(C) Daily Montanan This story was originally published by Daily Montanan and is unaltered. . . . . . . . . . . Fort Belknap company officials agree to cease short-term lending in Minnesota in settlement – Daily Montanan [1] ['Blair Miller', 'More From Author', '- February'] Date: 2024-02-28 The Fort Belknap Indian Community’s short-term lending companies will have to cease operations in Minnesota, according to a settlement two officials of the companies’ parent company reached with the Minnesota Attorney General’s Office. A federal judge in Minnesota signed off on the agreement Tuesday, kicking off a timeline by which Island Mountain Development Group officials will have to provide the Attorney General’s Office with any information about existing loans given to Minnesotans, stop collecting any extra interest, and cease operations for at least four months, and possibly longer. Attorney General Keith Ellison had sued the CEO and chairman of the reservation’s economic development company, Island Mountain Development Group, in October, accusing the company and its subsidiary short-term lending companies of violating state and federal consumer protection and usury laws by giving out and collecting on loans with exorbitant interest rates. The lending companies bring in about 90% of IMDG’s revenue, and IMDG’s revenue accounts for about three-quarters of Fort Belknap’s non-federal budget, tribal and company officials have said in recent court filings. Minnesota’s lawsuit against the company came after a monthslong investigation by the Daily Montanan that showed IMDG’s three lending companies are under scrutiny in federal courts in other states. At the same time the tribe, which owns IMDG, ousted the former board over financial mismanagement allegations and filed a lawsuit against the company’s former lawyer. The Minnesota lawsuit identified three of IMDG’s subsidiary lending companies – Bright Lending, Target Cash Now, and Green Trust Cash – that the state says was engaging in predatory lending involving Minnesota residents. The Attorney General’s Office said it had identified 634 loans given out to Minnesotans that were illegal under Minnesota law, but which defaulted and were referred to collections companies to the tune of more than $600,000. But the suit said there were potentially hundreds of other people who received similar illegal loans. The Daily Montanan previously reported IMDG’s lending companies were often handing out small loans with interest rates between 400% and 800%. Minnesota law caps most general loans’ interest rates at 8%, prohibits contracts that say state usury laws do not apply, requires lenders to be licensed and report back to the state, and caps short-term lending interest rates at 50% if a consumer can make payments, and 36% if they cannot. After the lawsuit was filed in November, the two tribal officials – IMDG CEO Evan Azure and IMDG Chairman William Bell – asked the court to dismiss the case and denied that Minnesota law applied to them because of sovereign immunity. The state asked for a preliminary injunction to block them from doing business in Minnesota in January, and the two sides came to a settlement agreement and consent decree on Feb. 20, according to court documents. Under the agreement, IMDG and its subsidiaries will not be able to offer or provide loans to Minnesota residents while they are physically within state boundaries, and the companies must say on their websites that they cannot lend to Minnesota residents. The lending companies already explicitly state on their sites that there are several other states, including Montana, where they cannot provide loans to people. There is a second option for Azure and Bell to strictly adhere to Minnesota law if they want to continue doing business in Minnesota, but they would have to provide 120 days’ notice before they could restart activities there. The company will also have to modify any existing loans with Minnesota customers so they cannot collect on any interest charged or accrued after the origination of the loan, and will only be able to recover the principal balance of those loans. The officials will have 45 days to show the state and court it is in compliance with the agreement by sending a confidential sortable spreadsheet identifying all active loans and to whom they belong. They will also have 30 days to provide notice of the agreement to everyone involved with IMDG. The officials did not admit to any wrongdoing as part of the agreement, and while it releases them from the claims in the original complaint, private civil claims could still be brought in the future. Both sides will bear their own costs and fees for the case. Azure did not respond to an email seeking comment about the settlement. Ellison and his office said it believes the outstanding balances of interest could exceed $1 million. “If I find lenders charging outrageous interest rates and take advantage of Minnesotans, I will step in and bring a stop to it—whether it’s a business on your street corner or online,” Ellison said in a statement. “I’m pleased that my office was able to uncover this illegal lending operation, bring it to an end, and help the people of Minnesota afford their lives.” Meanwhile, separate lawsuits in Alabama and New Jersey in which attorneys are going after the lending companies over similar claims continue to move forward. Last month, a judge in the New Jersey case found that one of the companies was not an arm of the tribe, which could mean the company is not immune from suit under the sovereign immunity doctrine that protects tribes from being sued in many instances because they are sovereign nations. Azure has asked the judge to reconsider that decision – one that will likely be made next week, according to court records. Attorneys for the plaintiff in the Alabama suit have pointed to the judgment in New Jersey as reason for their suit to move forward as well. In the Montana lawsuit against IMDG’s former attorney and her law firm, both sides agreed to dismiss IMDG’s claims against the two, but claims made by four former council members who were put on the board after they ousted the former board are moving forward, with deadlines set for next year. Meanwhile, nearly all of the council members who ousted the former IMDG board did not win re-election to the tribal council last fall, and IMDG has put a new board in place in the months since. [END] --- [1] Url: https://dailymontanan.com/2024/02/28/fort-belknap-company-officials-agree-to-cease-short-term-lending-in-minnesota-in-settlement/ Published and (C) by Daily Montanan Content appears here under this condition or license: Creative Commons CC BY-NC-ND 4.0. via Magical.Fish Gopher News Feeds: gopher://magical.fish/1/feeds/news/montanan/