Minnesota AG sues Fort Belknap money lenders for usury, fraud

Minnesota Attorney General Keith Ellison announced Wednesday that he is bringing a federal lawsuit against Bright Lending, Green Trust Cash and Target Cash Now, three money lenders under the Island Mountain Development Group in Fort Belknap Indian Reservation, for usurious lending and consumer fraud for exorbitant interest rates on small loans issued to citizens of his state.

Representatives from neither Island Mountain Development Group or Fort Belknap had responded to requests for comment by print deadline this morning.

Ellison’s office said the online lenders issued small short-term loans with annual interest rates of between 400% and 800% in violation of Minnesota usury laws, as well as numerous federal laws.

“As attorney general, it’s my job to protect consumers and legitimate businesses from businesses that break the law and take advantage of people who take desperate measures to afford their lives,” Ellison said in the release. “These businesses have been engaging in the worst kind of predatory lending and I’m glad to bring this lawsuit to stop the harm they are causing and help people afford their lives.”

The federal lawsuit relates the experiences of 45 people who say they took loans from these organizations only to later learn that the interest rates were completely unaffordable, and orders of magnitude above the caps that Minnesota Law has in place for maximum interest rates.

The lawsuit alleges that when consumers reviewed their loan documents or complained about the rates they were falsely, according to the lawsuit, told that Minnesota law didn’t apply because the lenders operate online and are owned by sovereign Native American tribes, so they had no legal means of recourse.

“A business that sells in Minnesota must comply with Minnesota’s consumer-lending laws, regardless of whether it offers and makes the loan over the internet or a brick-and-mortar store,” the release says. “The law also applies to businesses even if they are owned by a sovereign entity, whether it be a state or tribal entity.”

Minnesota recently passed statutory interest-rate caps that restrict payday and other short-term loans to a maximum of 36 percent interest.

The release says Ellison’s investigation obtained information from a debt collector showing that 634 of the defendants’ loans were in default and referred to collections from 2018 to 2022, with balances on those defaulted loans totaling more than $608,000.

“Given typical default rates on such loans, the Attorney General’s Office estimates that the lenders issued thousands of loans in Minnesota during that time that violate the law. The lawsuit aims to send a clear message that such predatory lending will not be permitted in Minnesota,” the release says.