“Rent-a-tribe” setups often involve two parties — a little (couple hundred user), but lawfully founded, indigenous American community and a non-native home loan company that really handles the complete monetary an element of the deal. In certain methods, the model can be an improvement of the classic: “rent-a-bank. ” About 20 years ago — whenever lending that is short-term began showing up on the state level — a way employed by some loan providers to bypass state regulations on payday would be to pass their loans via a nationally chartered bank these were “partnered” with, thus exempting them from state banking rules.
The 2000s saw a wave of legislators and regulators catching on, and by 2010 the process had been more or less stamped out through a variety of legislative actions while“rent-a-bank” was popular in the late 90s. (more…)