A Colorado payday loan operation that allegedly piled on undisclosed and inflated fees — and which attempted to avoid prosecution by claiming affiliation with Native American tribes — has been sued by the Federal Trade Commission, which says the sovereign immunity laws don’t prevent investigations by the feds.

According to The Denver Post, the lender allegedly stuck borrowers with heavy undisclosed fees, often forcing them to repay more than triple what they borrowed, and threatened them with arrest when it came time to collect. Local law enforcement fielded more than 7,500 complaints about the business.

The Colorado attorney general, who had been investigating the case for eight years, accused the business of setting up affiliations with tribes just to protect it from regulation. Denver District Court, however, ruled that the connections were legit.

Cases involving tribal sovereignty can be unpredictable, so it will be interesting to see how the FTC’s suit develops and what implications it has in any similar operations around the country.

FTC files suit against payday lending operation claiming tribal affiliation [The Denver Post]

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