Western Sky Sued By NY AG

The Attorney General of New York, Eric T. Schneiderman must have thought that a Native American owned loan company was scalping lenders, so he decided to sue the company. It turns out that Western Sky, which is a loan company associated with some members of  South Dakota’s Cheyenne River Sioux Confederation were charging New Yorkers way above the legal 16% interest rate by state law as well as not registered to do business in New York state. Western Sky has been accused of having interest rates that ranged from 89.68% all the way up to 355% interest on unsecured loans with no collateral. The company claims that it is a Native American owned company that operates under the federal treaties for businesses operated on reservation lands, so they claim to be exempt from many laws that regulate most loan companies. Now, a showdown between a state attorney general to act on behalf of consumer protection will lock horns with a Native American business operated from a federally sanctioned reservation land area. It will be interesting to see how this one turns out. This loan company does do a service by loaning people money that would have a hard time getting a loan elsewhere, however the extremely high cost of these loans seem to set up many persons to default on these loans, raising questions about this business model.

Expect to see a fascinating court decision come out of all this, whether the AG or federal treaties prevail here.

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