically against Plain Green since 2014, according to Assistant Attorney General Justin Kolber. He could not comment on any specific cases.
The state is keeping tabs on Plain Green and other tribal-owned payday companies as part of the larger effort to crack down on illegal loans, he said. Last year, the Attorney General’s Office won a $1 million settlement against payday lending companies. A 2014 fact sheet estimated that as many as 8,000 Vermonters may have taken out an Internet loan in the previous five years.
Other states have initiated lawsuits against alleged rent-a-tribe companies — California and Colorado have lost actions against tribal lending companies. Pennsylvania launched a suit late last year against Think Finance. Meanwhile, the number of predatory lenders that take advantage of tribal immunities seems to be on the rise, Kolber said.
“We’re taking that into account as we continue to try to protect Vermonters from high-interest loans, regardless of company,” Kolber said.
Plain Green company spokespeople did not return calls for comment.
The lawsuit does not say how many people have taken out loans from Plain Green. Byrne estimated that “thousands” would be represented in the class-action lawsuit.
