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WASHINGTON Fighting back against last week's attempt to shutter legal online lending enterprises operated by tribal nations, the Native American Financial Services Association (NAFSA) directed New York Superintendent of Financial Services Benjamin Lawsky to cease and desist his attacks on American Indians.
In a letter sent to Mr. Lawsky on Monday, Barry Brandon, Executive Director of NAFSA, made clear that tribal nations and the legal businesses they operate would not be bullied or intimidated out of operation. In recent years, online lending enterprises have been a boon to American Indian economic development, which has traditionally experienced setbacks due to tribes' isolated location and sparse populations.
Below is the full text of Mr. Brandon's letter to Benjamin M. Lawsky Superintendent of Financial Services New York State Department of Financial Services:
We are directing you to cease and desist your activities against Native American tribes. Your request that Native American tribes stop engaging in legal and licensed online lending in the State of New York is discriminatory to Indian country and an attack on our sovereignty. We are also directing you to cease and desist your intimidation of financial services institutions that process payments for a number of businesses owned and operated by sovereign Native American tribal nations. As a representative of numerous Native American tribes which own and operate online lending enterprises, we strongly disagree with your characterization of these payments as illegal. To the contrary, our businesses are legal and licensed and owned and operated by American Indian tribal governments across the United States.
Tribal nations, with the support and encouragement of the federal government, have engaged in significant economic development efforts, including operating online lending entities which have been targeted by you personally through the New York Department of Financial Services (DFS). We want you to be aware that we view these actions as a direct threat to tribal sovereignty and our efforts to develop economic self-sufficiency. We are putting you on notice that tribal nations are considering the next legal steps to take regarding DFS's actions. The targeting of tribally owned and operated businesses without any discussion or consultation is an insult to tribal nations and ignores over two centuries of federal Indian law.
Again, online lending, when offered by federally-recognized tribal governments, is legal. Tribal governments export tribal law over the Internet and consumers seeking our online lending services agree to abide by it. Your organization is attempting an end-run against our legal business by threatening banks and the third-party providers who partner with our tribally-owned enterprises. Internet commerce has been a critical lifeline for geographically-isolated tribes across the United States. Tribal governments that offer online lending suffer from staggering unemployment rates, limited opportunities and geographic isolation. Your organization's attack on our legal and licensed businesses would exact a heavy cost on our people since the revenues generated by our online lending business account, in some instances, for more than 25 percent of our tribal budgets.
As Executive Director of the Native American Financial Services Association (NAFSA) and a citizen of the Muscogee (Creek) Nation, our elected tribal leaders are united against any actions hostile to our tribal government economic development efforts and urge you to cease and desist your discriminatory actions. Native American tribes have had a longstanding government-to-government relationship with the United States, established by Congress and reaffirmed by the United States Supreme Court. Your intimidation of banks and third party payment processors within the ACH network is a direct attempt to circumvent these sovereignty principles and abruptly stop the economic development our tribes have finally seen in recent years.
We will not be bullied, and therefore we direct you to cease and desist these efforts.
posted August 13, 2013 6:00 am edt