How Some Payday Lenders Charge Over 700% on Loans
At one point, a consultant pitching the business to the tribe offered some blunt advice about the very business he was pitching. “My advice is don’t take out a payday loan,” the consultant said, according to a recording of the meeting obtained by CNBC. “Let the white people take out the loan and let us make money off them.”
Ultimately, the decision split tribal leaders, and the meeting came to a head. Tribal President Sandy Two Lance failed to get the support she needed to sign the proposed contract. On the tape of the meeting, however, she says she will sign the deal anyway. “I know you are going to say you can’t do that without the executive board,” she says on the recording. “But I’m going to do it and see where we go. I’m expecting restraining orders after I sign this.”
Another member of the tribal leadership, however, said he was under the impression that the contract was not valid, because the top leaders hadn’t agreed to the deal. And one said he was shocked when CNBC called and pointed out that the payday lending business, FastMoneyStore.net, says on its website that it is affiliated with the Wakpamni District.
“We were not aware of this payday lending project on the Internet until you brought it to our attention,” said Richard Little Hawk, the secretary of the Wakpamni District. “We believe that a fraud has been committed on us and these individuals pulled a fast one on us.”
Here’s where the situation gets even more murky. CNBC contacted tribal president Sandy Two Lance who agreed that her signature on the payday lending contract had not been made according to tribal procedure, but she said she shredded the agreement when other members of the tribe complained. Richard Little Hawk said he has not spoken to Sandy Two Lance in months, and does not know where the tribal president is.
Despite the tribal leadership chaos, the website of FastMoneyStore.net explains that it charges annual percentage rates of more than 782 percent. And it says in fine print that it “is the DBA for the Wakpamni Lake Community of the Oglala Sioux Tribe, a Sovereign Nation. Loans made by Fast Money Store are serviced by Cash Cloud LLC.”
Officials listed in corporate records as affiliated with Cash Cloud LLC did not respond to requests for comment. One of those listed in Arizona state incorporations records as a member or manager of Cash Cloud, Richard Corbridge, said he was not able to comment, and referred CNBC to a man named Chad Jardine, who Corbridge said was the CEO of the firm. However, Jardine left a voice mail for a reporter saying, “I am not the CEO of Cash Cloud.”
He did not respond to a follow up telephone call.
-By CNBC's Eamon Javers