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Barry Brandon is executive director of the Native American Financial Services Association.

DOJ's 'Operation Choke Point' Infringes on Tribal Trust

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Tribal sovereignty is the most valuable of all American Indian assets. Tribal governments' inherent rights of self-government and self-determination are the foundation of tribal communities and tribal identity.

Tribal governments have worked hard to strengthen our partnerships with the federal government through self-determined economic development and the co-creation of new institutions, including the National Indian Gaming Commission, housed within the Department of Interior.

The relationship between tribal governments and the federal government goes beyond the DOI, however, to include Congress and the White House, which has a long-running formal policy of consultation with tribal governments. These complex and interdependent relationships, enshrined in the U.S. Constitution, are summarized as the "trust relationship" or even "trust responsibility," so named because it captures the special fiduciary responsibility by the federal government towards tribes.

Recently, however, the relationship between some tribal governments and a particular division of the federal government, located in the Department of Justice, has been severely damaged by an internal campaign known within the DOJ as "Operation Choke Point."

This behind-the-scenes attempt to shut down legal tribal businesses has disrupted our long-held tribal-federal partnership. It represents a total departure from more than a century of respect for, and engagement with, tribal governments as partners and co-regulators on issues ranging from law enforcement to economic development to education.

At issue in the short term are the legal, licensed and regulated e-commerce lending services that many tribes have established. What is at stake, however, is the long-term viability of the trust relationship itself.

In other economic ventures such as gaming, tribal governments have found strong opposition from state governments who see us as a competitor or, worse yet, as a willful violator of state regulations. It thus disturbs tribal governments that, in the case of legal online lending, the DOJ our supposed federal partner continues to attack and undermine our legal businesses.

As a member of the "federal family," the DOJ has a mandate to exercise their trust responsibility to tribal governments. They have a responsibility to do this in a way that protects tribal businesses engaging in honest business practices, as ours do.

Like gaming enterprises operated by tribal governments, our online lending businesses are legally owned, operated and regulated under tribal regulatory authority. They are created pursuant to tribal law and our authority to create them is acknowledged in the Dodd-Frank Act. As with gaming, we have created partnerships with the federal government and federal regulatory bodies to ensure that consumers across the country have access to the services they need in a way that also drives economic growth on reservations.

Thus, we support and echo the concerns of House Oversight Committee Chairman Darrell Issa, as reported in American Banker, that the Justice Department's dragnet does appear to be an effort to stomp out all short-term lending, including legal tribal government-owned enterprises.

In light of the fact that the Dodd-Frank Act treats tribes as states in the context of financial services, tribal governments have created the Native American Financial Services Association to collectively establish a model for self-regulation, and we have sought meaningful consultation with federal regulatory bodies to strengthen and operationalize our relationship as co-regulators.

In an election year, however, the successful negotiation of a co-regulatory environment is not deemed as newsworthy as "choking off" legal tribal businesses. It is this abandonment of the federal-tribal trust relationship that has allowed "Operation Choke Point" to run amok and allowed legislators to blindly prop it up.

In the wake of this abandonment, rather than focusing on the true bad actors in the industry, "Operation Choke Point" is having the opposite effect. As the DOJ's blanket actions continue to choke the illegal businesses, they also drown the legal ones, like ours, leaving consumers further underserved and tribal communities further isolated. At NAFSA, we will continue fighting to strengthen our tribal laws and regulations, work with our federal partners and educate state governments about our legal right to offer these businesses.

We can only hope that the DOJ, as a member of the "federal family," will abide by their obligation to consult with us before taking unilateral actions, especially those that do not consider our special "trust" relationship and damage the fragile economic strides we are seeking on isolated reservation lands.

Barry Brandon is executive director of the Native American Financial Services Association.

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