'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
  • CONSERVATIONIST? IRRIGABLE LAND?
    Stellar seed-saving NGO is available to serious partner. Package must include financial support. Details: http://seeds.ojaidigital.net.
  • EXPERT LAND STEWART
    Available for site conservator, property manager. View resume at http://skills.ojadigital.net.
  • ANCESTRAL LANDS ADMINISTRATIVE MANAGER
    Starting Salary: Grade C, $19.00 to 24.00 per/hour Location: Albuquerque or Gallup, NM Status: Full-Time, Non-Exempt Benefit Eligible: Full Benefits Eligible per Personnel Policies Program...
  • GRAND CANYON DIRECTOR
    The Grand Canyon director, with the Grand Canyon manager, conservation director, and other staff, envisions, prioritizes, and implements strategies for the Grand Canyon Trust's work...
  • ADMINISTRATIVE ASSISTANT
    Great Old Broads for Wilderness seeks a part-time Administrative Assistant to support the organization's general operations. This includes phone and email communications, office correspondence and...
  • HISTORIC LODGE AND RESTAURANT - FULLY EQUIPPED
    Built in 1901, The Crazy Mountain Inn has 11 guest rooms in a town-center building on 7 city lots (.58 acres). The inn and restaurant...
  • ONE WILL: THREE WIVES
    by Edith Tarbescu. "One Will: Three Wives" is packed with a large array of interesting suspects, all of whom could be a murderer ... a...
  • PROGRAM DIRECTOR, SALAZAR CENTER FOR NORTH AMERICAN CONSERVATION
    The Program Director will oversee the programmatic initiatives of The Salazar Center, working closely with the Center's Director and staff to engage the world's leading...
  • WILDEARTH GUARDIANS - WILD PLACES PROGRAM DIRECTOR
    Salary Range: $70,000-$80,000. Location: Denver, CO, Portland, OR, Seattle, WA, Missoula, MT or potentially elsewhere for the right person. Application Review: on a rolling basis....
  • RIVER EDUCATOR/GUIDE + TRIP LEADER
    Position Description: Full-time seasonal positions (mid-March through October) Organizational Background: Colorado Canyons Association (CCA) is a 10 year old nonprofit organization fostering community stewardship of...
  • BOOKKEEPER/ADMINISTRATIVE ASSISTANT
    Position Description: Part-time, year-round bookkeeping and administration position (12 - 16 hours/week) $16 - $18/hour DOE Organizational Background: Colorado Canyons Association (CCA) is a 10...
  • LAND STEWARD
    San Isabel Land Protection Trust seeks a full-time Land Steward to manage and oversee its conservation easement monitoring and stewardship program for 42,437 acres in...
  • EXECUTIVE DIRECTOR
    Ventana Wilderness Alliance is seeking an experienced forward-facing public land conservation leader to serve as its Executive Director. The mission of the Ventana Wilderness Alliance...
  • COMMUNICATIONS AND DEVELOPMENT DIRECTOR
    The Quivira Coalition (www.quiviracoaltion.org) is a Santa Fe-based nonprofit that builds resilience on arid working lands. We foster ecological, economic, and social health through education,...
  • GRANT WRITER
    "We all love this place we call Montana. We believe that land and water and air are not ours to despoil, but ours to steward...
  • DEVELOPMENT DIRECTOR
    The Development Director is responsible for organizing and launching a coherent set of development activities to build support for the Natural History Institute's programs and...
  • WILDLIFE PROJECT COORDINATOR
    Founded in 1936, the National Wildlife Federation (NWF or Federation) is America's largest and most trusted grassroots conservation organization with 53 state/territorial affiliates and more...
  • EXECUTIVE DIRECTOR
    The Cinnabar Foundation helps protect and conserve water, wildlife and wild lands in Montana and the Greater Yellowstone Ecosystem by supporting organizations and people who...
  • OLIVERBRANCH CONSULTING
    Non-Profit Management Professional specializing in Transitional Leadership, Strategic Collaborations, Communications and Grant Management/Writing.
  • GREAT VIEWS, SMALL FOOTPRINT
    Close to town but with a secluded feel, this eco-friendly home includes solar panels, a graywater reuse system, tankless hot water, solar tubes, and rainwater...