The payday lending enterprises are not operated out of the settlement, and Habematolel Pomo members interviewed on a recent visit said none of them had any jobs related to payday lending. In fact, there are few jobs of any kind here. William Snow, 51, left the settlement straight out of high school. “There’s nothing for young folks to do around here, ” he said.
Today at least seven of the 45 rancherias in California are involved in online payday lending — though it is unclear to what extent they actually manage the businesses with which they are affiliated. In all, some 30 Native American tribes are in the industry, according to Barry Brandon, who heads the Native American Financial Services Association, a trade organization for tribal payday lenders.
“We’re talking about a very small group of very small tribes, ” said Ellen Harnick, an attorney at the Center for Responsible Lending, a consumer advocacy group. There are 566 federally recognized Native American tribes in the U.S.
Like the Habematolel Pomo, these tribes appear online as the owners of payday lending enterprises. But the call centers and other operations are elsewhere, and the tribes themselves get as little as 1 percent of the revenue. The entire online payday lending industry brought in nearly $4.3 billion in revenue in 2012.
Until last year, when federal regulators started cracking down on tribal payday lending businesses, they constituted about a quarter of the online payday lending industry, said John Hecht, an analyst who specializes in payday loans.
California’s rancherias are located in remote parts of the state, and have little land and a dispersed membership. There are few economic options for them: Casinos, the traditional revenue generator for tribes, are not always viable, especially in far-flung places.
The Habematolel Pomo know this. Most of the rancheria’s land is already occupied by the wigwam-shaped Running Creek casino, which opened in 2012. But Running Creek, with its 349 slot machines, six gaming tables and two restaurants, has failed to live up to its promise. The revenues, wrote Sherry Treppa, the head of the tribal council, “have been below expectations.” The casino cost the Habematolel Pomo $30 million to build.
The revenue generated from the payday lending businesses, Treppa said, funds the tribe’s youth, infrastructure and cultural programs. Some of it is also used to pay for the schooling of tribal children.
But rancheria members such as Vanessa Niko said they don’t see these benefits on the rancheria itself, perhaps because none of the tribal council members live there. And Niko doesn’t see any new employment opportunities opening up for herself or her five children.
As banks and building societies close their doors to all but the least 'risky' borrowers, Dispatches reporter Jane Moore investigates a highly lucrative financial industry that has stepped in to provide loans to the millions of people denied credit elsewhere.
She discovers that many of the loans offered by some of these doorstep operators...