Tribe-Owned Lender Charges 550% Interest, Class Action Says

UPDATE: On September 20, 2019, the Tribe-Owned Lender class action lawsuit was dismissed.  

A class action lawsuit attacks an internet lending company’s practice of granting high interest loans and accuses the company of using tribe sovereign immunity to dodge lending law.

Plaintiffs Victoria Renee McKoy and Desire Wright Lovins claim that they were granted short term loans from Big Picture Loans LLC, and were not told that they would be charged an interest rate of more than 550 percent.

They say this interest rate was automatically withdrawn from their bank accounts.

The consumers claim that this practice violates Georgia’s Payday Lending Act, the Racketeer Influenced and Corrupt Organizations Act, and other laws.

McCoy and Lovins say the company takes advantage of people who need to borrow money quickly, who are often in desperate straits, and charges them ridiculously high interest rates, trapping them into debt with the company.

The plaintiffs seek to represent a Class of Georgia consumers who borrowed with Big Picture after July 3, 2014.

The Big Picture Loans class action lawsuit seeks reimbursement for putative Class Members’ debts, for debts to be voided, and for an injunction to bar the company from continuing its allegedly unlawful business practices.

McKoy and Lovins also claim that Big Picture Loans unlawfully uses the sovereignty of the Lac Vieux Desert Band of Lake Superior Chippewa Indians to get out of complying with United Staes lending laws.

The plaintiffs claim that though the company states that they are Native American-owned, most of the profits go to non-tribal members, and the company should not be considered under tribal sovereignty.

The lending company business practices class action lawsuit accuses Big Picture of using a “rent-a-tribe” business model to get out of U.S. laws, a tactic that they claim other lending agents, notably short term loan and “payday loan” companies have used in the past.

The Big Picture payday loans class action lawsuit states that “payday lenders such as Big Picture…claim that they are above the law because they are supposedly wholly owned by a Native American tribe. However, lurking in the shadows, there is a complicated corporate management structure attempting to hide the fact that non-tribal members reap the overwhelming majority of profits.”

McKoy and Lovins alleges that though Big Picture was purchased by Ascension Technologies in 2016, and Ascension is owned by Tribal Economic Development Holdings, its business is conducted not on tribal land, and conducted without daily involvement from the Lac Vieux Desert Band of Lake Superior Chippewa Indians.

In a statement made to Law360, Lac Vieux Desert Chairman James William Jr. shot back at the Big Picture lending practices lawsuit and stated that Big Picture Loans and Ascension Technologies are in fact owned and operated entirely by the tribe.

He says that “accusing our tribe of selling our sovereignty is not only insensitive and disrespectful to our tribe, it is outright offensive to all of Indian Country because it furthers the erroneous beliefs that tribes are incapable of owning and operating sophisticated businesses.”

McKoy and Lovins are represented by Charles J. Cole and Craig Bertschi of McRae Bertschi & Cole LLC and by Michael A. Caddell, Cynthia B. Chapman, John B. Scofield Jr. and Amy E. Tabor of Caddell & Chapman.

The Big Picture Loans Business Practices Class Action Lawsuit is Victoria McKoy, et al. v. Big Picture Loans LLC, et al., Case No. 1:18-cv-03217, in the U.S. District Court for the Northern District of Georgia.