'A pimp in the family'

Tribes get into the payday lending game.

  • Payday loan offices are everywhere in New Mexico border towns like Gallup, with 46 small loan licenses.

    Andrew Cullen
  • Farmington, New Mexico has 55 payday loan licenses.

    Jonathan Thompson
  • Farmington, New Mexico has 55 payday loan licenses. Now, some tribes are moving to start their own online small loan operations.

    Jonathan Thompson
 

Mariah Tsosie* needed cash. She worked 32 hours per week for $11 an hour, but her ex-husband often failed to send child support, and Tsosie, who has three kids, fell behind on her bills. She lacked credit cards, and her friends and family were as strapped as she was.

But there were other options in Farmington, New Mexico, where she lived on the edge of the Navajo Nation: Dozens of modest storefronts emblazoned with colorful, beckoning signs – "FastBucks," "Quik Cash" or "Check 'N Go." These so-called "payday lenders" offer payday, short-term installment, car title or tax refund anticipation loans to tide folks over until their next paycheck.

Tsosie picked Cash Loans Now, where friendly staffers assured her that a $200 installment loan would cost her just a few dollars per day. A couple weeks later, she made the first of 25 biweekly payments of $90 each. Thanks to an annualized interest rate of 1,147 percent, about 100 times the average credit card rate, eventually she would have forked out $2,360 – nearly one-tenth of her yearly earnings – just for a tank of gas and some groceries.

Tsosie's plight is common, and so are her extreme loan terms. Finance regulations have deteriorated over the past three decades, and the small-loan industry thrives during tough economic times. Storefronts cluster in areas where traditional banks are few and the working poor are plentiful. And reservation border towns have become a gold mine: Farmington, with just 46,000 people, has 55 active small-loan licenses, outnumbering its fast-food joints; Gallup, New Mexico, has 46, about 40 times the national per capita concentration. Residents of Montana's Native counties took out refund anticipation loans – which target those who are eligible for low-income federal tax credits – at a rate three-and-a-half times that of non-Indian counties; in North Dakota, the ratio was 12:1. Nearly 60 percent of Native Americans use alternative financial services, including payday-type loans, compared to 38 percent of whites.

"Payday lending and pawn shops have established themselves as the primary financial services firms for most Native people," says Sarah Dewees of First Nations Development Institute, a nonprofit in Longmont, Colorado. Millions of dollars in exorbitant interest rates and fees are siphoned from Native Americans' pockets and reservation economic development efforts every year and converted to corporate profits.

It's the latest chapter in the story of the exploitation of Native Americans. There's a surprising plot twist, though: In recent years, some tribes have embraced online payday lending for economic development, just as others have turned to gaming, energy development or other businesses that often victimize tribal members. They've even used their status as sovereign nations to skirt state laws. But as the fight over online lending reaches the courts, some fear that using tribal sovereign immunity to defend the industry could backfire – that the tribes have mortgaged their future for the sake of quick cash.

High Country News Classifieds
  • CONSERVATION ASSOCIATE - OKANOGAN LAND TRUST (NORTH CENTRAL WA)
    Do you enjoy rural living, wild places, and the chance to work with many different kinds of people and accomplish big conservation outcomes? Do you...
  • CARDIGAN WELSH CORGIS
    10 adorable, healthy puppies for sale. 4 males and 6 females. DM and PRA clear. Excellent pedigree from champion lineage. One Red Brindle male. The...
  • A CHILDREN'S BOOK FOR THE CLIMATE CRISIS!!
    "Goodnight Fossil Fuels!" is a an engaging, beautiful, factual and somewhat silly picture book by a climate scientist and a climate artist, both based in...
  • DIGITAL ADVOCACY & MEMBERSHIP MANAGER
    The Digital Advocacy & Membership Manager will be responsible for creating and delivering compelling, engaging digital content to Guardians members, email activists, and social media...
  • DIGITAL OUTREACH COORDINATOR, ARIZONA
    Job Title: Digital Outreach Coordinator, Arizona Position Location: Phoenix or Tucson, AZ Status: Salaried Job ID Number: 52198 We are looking for you! We are...
  • DESCHUTES LAND TRUST VOLUNTEER PROGRAM MANAGER
    The Deschutes Land Trust is seeking an experienced Volunteer Program Manager to join its dedicated team! Deschutes Land Trust conserves and cares for the lands...
  • ASSOCIATE DIRECTOR OF DEVELOPMENT
    The Nature Conservancy in Wyoming seeks an experienced fundraiser to join our team. We're looking for a great communicator who is passionate about conservation and...
  • INDIAN COUNTRY FELLOWSHIP
    Western Leaders Network is accepting applications for its paid, part-time, 6-month fellowship. Mentorship, training, and engaging tribal leaders in advancing conservation initiatives and climate policy....
  • MULESHOE RANCH PRESERVE MANAGER
    The Muleshoe Ranch Preserve Manager develops, manages, and advances conservation programs, plans and methods for large-scale geographic areas. The Muleshoe Ranch Cooperative Management Area (MRCMA)...
  • ARTEMIS PROGRAM MANAGER
    Founded in 1936, the National Wildlife Federation (NWF or Federation) is America's largest and most trusted grassroots conservation organization with 52 state/territorial affiliates and more...
  • ASSISTANT OR ASSOCIATE PROFESSOR OF ENVIRONMENTAL HUMANITIES
    Assistant or Associate Professor of Environmental Humanities Whitman College The Environmental Humanities Program at Whitman College seeks candidates for a tenure-track position beginning August 2023...
  • ANNUAL FUND MANAGER
    Working closely with the Foundation's leadership, the Annual Fund Manager is responsible for the oversight and management of the Foundation's annual operating fund. This is...
  • DATABASE ADMINISTRATOR
    Looking for someone who loves public land and understands the value and importance of data in reaching shared goals as part of a high-functioning team....
  • EXECUTIVE DIRECTOR
    High Country Conservation Advocates (HCCA) in Crested Butte, CO is seeking an enthusiastic Executive Director who is passionate about the public lands, natural waters and...
  • ASSOCIATE DIRECTOR OF VOLUNTEER PROGRAMS
    Are you passionate about connecting people to the outdoors? The Pacific Crest Trail Association (PCTA) is looking for someone with volunteer management experience to join...
  • EXECUTIVE DIRECTOR
    The conservation non-profit Invasive Species Action Network seeks an executive director. We are focused on preventing the human-caused spread of invasive species by promoting voluntary...
  • NEW BOOK: A FEAST OF ECSTATIC VERSE AND IMAGERY
    Dynamic fine art photographer offers use of images to raise funds. Available for use by conservation groups. Contact at www.anecstaticgathering.com.
  • WANTED: TALENTED WRITER
    Write the introduction to A Feast of Ecstatic Verse and Imagery, a book concerning nature and spirituality. Contact at www.anecstaticgathering.com. Writer who works for conservation/nature...
  • MT STATE DIRECTOR- THE WILDERNESS SOCIETY
    The Montana State Director is a member of The Wilderness Society's (TWS) Conservation program team who plays a leading role in advancing the organization's mission...
  • HIGH COUNTRY NEWS EDITORIAL INTERNS
    High Country News, an award-winning magazine covering the communities and environment of the Western United States, is looking for its next cohort of editorial interns....