Fort Worth, TX company to pay $ 39.7 million in lawsuit for payday loans


In times of desperation or financial uncertainty, a payday loan can be a way to get money quickly, provided the applicant accepts the terms and conditions set by the lender.

According to lawsuits over the past few years across the country, Fort Worth’s Think Finance LLC has capitalized on people’s vulnerabilities by repeatedly insuring loans with interest rates sometimes above 15 times the legal limits. And to fight the allegations, the company has used Native American tribal laws as a shield, according to the lawsuits.

The company, which was formed in 2001 as Think Finance Inc. and declared bankruptcy in 2017, claims to be a financial services company providing software technology, analytics, and marketing services to clients. But, according to the lawsuits, the entity has embarked on an illegal “rent-a-tribe” payday loan program, adopting Native American tribes as partners to evade federal and state laws.

The company in 2016 was accused of being part of a diet with Plain Green LLC, a lender “owned by the Chippewa Cree tribe of the Rocky Boy Indian Reservation, Montana,” according to a complaint filed in Vermont. In 2018, according to a complaint in North Carolina, Think Finance was accused of grant loans with illegal interest rates through an entity called Great Plains Lending.

This entity was said to have been created by Think Finance and former CEO Kenneth E. Rees, with ties to a tribe in Oklahoma. Rees is currently the CEO of Elevate Credit Inc., which has offices in Fort Worth and Dallas.

During the lawsuits – filed in Vermont, Pennsylvania, Florida, California and North Carolina – Think Finance and other defendants argued that they were exempt from state and federal laws because of their connection to a tribe recognized by the federal government.

But the Fort Worth firm has settled the matter, according to a nationwide consumer regulation submitted to a Dallas court earlier in June.

Think Finance will pay around $ 39.7 million to 21 plaintiffs, according to the settlement. Plus, all outstanding loans will be canceled, meaning customers with overdue fees will no longer have to worry about paying them off.

“The settlement fully and definitively resolves claims and disputes between claimants, debtors and other parties to the settlement,” claimants’ attorney, Leonard A. Bennett, said in the document.

Several messages left at Think Finance were not answered. Rees also did not respond to a request for comment.

Additionally, Think Finance’s attorney – Hunton Andrews Kurth, who has an office in Dallas – did not respond to a request for comment.

The settlement has been submitted to the US North District Bankruptcy Court in Dallas. The court and all parties involved must approve the document before it becomes official.

Predatory lending practices

In July 2011, Vermont resident Jessica Gingras borrowed $ 1,050 from an entity called Plain Green LLC at an interest rate of 198.17% per annum, or per annum, according to a complaint filed in Vermont. She repaid the loan.

But, according to the lawsuit, she kept coming back in need of loans. And the sky-high tariffs stuck.

During the years 2011, 2012 and 2013, Gingras took out loans ranging from $ 1,250 to $ 3,000, with rates of up to 371%, according to the lawsuit. The legal limit in Vermont was then 24 percent. She was only able to repay part of the loans.

Like all applicants seeking a loan from Plain Green, Gingras had signed agreements to receive the loans, according to the lawsuit. These documents, according to the lawsuit, stressed that any disagreement between the lender and the borrower “will be resolved by arbitration in accordance with Cree Chippewa tribal law.”

The agreements state that “neither this Agreement nor the Lender is subject to the laws of any state of the United States,” according to the lawsuit.

“The Cree Tribal Courts of Chippewa have the power to overturn the arbitrator’s decision if it does not comply with tribal law,” the plaintiffs said in the lawsuit.

Victims of the Great Plains loan program have faced similar obstacles, according to court documents. The organization claimed it was formed under the laws of the Otoe-Missouria Indian Tribe and was located at the tribe’s headquarters in Red Rock, Oklahoma, according to the North Carolina complaint.

In “rent-a-tribe” programs, cooperating Native American tribes exchange sovereign immunity for a percentage of their income, according to the complaint.

The federally recognized Native American tribes – which predate the United States Constitution – are sovereign entities separate from the United States government. Congress, however, can step in to rule on tribal issues if it chooses to do so.

These sovereign tribes are protected “from further encroachment by other rulers, such as states,” according to the Indian Affairs Division of the US Department of the Interior.

The defendants argued that since they act as an “arm of the tribe,” federal and state laws do not apply to them. But the plaintiffs argued that the defendants engaged in behavior outside Indian lands, which means state and federal laws apply.

Over 30 states including Texas To allow payday loans with no interest rate cap, according to Washington DC and 18 states, including Vermont, have imposed rate caps.

The first lawsuit against Think Finance’s tribal rental program was filed in Pennsylvania in 2014, according to the settlement. Complainants in other states then followed.

In October 2017, Think Finance filed for Chapter 11 bankruptcy with the U.S. North District Bankruptcy Court in Dallas and various consumer disputes were transferred to court, according to the settlement.

The plaintiffs and Think Finance are said to have spent several months agreeing on “essential terms” for the settlement of consumer borrowers, and many more months debating individual disputes.

The rule

The settlement establishes a trust that will carry the funds that will be allocated to the 21 plaintiffs.

Think Finance agreed to transfer all of the money from its escrow account – $ 39,695,589 – into the trust, according to the settlement. The other parties named in the settlement will contribute $ 15.95 million to the trust.

Applicants will receive checks for their share of the trust in the mail, according to the regulations. Two levels of plaintiffs are described in the settlement – one who will receive 70% of the trust proceeds and the other who will receive 30% of the proceeds.

A planned website and automated toll-free telephone line will allow complainants to check the status of the settlement and any awards, depending on the settlement.

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