WASHINGTON – On January 18, 2018, the CFPB announced the dismissal of a lawsuit brought against the economic development arms of the Habematolel Pomo of Upper Lake, a sovereign Indian Nation based in California. The Tribe had retained Wilkinson Stekloff in February 2017, shortly after the Tribe was first contacted by the CFPB, to serve as lead counsel in the event the Bureau decided to bring an enforcement action against its economic development arms, which provide loans over the internet to customers throughout the country who freely consent to tribal jurisdiction as a condition of obtaining their loans.
In April 2017, the CFPB sued the tribal arms in the U.S. District Court for the Northern District of Illinois, claiming that the loans they originate violate federal law and regulations because they allegedly violate the laws of several different states. Wilkinson Stekloff’s team moved to transfer the case to the U.S. District Court for the District of Kansas because the Bureau’s claims had no relation to Illinois. That motion was granted in September 2017.
Wilkinson Stekloff then moved to dismiss the complaint on several grounds, including that the CFPB’s complaint ignored federal law, which requires the Bureau to treat tribes, like states, as co-regulators; pressed legal theories the Bureau had no authority to bring; disregarded several key precepts of federal Indian law; and ignored that the loans at issue are subject to tribal law. The motion also explained in depth that the Tribe’s economic development efforts are an essential part of its efforts to obtain political self-determination and economic self-sufficiency. Five parties filed amicus briefs in support of Wilkinson Stekloff’s motion—the Tribe’s Consumer Financial Services Regulatory Commission; the State of Oklahoma; the State of New Mexico (whose laws the CFPB was purporting to enforce through its complaint); the National Congress of American Indians; and the Native American Financial Services Association.
Rather than respond to the filings, the Bureau announced that it was voluntarily dismissing the case, representing a significant win for Wilkinson Stekloff’s clients. Wilkinson Stekloff’s team was led by Beth Wilkinson, Brant Bishop, Lori Alvino McGill, and Rakesh Kilaru. The litigation team also included Charlie Galbraith, Venus Prince, and Larry Roberts of Kilpatrick Townsend & Stockton LLP; Paul Croker of Armstrong Teasdale, LLP; and John Williams of Conner & Winters, LLP.