Calif. Court Nixes State Challenge To Tribes' Payday Lending

Law360, New York (January 21, 2014, 8:24 PM EST) -- A California appellate court affirmed Tuesday that state regulators are powerless to challenge two out-of-state Indian tribes’ allegedly exploitative payday lending businesses, ruling that sovereign immunity protects the tribally chartered corporations.

In a published opinion, a unanimous panel upheld a trial order that dismissed for lack of subject matter jurisdiction a complaint from the commissioner of the California Department of Corporations. Like the trial court, the panel found that the companies functioned as an “arm of the tribe” and were off-limits to such litigation.

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