One reason tribes got caught up in lending business schemes

Boozhoo ("hello" in Ojibwe) and miigwech ("thank you") for reading the First Nations Wisconsin newsletter.

Tribal officials with the Lac du Flambeau Ojibwe Nation in northern Wisconsin found themselves in hot water recently for partnering with the proprietors of a nationwide payday loan scheme.

The lending businesses were mostly owned and operated by nontribal members and it’s important to note that a big chunk of the profits did not go to the tribe.

The nontribal profiteers paid the tribe for the right to use it sovereignty status to avoid having to follow state and local laws regarding interest rates, so they could charge exorbitant amounts of interest.

For its part in the business venture the Lac du Flambeau Tribe was ordered in federal court to pay $2 million as part of a lawsuit settlement agreement, which it has agreed to do.

The court-ordered settlement also called for forgiving about $1.4 billion in loans by customers.

Lac du Flambeau is not the only tribe to have become involved in these lending ventures. There have been multiple lawsuits against multiple tribes across the country and their business partners for at least the last 10 years.

With a lack of investment and business venture opportunities in Indian Country, some tribes are having to find creative ways to diversify their revenue and not be so dependent on gaming.

This revenue helps pay for sorely needed infrastructure, healthcare, education and housing on reservations. Federal funding only pays for a portion of these needs.

Being too dependent on one industry, such as gaming, is never a good business model — as tribes learned during the pandemic.

During the relatively short period that casinos were shut down, typically a few months, the tribes essentially lost their only source of revenue, which had devastating effects on services across reservations in Wisconsin. Staff were laid off in all areas, which had a ripple effect on the entire region.

The Oneida Nation near Green Bay seems to have some of the most success in diversifying its revenue.

The tribe owns and operates seven Oneida One Stop convenience stores and gas stations; owns Bay Bank with three branch locations; and leases land to retailers, such as Walmart and Festival Foods, as well as light industrial businesses.

But even with all that and other business ventures, even Oneida officials recently acknowledged that more than 80% of its revenue still comes from gaming.

If you like this newsletter, please invite a friend to subscribe to it . And if you have tips or suggestions for this newsletter, please email me at fvaisvilas@gannett.com .

About me

I'm Frank Vaisvilas, the Indigenous affairs reporter for USA TODAY NETWORK-Wisconsin based at the Milwaukee Journal Sentinel . I cover Native American issues in Wisconsin. You can reach me at 815-260-2262 or fvaisvilas@gannett.com , or on Twitter at @vaisvilas_frank .

This article originally appeared on Milwaukee Journal Sentinel: One reason tribes got caught up in lending business schemes