Judge Rules FTC has Authority over Tribal Lending

A recent decision by a U.S. District Judge grants the Federal Trade Commission (“FTC”) almost limitless power to take action in cases involving payday lending. The ruling strips away the protection of tribal immunity for individuals and others who have operated predatory lending businesses under the protected status of Native American tribal affiliation. Judge, Gloria M. Navarro, of the U.S. District Court for the District of Nevada held that the FTC Act “grants the FTC authority to regulate arms of Indian tribes, their employees, and their contractors,” including tribe-affiliated businesses sued by the FTC over allegedly unfair and deceptive practices in the origination and collection of payday loans. The case stems from a 2012 complaint involving FTC charges against AMG Services, Inc., and others, including race car driver Scott Tucker. The FTC alleged that the defendants’ practices in providing and collecting on ‘payday loans’ violated portions of the FTC Act, the Truth in Lending Act (“TILA”) and the Electronic Funds Transfer Act (“EFTA”).