understanding tribal sovereignty
While the initial entry of Native American Tribes into this relatively new world of e-commerce has often been through their online lending businesses, tribal leaders recognize that the real issue is about preserving their sovereign right to participate in a global economy that is increasingly dependent on the Internet.
Tribal lenders are legal, licensed, and regulated businesses that follow all applicable federal laws and operate pursuant to sovereign tribal law. And yet, the quick growth of the online lending industry has outpaced a general understanding of how Native American Sovereignty interacts with federal and state law, creating a tangled web of legal issues where state, tribal and federal laws and policies are colliding
The United States Department of Justice recently began targeting tribal businesses as part of a program called Operation Choke Point: a concerted effort to put specific industries it deems “undesirable” out of business. It works by pressuring banks to cut off tribal lenders from essential business services like having bank accounts, accessing payment processing networks, verifying customer information and more. Access to the banking system is an essential component of these tribal lending enterprises. Without that access, businesses simply cannot operate – forcing them to close their doors, drying up the revenues they provide to tribal governments, and causing the members of the tribes to slip back into a cycle of poverty. The strategy behind these Operation Choke Point efforts is clear: to circumvent the inherent sovereignty guaranteed Native Americans by the Constitution and centuries of legislative and judicial precedents by administratively strangling off their access to the financial system.