Al Jazeera America’s recent series “Payday Nation” had so much promise to get the facts right and tell a side of the story which has been woefully underrepresented in the world of partisan media and painfully biased reporting. That promise unfortunately fell flat.
It wasn’t for lack of education, however.
The Native American Financial Services Association (NAFSA) has long sought to straighten out the debate regarding online tribal lending—a part of the non-bank financial services industry which millions of Americans depend on for access to credit. These Americans seek out our products and rely on them to meet their basic needs when financial disaster strikes. They have been turned away from banks and shut out of the traditional financial system.
We were happy to oblige the “Al Jazeera reporters” who inquired about our members’ tribally owned, operated, and regulated businesses with education and information about how they operate, how they are regulated, and how they take special action to ensure their products are offered in a consumer-friendly and transparent way. Through numerous conversations, we provided statistics and details in hopes that we would get a fair and transparent piece. Unfortunately, they instead chose the unprofessional course, basing their story on faulty and unverified premises and false tropes about our industry.
There are significant differences between the types of lending we engage in and the traditional payday loan industry. Our members provide online, short-term installment loans to the millions of consumers who demand our products and who have few alternatives when forced to deal with an unplanned financial need.
Unlike traditional payday loans, we provide installment plans for repayment, providing consumers with options so they can decide how to best meet their needs. In many cases, this type of loan makes better financial sense than missing a payment (and thus incurring a late fee) or overdrafting (another fee) or, in some cases, both. Annualize these fees and you find a rate far higher than our lending products are alleged to carry.
Our businesses are wholly owned, operated, and regulated by the tribe and tribal entities. They are formed as an arm of the tribe for the express purpose of economic development—meeting revenue shortfalls where funding from the federal government has been woefully insufficient. They are governed by tribal law and overseen by tribal regulatory bodies.
Contrary to the implied premises in the Al Jazeera America series—and as we noted many times in the conversations we had with their reporters—our tribal lending enterprises do operate call centers on reservation land and do employ tribal members. In fact, we have gone to great lengths to train members to fill roles from the management of tribal enterprises to the call center representatives, which provides meaningful employment, economic self-sufficiency, and a way to break the cycle of poverty and dependence our people have been trapped in for decades.
Lending revenues fund schools, infrastructure, health care, elder care, nutrition assistance, and law enforcement. They build playgrounds and fund afterschool programs that prepare our children for college and keep them out of trouble. They ensure that our elders and our children do not go hungry, despite high levels of poverty on reservations across the country.
In one case, the Lac Vieux Desert Band of Lake Superior Chippewa Indians on Michigan’s Upper Peninsula used their lending revenues to subsidize propane for tribal members who were struggling to heat their homes. This was especially important as the tribe was experiencing the harshest winter they had ever known with nighttime temperatures falling to 40 degrees below zero. Without revenues from the Lac Vieux Desert’s lending operation, their tribal members would be forced to choose between paying for heat or affording food, medicine, diapers, or any other basic necessities.
NAFSA member tribes have been at the forefront of leading the industry in responsible and transparent lending practices and self-regulation. Our members abide by a set of stringent best practices to gain consumer trust and treat them fairly. We have established a model lending code for our tribes. We have sought co-regulation with the Consumer Financial Protection Bureau and other federal agencies, pursuant to the government-to-government and regulator-to-regulator relationship that has existed between the federal government and Indian country.
It is wholly irresponsible of Al Jazeera America to print a piece which does not tell this side of the story and it is dishonest of their reporters to print unverified falsehoods even as they had information proving otherwise. It undermines their “Code of Ethics” which claims that Al Jazeera America will “adhere to the journalistic values of honesty, courage, fairness, balance, independence, credibility and diversity.” It does not “present diverse points of view and opinions without bias and partiality.”
We are disappointed in this misleading coverage which badly maligns an industry that has provided tribal nations with such unparalleled hope. We are troubled that the reporters Al Jazeera America has provided with an outlet for their work have been given a platform to contribute to the harm being exacted upon Indian country.
Just as our member companies have committed to following a lending code that fully counters and invalidates the allegations Al Jazeera America has made against us, it is long past time for Al Jazeera America to begin better adherence to its own professed code of ethics and conduct and set the record straight.
Barry Brandon, a citizen of the Muscogee (Creek) Nation, serves as the executive director of the Native American Financial Services Association (NAFSA), bringing a wealth of experience in Native American law and policy to the organization. He has served for more than two decades as a litigator, corporate executive, policy strategist, and regulatory advisor, making him a highly-regarded authority on legal and policy matters regarding Indian country.