Class action lawsuit claims payday lender Minto Money operates as illegal ‘rent-a-tribe’ program

Operators of Minto Money payday loan equipment are facing a proposed class action lawsuit that alleges they initiated what’s called a ‘rent-a-tribe’ scheme to circumvent laws state and federal on usury.

Defendants Minto Development Corporation, its CEO, Benhti Economic Development Corporation and Minto Financial, which offer small loans through mintomoney.com, claim to be associated with the Minto Native Village, a federally recognized “scarce of resources” Native American tribe in Minto, Alaska, the 20-page dossier says. The lawsuit alleges, however, that the tribal lending entity is “simply a front for an illegal lending system,” since nearly all of the financing, operation, and profits of Minto Money’s lending business are carried out by and primarily benefit non-tribal members.

According to the case, the defendants pay Minto’s home village only 2% of their income in exchange for the use of his name, allegedly as a way to exploit the tribe’s sovereign immunity to avoid liability under state and federal laws. According to the lawsuit, Minto Money charges usurious interest rates, typically over 700%, that far exceed federal and state limits. In this way, according to the suit, the defendants can reap huge profits from borrowers without being duly licensed to operate as a lender in states such as Illinois.

The lawsuit alleges that loans made by the defendants in Illinois at interest rates greater than nine percent are void and unenforceable and violate several state laws, not to mention federal Racketeer Influenced and Corrupt (RICO) law. Organizations Act).

According to the lawsuit, the defendants obtain consumer reports on loan applicants, analyze the information in the reports, assign a risk score to each applicant, and determine the terms and “all other significant aspects of the loan.” According to the case, the Minto tribe has “no say in these matters.” In fact, the tribe’s only involvement in the defendant’s lending business is “the opinion of a representative of the tribe.”[]completed loan documents and details and subsequent “final approval” of the loan while it was supposed to be on tribal soil, according to the lawsuit.

The lawsuit says that the financing of the loans at issue is entirely controlled by the CEO of Minto Development Corporation, who is not a Minto Tribe, and his non-Tribal investors.

The case points out that although the listed address for Minto Money is a building on tribal land in Minto, Alaska, that location is used “for school and senior lunch programs, community meetings, and council operations.” village”, and lack of broadband. internet service. According to the complaint, the idea that an online lender that conducts a “large number” of transactions could operate from this particular building in Minto is “dubious at best.”

The lawsuit claims that the defendants never had a state or federal bank or credit union charter or lending license in Illinois, and therefore are not permitted under state law to charge residents more than 9% interest on loans.

The case appears to represent individuals with addresses in Illinois who were issued a loan in the name of Minto Money at over nine percent interest where:

  • The loan has not been fully repaid;
  • The loan is still outstanding or has been repaid within the last two years;
  • The loan was granted on or after March 23, 2021; Where
  • The loan was made within the past four years.

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