Online payday lenders pose serious risks for consumers. Yet, for years, these lending companies have skirted state regulation by pleading tribal sovereign immunity. Under this doctrine, entities that are so affiliated with tribal nations that they are “an arm of the tribe” are immune from suit. Without comprehensive federal regulation, tribal sovereign immunity has served as a trump card at the pleading state for online payday lenders. The Note argues that change may be on the horizon. In the recent decision Gingras v. Think Finance, the Second Circuit held that the Supreme Court’s holding in Michigan v. Bay Mills Indian Community permitted injunctive suits against tribal affiliates, acting in their official capacity off reservation, based on state law. If other courts adopt the Second Circuit’s reasoning, states and consumers will be far better equipped to tackle online payday lenders.
Max King, Tribal Lending After Gingras, 19 Duke Law & Technology Review 122-138 (2021)