3rd Circ. Says Tribal Lender Can't Arbitrate Interest Rate Suit

Law360 (July 14, 2020, 8:52 PM EDT) -- The Third Circuit on Tuesday upheld a Pennsylvania district court's decision barring a tribal lender from arbitrating claims that it maintained unlawful interest rates, agreeing that the lender's arbitration agreement is unenforceable.

American Web Loan Inc., operated by the Otoe-Missouria Tribe of Indians in Oklahoma, had an arbitration clause in its loan agreement that said only tribal law applies in arbitration, court records show. The agreement also contends that "any dispute ... related to this agreement will be resolved by binding arbitration."

The circuit panel found Tuesday that these parameters illegally strip AWL customers' rights to bring federal claims against it,...

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