Several tribal officials have agreed to fund a settlement worth $39 million to resolve claims of trying to circumvent loan laws.

The settlement benefits consumers who obtained a loan from Golden Valley, Silver Cloud or Majestic Lake at any time or those who obtained a loan from Mountain Summit before February 1, 2021.

According a loan class actiona number of loan companies formed under the tribal laws of the Habematolel Pomo Tribe of the Lake Superior Tribe have used tribal laws to circumvent state laws on loan interest and security.

Plaintiffs in the case say they were charged interest rates of between 543% and 919% on payday loans. While such high interest rates may be permitted under tribal laws, the plaintiffs in the case say they were not properly informed that their loans would not be governed by stricter state laws.

“Under this model, payday lenders launch their loan products through a corporation ‘owned’ by a Native American tribe and organized under their laws,” the class action lawsuit explains.

“Tribal society serves as a conduit for loans, facilitating a dubious and legally incorrect claim that loans are subject to tribal law, not the protections created by state usury and licensing laws.”

Tribal officials have not admitted any wrongdoing, but have agreed to resolve the allegations with $39 million in settlements.

Under the terms of the Tribal Loans Settlement, class members may be eligible for a cash payment based on the amount they have paid in principal and interest on eligible loans. Borrowers are not eligible for these payments if they meet any of the following criteria:

• Have not made any payments on their loans
• Lived in Arizona, Arkansas, Colorado, Connecticut, Idaho, Illinois, Indiana, Kansas, Kentucky, Massachusetts, Minnesota, Montana, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Pennsylvania, Ohio, Dakota South, Vermont, Virginia, or Wisconsin and has not made any payments above the loan principal balance
• Lived in Alabama, Alaska, California, Delaware, Florida, Georgia, Hawaii, Iowa, Louisiana, Maine, Maryland, Michigan, Mississippi, Missouri, Nebraska, North Dakota, Oklahoma, Oregon, Rhode Island, South Carolina, Tennessee, Texas, Washington, West Virginia, Washington D.C., and Wyoming and did not pay interest beyond their state’s legal limits
• Lived in states with no interest restrictions (Utah and Nevada)

Class members who meet the payment criteria will not receive a full refund of their paid amounts, but will be eligible for a share of the settlement proportional to what they paid.

For example, a class member who paid $10,000 in interest and principal would be eligible for a larger share of the settlement than those who only paid $1,000 in interest and principal.

Borrowers can visit the settlement website to find out if they will receive any money.

Although not eligible for monetary settlement payments, all class members are eligible for non-monetary settlement benefits.

Class members can have their outstanding balances canceled for any Golden Valley, Silver Cloud, Majestic Lake, or Mountain Summit loans covered by the class definition.

In addition, tribal officials will request that all negative information regarding Covered Loans be removed from group members’ credit reports.

The exclusion and objection deadline is September 6, 2022.

The final settlement approval hearing is scheduled for October 21, 2022.

No claim form is required to avail the Tribal Loans Settlement. Group members who do not opt ​​out will automatically receive payments.