Nicholas Kamm / AFP / Getty Images Teepees near the Washington Monument at the start of a protest against the Dakota Access pipeline and President Trump.

High interest lenders owned by Native American tribes could take their dispute with the federal government to the Supreme Court, in a case that would pit tribal sovereignty against consumer protection laws. From their offices in Native American lands, the online lenders offer small loans at sky-high interest rates to people across the country. A $500 loan advertised by online lender Great Plains, owned by the Otoe-Missouria Tribe of Indians in Oklahoma, comes with an additional $686.66 in interest and fees to be paid back, on top of the $500 principal — equal to a 328% annual interest rate. Borrowers have complained this puts the lenders in “loan shark” territory, and sought help from the Consumer Financial Protection Bureau, which polices the financial industry. They have also accused the companies of tacking on additional fees, taking money from accounts even after a debt has been paid, and aggressively calling customers to collect payments. But when the regulator began an investigation and instructed the companies to hand over documents, they refused, arguing the CFPB doesn’t have authority over tribally-owned businesses operating from sovereign territory. “We have the longest form of government in this country,” Dante Desiderio, the executive director of the Native American Finance Officers Association, told BuzzFeed News. “But we’re not viewed as an equal government.” Tribal lenders have benefited both from the rise of high interest rate lending — which blossomed as mainstream banks tightened their lending standards after the financial crisis — and from tightening state and federal regulation of such loans. Operating beyond the reach of those regulators, the tribal lenders grew to account for a quarter of the market by 2013, Jeffries analyst John Hecht told Aljazeera America in 2014. Regulators have since attempted to crack down on the lenders, but with a lucrative business at stake, they have promised to take their case all the way — potentially setting important new precedents in the process. The fight between three tribes and the Consumer Financial Protection Bureau escalated to a federal court in California, which sided with the agency in 2014. A federal appeals court also sided with the CFPB, and last week, after losing a bid to get rehearing from the full court, the tribes said they would petition the Supreme Court to hear their case. If the Supreme Court decides to hear it, the lenders will be particularly interested in the position of newly seated justice Neil Gorsuch, a conservative who has expressed a long-standing skepticism of the modern regulatory state. The powers of the Consumer Financial Protection Bureau have not been tested before the Supreme Court since its founding almost six years ago, and it it is deeply unpopular with Republicans and conservatives, who would relish a judgement restricting the scope of its authority. Gorsuch also saw dozens of cases concerning tribal law and sovereignty during his tenure on the 10th Circuit Court of Appeals, which oversees several states with large Native American populations.

“I’m pretty sure that Neil Gorsuch has more experience in Indian law cases than any other Supreme Court justice,” said Matthew Fletcher, a professor and Native American law expert at Michigan State University.

Brendan Smialowski / AFP / Getty Images Neil Gorsuch listens as President Trump speaks during a ceremony in the Rose Garden of the White House.

Two Native American groups, the Native American Rights Fund and the National Congress of American Indians, wrote a letter in support of Gorsuch’s nomination, saying that Gorsuch had voted “in favor of tribal interests” far more often than his predecessor, Antonin Scalia. “Indian tribes will likely have a better chance on their cases with Gorsuch on the Court,” they wrote.

The tribes have created their own oversight systems for their financial businesses, in the spirit of co-regulation with the US government, said Gary Davis, the executive director of Native American Financial Services Association, which represents nine tribes that operate financial companies, including two of those involved in the current dispute. The group's chairman, John Shotton, is a member of Otoe-Missouria, which own Great Plains Lending. “However, what we have seen is that tribes in the space have been labeled ‘bad actors’ by the CFPB and state regulators at a level disproportionate to the number of actual complaints received by any regulatory body,” he told BuzzFeed News. “Now, these three tribes find themselves engaged in a very expensive lawsuit when there is no reason to suggest that the co-regulatory model was ineffective." Echoing a defense favored by the payday lending industry, Davis argued that tribal lending companies are often the only financial institutions willing to serve Americans who don’t qualify for traditional credit lines from big banks. “These are not bad citizens,” he said of the industry’s customer base. “Folks out there are aware of what this is doing to help American citizens.”

Suzanne Plunkett / Reuters