You may have seen a Western Sky Financial ad on TV: a young, attractive Native American woman explains how quick and easy it is to apply for one of their short-term, unsecured payday loans. Typically less than five minutes! “Yes, it’s expensive,” she admits, but loans starting at $850 (342% APR) to $10,000 (89% APR) can be wired into one’s bank account overnight. If the APR rates weren’t enough to turn you off, read the fine print…
Western Sky Financial is owned wholly by “Martin A. Webb,” an individual Tribal Member of the Cheyenne River Sioux Tribe (CRST) and is operated on the reservation. Therefore, according to Western Sky, “all borrowers must consent to be bound to the jurisdiction of the CRST Court, and further agree that no other state or federal law or regulation shall apply to the Loan Agreement, its enforcement or interpretation.” Indeed, borrowers from multiple states have traveled to Timber Lake, SD (population 443) to appear before a tribal court that, according to Attorneys General across the nation, has no jurisdiction over their cases. Many states (California, Colorado, Maryland, Missouri, West Virginia and even South Dakota) are prohibiting the making of payday loans including those to residents through the Internet. The Federal Trade Commission is suing Mr. Webb as an individual and as an officer of Western Sky (Payday, Great Sky, Cash Direct, etc.), charging that he/it sought to unfairly and deceptively manipulate the legal system.
