Tribal Lender Exits Minnesota Amid Allegations of Illegally High Interest Rates
Tribal Lender Exits Minnesota Amid Allegations of Illegally High Interest Rates
The Lac du Flambeau tribe of Wisconsin settled a civil suit filed by Minnesota’s attorney general that alleged its triple-digit interest rates violated state caps. The tribe is under increasing legal pressure nationally over its lending practices.
The move by Minnesota to cut off lending companies controlled by LDF comes shortly after ProPublica reported extensively in August and September on LDF’s loan operations, finding that over the past decade, the tribe has grown to become one of the leading players in the tribal lending industry. Its loans contribute to the debt people shoulder throughout the country. A ProPublica analysis found companies owned by the LDF tribe showed up as a creditor in roughly 1 out of every 100 bankruptcy cases sampled nationwide.
The Minnesota attorney general’s office reported in its federal court filing that the state had received many consumer complaints about LDF Holdings, the tribe’s lending arm, that described extreme hardship caused by “continuing demands for payment of excessive interest.”
It gave the example of a Burnsville resident who took out a $1,398 loan from the LDF company Lendumo in December 2023 at an annual percentage rate of 795%. The loan snowballed to $8,593.
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800% APR is such absolute bullshit.
Like, even the mob would front you some cash with a lower rate.