TLEs, anticipating action that is such will desire to think about two distinct strategic reactions.
Regarding the one hand, looking to insulate by themselves from direct assaults because of the CFPB underneath the “unfair” or “abusive” requirements, TLEs might well amend their company methods to create them into line using the demands of federal consumer-protection guidelines. Numerous TLEs have previously done this. It continues to be a available concern whether also to what extent the CFPB may look for to use state-law violations as a predicate for UDAAP claims.
Having said that, hoping to buttress their resistance status against state assaults (perhaps as a result of provided CFPB-generated information regarding tribes), TLEs to their relationships might well amend their relationships with regards to financiers so the tribes have actually genuine “skin into the game” instead of, where relevant, the simple directly to exactly exactly what amounts to a tiny royalty on income.
There is no assurance that such steps that are prophylactic TLEs will provide to immunize their non-tribal company lovers. The”action” has moved on from litigation against the tribes to litigation against their financiers as noted below with respect to the Robinson case. Due to the fact regards to tribal loans will stay unlawful under borrower-state legislation, non-tribal events that are considered to function as “true” lenders-in-fact (or to have conspired with, or even to have aided and abetted, TLEs) may end up subjected to significant obligation. In past times, direct civil procedures against “true” loan providers in “rent-a-bank” transactions have proven fruitful while having led to significant settlements.
To be clear, state regulators don’t need to join TLEs as defendants in order to make life unpleasant for TLEs’ financiers in actions against such financiers.