What is a tribal loan?
A tribal loan is a consumer loan made by a lending business owned by a federally recognized Native American tribe. Big Picture Loans is one example: it is a wholly owned subsidiary of Tribal Economic Development Holdings, LLC, which is itself an economic arm of the Lac Vieux Desert Band of Lake Superior Chippewa Indians. Revenue supports the tribe’s government and members.
Which law applies?
Tribes are sovereign governments. Tribal lenders typically state that their loans are governed by tribal law and applicable federal law, and that state interest-rate caps don’t apply. Big Picture Loans says exactly this in its disclosures and adds that your state’s laws may be more favorable to you.
Federal consumer laws such as the Truth in Lending Act still require clear cost disclosures. Whether a given state can enforce its own rate limits against a tribal lender is a question courts have answered differently depending on the facts.
Sovereign immunity in plain English
Sovereign immunity can shield a tribe and its genuine economic arms from certain lawsuits. Courts look at how the business was created, who controls it and who benefits from it. In Williams v. Big Picture Loans, the Fourth Circuit held in 2019 that the lender’s entities could share the tribe’s immunity. Borrowers then pursued claims against non-tribal individuals and companies involved in the lending operation. See our lawsuit timeline.
Are tribal lenders regulated?
Yes, but by the tribe. Big Picture Loans is licensed by the Lac Vieux Desert Tribal Financial Services Regulatory Authority and operates under the tribe’s Consumer Financial Services Regulatory Code. Complaints go through a tribal dispute resolution procedure. You can also file a complaint with the CFPB.
Risks to weigh
- Cost. Triple-digit APRs are common.
- Fewer state remedies. Your state regulator may be unable to step in.
- Dispute process. Disputes may follow tribal procedures or arbitration terms rather than your local courts.
- Automatic payments. Bank drafts can cause overdrafts if timing slips.
Checklist before borrowing from a tribal lender
- Read the governing-law and dispute sections of the agreement.
- Confirm the lender’s tribal license on its website.
- Write down the total of payments and compare it with a credit union or state-licensed option.
- Know how to revoke ACH authorization if needed; your bank can explain the process.
The Big Picture Loans tribal dispute process, step by step
The lender’s FAQ describes the tribe’s procedure under Section 9 of its Consumer Financial Services Regulatory Code:
- Complain to the lender first. Send a written complaint; the lender looks into it and proposes a resolution.
- Request administrative review. If you disagree, write to the Tribal Financial Services Regulatory Authority, P.O. Box 249, Watersmeet, MI 49969, within 90 days of the lender’s determination.
- Attend a hearing. The Authority investigates and offers a hearing in person or by phone within 60 days of receiving your request. You may bring a lawyer at your own expense.
- Receive a written decision. The Authority issues a decision and order.
- Appeal to Tribal Court. You can petition the Tribal Court within 90 days of that decision. The lender says Tribal Court opinions are final and not subject to appeal.
Our complaints walkthrough includes a sample letter and what to attach.
Key court decisions on tribal lending
Williams v. Big Picture Loans (Fourth Circuit, 2019)
The court held Big Picture Loans and Ascension Technologies are arms of the Lac Vieux Desert Band and immune from the borrowers’ suit, using factors such as the entities’ creation, purpose, control, the tribe’s intent and financial ties.
CFPB v. Great Plains Lending (Ninth Circuit, 2017)
The court held that tribal lenders must comply with CFPB investigative demands because the Consumer Financial Protection Act is a generally applicable law that doesn’t expressly exclude tribes.
Together these cases show the two sides of tribal lending: strong protection from many private lawsuits, but not a free pass from federal oversight.
How to tell if a loan is a tribal loan
- The website or agreement names a federally recognized tribe as the owner.
- It lists a tribal regulatory authority as the licensing body.
- The agreement says it’s governed by tribal law and applicable federal law.
- Disputes follow a tribal procedure rather than your state courts.
- The lender says transactions are deemed to occur on tribal land.
Tribal loans vs. state-licensed loans
| Tribal loan (e.g., Big Picture Loans) | State-licensed loan | |
|---|---|---|
| Who licenses it | Tribal regulator | Your state regulator |
| State rate caps | Lender says they don’t apply | Apply |
| Where complaints go | Lender, tribal authority, Tribal Court; CFPB | Lender, state regulator, courts; CFPB |
| Typical cost | Often triple-digit APR | Limited by state law |
Questions to ask before signing a tribal loan
- What is the total of payments, in dollars?
- Which law governs the agreement, and where do disputes go?
- Is there any prepayment penalty? (Big Picture Loans says no.)
- How can I change or stop automatic payments?
- Is this lender available in my state, and is there a licensed alternative?
Who runs Big Picture Loans?
The Lac Vieux Desert Band formed two businesses under tribal law: Big Picture Loans, the lending entity, and Ascension Technologies, which provided loan-related services. According to an analysis of the Fourth Circuit decision, Big Picture employed 15 tribal members, while most of Ascension’s 31 employees, including its president, were not tribal members. The lender says it was created for the benefit of the tribe and operates under tribal law.
If you’re contacted about an old tribal loan debt
- Ask who is contacting you and on whose behalf, and get it in writing.
- Compare the amount with your own records and loan agreement.
- Don’t pay by gift card, wire or cryptocurrency.
- If you borrowed from Big Picture Loans or Castle Payday between June 22, 2013 and May 1, 2024, read our lawsuit explainer and consider contacting class counsel.
- Talk to a legal aid office if you’re unsure of your rights.
Tribal lending terms, explained
- Federally recognized tribe
- A tribe with a government-to-government relationship with the United States.
- Tribal regulatory authority
- The tribe’s own agency that licenses and oversees lenders. For Big Picture Loans, the Lac Vieux Desert Tribal Financial Services Regulatory Authority.
- Choice-of-law clause
- The part of an agreement that says which law governs it.
- Forum-selection clause
- The part that says where disputes must be heard.
- Administrative review
- The tribal regulator’s second look at a lender’s complaint decision.
Frequently asked questions
Are tribal loans legal?
Tribal lending is a recognized business model, but its reach is contested. Some courts and state regulators have challenged tribal lenders that charge rates above state limits. Results depend on the case.
Can a tribal lender sue me?
A lender can generally pursue collection under the terms of your agreement. Read the dispute and arbitration clauses and consider talking to a legal aid office if you are contacted about a debt.
Can I take a tribal lender to state court?
Tribal lenders usually require disputes to follow tribal procedures, and courts have often upheld their immunity. Get legal advice for your situation.
Not sure this is your best option? Seeing what other lenders offer takes a few minutes and costs nothing. Compare my options.
Sources
- Big Picture Loans homepage and disclosures: https://www.bigpictureloans.com/
- Galloway v. Martorello settlement website: https://www.bplsettlement.com/
- CFPB: Consumer complaint portal: https://www.consumerfinance.gov/complaint/
- Big Picture Loans FAQ: https://www.bigpictureloans.com/faq/
- Big Picture Loans Tribal Dispute Resolution Procedure: https://www.bigpictureloans.com/tribal-dispute-resolution-procedure
- Williams v. Big Picture Loans (4th Cir. 2019), Justia: https://law.justia.com/cases/federal/appellate-courts/ca4/18-1827/18-1827-2019-07-03.html
- CFPB v. Great Plains Lending (9th Cir. 2017), Justia: https://law.justia.com/cases/federal/appellate-courts/ca9/14-55900/14-55900-2017-01-20.html
- PilieroMazza: Williams v. Big Picture Loans analysis: https://www.pilieromazza.com/key-ruling-on-native-american-sovereign-immunity-stands-for-now/