SAN JOSE – A class action complaint filed June 11 in U.S. District Court for the Northern District of California alleges defendant Big Picture Loans LLC engaged in what industry experts called a “rent-a-tribe” scheme to use Native American tribal status to cover higher than allowed interest rates in payday lending operations.
The defendant approached the Lac Vieux Desert Band of Lake Superior Tribe with a business known as Bellicose Capital, according to court documents, which performed underwriting, funding and many other routine operations. Plaintiffs Christine Cumming, Lamesha Kondo, Andrea Mendez and Tammy Wangeline allege the tribe did not have control over the operations of the company.
Plaintiffs charge Racketeering Influenced and Corrupt Organizations claims against the defendant, and allege the defendant violated usury laws in four states: California, Ohio, Wisconsin and Texas.
The complaint also documents the laws of the various plaintiff's home states in relation to usury and maximum allowed interest rates.
For example, the document shows that in California, “unless a lender falls into one of the exemptions approved by the state legislature, it may not charge more than 10 percent interest per annum on a loan."
In Ohio, the document shows, the generalized maximum amount of interest allowed is 8 percent, according to state code.
Wisconsin law limits weekly or monthly installment loans to rates of 6 percent or under, and Texas rate is cited at 10 percent.
The complaint also documents enforcement by the Consumer Financial Protection Bureau, which allegedly caused Bellicose Capital to change its name to Ascension Technologies.
Calling the defendants' loan agreements “void and unenforceable,” the plaintiff's complaint provides six counts of violation of the usury laws of various states, violation of RICO and unjust enrichment.