Longmont, CO asked in Native American Law and Banking for Colorado

Q: Is there anyway I can fight a tribal loan that falsely advertised their APR?

I’m 23 years old and needed $600 dollars for some bills I had to pay. I’m barely scraping by how it is. Before this, I had never heard of tribal loans, didn’t even know they existed. I went through withu loans and before I signed the agreement, I was told my APR was 25%. After a couple month, I wanted to see how much more I owed, and it turns out my loan APR is 509%, meaning that I need to pay over $1700 in the end for a $600 loan. Is there anyway out of this, how is this even legal and how can they get away with something like this.

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1 Lawyer Answer
James L. Arrasmith
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  • Business Law Lawyer
  • Sacramento, CA

A: Certainly, it's distressing to hear about such a situation.

Tribal loans operate under the sovereign immunity of their respective tribes, which means they're not subject to state laws that regulate payday loans. This allows some of them to charge exorbitant interest rates. However, if they falsely advertised their APR, you might have a potential claim based on misrepresentation or fraud. It's essential to keep all documentation, including any written or electronic communications and the initial agreement.

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