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Iowa Departmentof Inspectionsand AppealsAppealsIowaDepartment ofInspections andDivisionDivision ofof AdministrativeAdministrative HearingsHearingsWallace StateOffice BuildingWallaceState OfficeBuildingDesDes Moines,Moines, IowaIowa 5031950319Inthe MatterMatter of:of:In the)DIA Nos.Nos. 12IDB002,12IDB002, 13IDB00113IDBoo1)DIACASHCALL,INC.IDOBNos. 2012-NRRCASHCALL, INC.)IDOB Nos.2012-NRR 2003-01542003-01541600 SouthSouth DouglassDouglass naheim, CACA 92806)Anaheim,92806)RULING ONRULINGON WHETHERWHETHERRespondent.)LOANSLOANS ATAT ISSUEISSUE AREARERespondent.)SUBJECT TOTO IOWASUBJECTIOWA LAWLAWPursuantto aa jointjoint motionmotion ofof thethe parties,parties, hearinghearing onon thethe StatementStatementofof ChargesCharges filedfiledPursuant toagainst RespondentRespondentCashCall,CashCall, Inc.Inc. byby thethe IowaIowa DivisionDivision ofof BankingBanking (theDivision) wasagainst(the Division)wasconsolidated withby Respondenton thethe denialdenial ofof itsconsolidatedwith thethe hearinghearing requestedrequested byRespondent onits applicationsapplicationsfor NonresidentRegulated LoanforNonresident RegulatedLoan CompanyCompany licenses.licenses. TheThe StateState laterlater filedfiled anan unresistedunresistedMotionMotion toto SeverSever Proceedings,Proceedings, resultingresulting inin thethe divisiondivision ofof thisthis proceedingproceeding intointo twotwo parts:parts:1) aa hearingserviced by1)hearing regardingregarding thethe thresholdthreshold questionquestion ofof whetherwhether loansloans mademade and/orand/or servicedbyRespondentare subjectsubject toto IowaIowa law;law; and2) aa hearinghearing regardingregarding applicationapplication ofof IowaIowa lawslawsRespondent areand 2)(if theissue arefound toto bebe subjectsubject toto IowaIowa law),(ifthe loansloans atat issueare foundlaw), anyany remainingremaining issuesissuesregardingfor disciplinelicense denial,denial, andand thethe appropriateappropriate levellevel ofofregarding groundsgrounds fordiscipline and/orand/or licensediscipline andamount ofof restitutionrestitution owedowed byby Respondent,Respondent, ifif any.disciplineand amountany.The partieslater agreedagreed toto submitsubmit thethe firstfirst issueissue —– whetherTheparties rviced byare subjectsubject toto IowaIowa lawlaw —– withoutservicedby RespondentRespondent atusconferenceonMay30,2013,to 187 Iowa Administrative Code 11.30. At a status conference on May 3o, 2013, thetheparties agreedagreed uponthe documentsdocuments toto bebe includedpartiesupon theincluded inin thethe record.record.EachAfter submissionsubmission ofof thethe briefs,briefs,Each partyparty submittedsubmitted anan initialinitial briefbrief andand aa replyreply brief.briefl1 Afteroral argumentwas heldThe partiesparties includedincluded exhibitsexhibits withwith theirbriefs,oralargument washeld onon JulyJuly 26,26, 2013.2013. Thetheir briefs,some ofof whichthe timetime ofof theMay 30conference whensomewhich hadhad notnot beenbeen includedincluded atat thethe May3o statusstatus conferencewhenthe partiesparties agreedagreed uponThe partiestheupon thethe documentsdocuments toto bebe admittedadmitted intointo thethe record.record. Thepartiesagreed atthat thethe recordrecord wouldwould consist1) theagreedat oraloral argumentargument thatconsist of:of: 1)the parties’parties' jointjoint StipulationStipulationand ExhibitsExhibits AA throughandthrough M;M; 2)2) State’sState's ExhibitsExhibits 11throughthrough 9;9; andand 3)3) Respondent’sRespondent's ExhibitsExhibits21 throughSeveral ofof the1through 4.4.2 Severalthe exhibitsexhibits submittedsubmitted areare affidavits.affidavits. TheThe partiesparties representedrepresentedcaptioned itsits initialinitial briefbrief asas aa MotionBoth partiesparties previouslypreviously agreed,11 RespondentRespondent captionedMotion toto Dismiss.Dismiss. Bothagreed,however, thatthe issueissue ofof whetherthe loansloans atat issueissue areare subjectsubject toto IowaIowa lawlaw ishowever,that thewhether theis notnot necessarilynecessarilydispositive forAdditionally, thedispositivefor purposespurposes ofof thesethese actions.actions. Additionally,the partiesparties agreedagreed toto submitsubmit thethethreshold issueissue ofof thethe applicabilityapplicability ofof IowathresholdIowa lawlaw onon stipulatedstipulated factsfacts afterafter briefingbriefing andand oraloralargument. Consequently,Consequently,CashCall'sCashCall’s documentdocument entitledentitled MotionMotion toto DismissDismiss isargument.is notnot beingbeing treatedtreatedas such.such. AsAs thethe StateState correctlycorrectly notes,notes, thethe MotionMotion toto DismissDismiss herehere goesgoes beyondasbeyond thethe pleadings.pleadings.Finally,of theactions herehere—– theof thelicense denialdenial —– wasFinally, oneone ofthe actionsthe appealappeal ofthe licensewasactuallyactuallyinitiatedinitiated bybyCashCall. CashCallCashCall presumablyCashCall.presumably doesdoes notnot wishwish toto havehave thatthat actionaction dismissed.dismissed.2exhibits werewere numbereddifferently whenwhen theyfor purposesof2 Respondent’sRespondent's exhibitsnumbered differentlythey werewere submittedsubmitted forpurposes ofthe MayMay 30For convenience,convenience, theused forfor purposesof thisthe3o statusstatus conference.conference. Forthe numberingnumbering usedpurposes ofthis
DIA13IDB0011DIA Nos.Nos. 12IDB002,12IDBoo2, 13IDBooPage2Page 2that thethe factsfacts inThe partiesthatin anyany affidavitsaffidavitssubmittedsubmitted areare notnot uncontested.uncontested. Theparties agreedagreed thatthatthe affidavitsaffidavits wouldthewould bebe consideredconsidered inin thethe contextcontext ofofthethestipulationstipulation andand otherother documentsdocumentsin therecord inin orderorder toto makemake aa determinationdetermination regardingregarding thetheaccuracyaccuracy oror veracityveracity ofinthe recordof thethefacts assertedtherein, ifif necessary.necessary.factsasserted therein,FINDINGS OFOF FACTFACTFINDINGSRelationshipbetween CashCall,CashCall, Inc.,Financial, LLC,LLC, andRelationship betweenInc., WesternWestern SkySky Financial,and WSWS Funding,Funding,LLCLLCWestern SkySky Financial,Financial, LLCLLC (“WesternWestern("Western Sky”)Sky") isis aa limitedlimited liabilityliability companycompany organizedorganizedunder thethe lawslaws ofof thethe StateState ofof SouthSouth Dakota.Dakota. WesternWesternSkySky isis whollywholly ownedowned byunderby rSiouxTribe(“Tribe”).TheTribeis aaWebb, an enrolled member of the Cheyenne River Sioux Tribe ("Tribe"). The Tribe isfederally recognizedWesternSkySky maintainsmaintainsaaCheyenneCheyenne RiverRiver SiouxSiouxfederallyrecognized IndianIndian tribe.tribe. ateorganizationalstatute.Westernbusiness license.3 The Tribe does not have a corporate organizational statute. WesternSky is8).Skyis notnot ownedowned oror operatedoperated byby thethe TribeTribe oror anyany ofof itsits politicalpoliticalsubdivisions.subdivisions. (Stip.(Stip. ¶¶ 8).Western SkySky doesphysical presenceWestern Sky'sSky’s facilitiesfacilities areWesterndoes notnot maintainmaintain aa physicalpresence inin Iowa.Iowa. Westernarelocated entirelylocatedentirely withinwithin thethe externalexternal boundariesboundaries ofof thethe Tribe’sTribe'sreservation.reservation. (Stip.(Stip. ¶¶VI 10,10,11).Allofof WesternWestern Sky'sSky’s employees,employees, facilities,ii). Allfacilities, andand operationsoperations areare locatedlocated onon thethe Tribe’sTribe'sreservation.(Stip.¶¶11;11; Resp.Resp. Exh.Exh. 314). WesternWestern SkySky hasapproximately 53reservation. (Stip.3 ¶¶VI 6-9,6-9, 14).has approximately53employees, many(Resp. Exh.Exh. 33 ¶¶ 9).employees,many ofof whomwhom areare enrolledenrolled tribaltribal members.members. (Resp.9).WS Funding,LLC (“WSWSFunding, ursuantPursuantto WesternWestern Sky'sSky’s agreementswith CashCallCashCall andWS Funding,alltoagreements withand WSFunding, WSWS FundingFunding purchasespurchases allof themade byby WesternWestern SkySky andofthe loansloans madeand CashCallCashCall providesprovides certaincertain servicesservices toto WesternWesternSky. CashCallCashCall servicesloans mademade byby WesternWestern SkySky andowned byby WSSky.services thethe loansand ownedWS Funding.Funding.Underthe agreementsagreements betweenbetween thesetheseentities,entities,WesternWesternSkySky sellssells allall ofof itsUnder theits IowaIowa loansloans totoWS Funding.WS FundingFunding receivesreceives thethe notesnotesinin"like-new"“like-new” conditioncondition—– theWSFunding. WSthe agreementagreementstipulates thatthat nono paymentspayments willwill havehave beenstipulatesbeen receivedreceived onon thethe notesnotes andand thatthat thethe balancesbalancesdue areare equalequal toto faceface value.The salessales generallygenerally occurdays ofduevalue. Theoccur withinwithin threethree daysof thethe loanloan h.¶7(c)).7;Exh.A¶7(c)).but can take up to seven days. (Stip. TT 5,The agreementsrequire WSWS FundingTheagreements betweenbetween thesethese entitiesentities requireFunding toto maintainmaintain aa reservereserveaccount atat aa balancebalance sufficientsufficient toaccountto fundfund twotwo days’days' worthworth ofof purchasedpurchased notesnotes (as(asdetermined byby thethe lastlast month'smonth’s dailydaily average),average), andaccount withdeterminedand toto fundfund thethe accountwith anan initialinitial theaccountaccountdailydaily "for“for paymentpayment ofof purchased ioo,000 deposit.purchasednotesassigned toor unfundedunfunded NotesNotes whichwhichnotes assignedto [WS[WS Funding]Funding] andand toto fundfund anyany unpurchasedunpurchased orwere executedend ofof theAgreement].” (Exh.(Exh. AA ¶¶ 8).wereexecuted byby makersmakers priorprior toto [the[the endthe Agreement]."8).decision willwill reflectreflect thethe numberingnumbering RespondentRespondent used when attaching the exhibits to its briefs.3 The Cheyenne River SiouxSioux TribeTribe BusinessBusiness LicenseLicensewhichwhichwaswassubmittedsubmitted bybythethe partiesparties provides[t]his businessbusiness license is hereby issued toon its face that, “[h]aving"[h]aving mademade proper application[,] [t]hisnamed. ThisThisBusinessBusiness LicenseLicense enables this person to transact whatever business orthe person named.activity is specifiedspecified onon applicationapplication untiluntil this Business LicenseLicense expiresexpires oror isis cancelled.”cancelled." (Stip.Exh. I).
DIADIA Nos.Nos. 12IDB002,12IDB002, 13IDB00113IDBoo1PagePage 33Underthe agreements,agreements, WSWS FundingFunding alsoalso providesprovides WesternWestern SkySky withUnder thewith moneymoney( goperatingexpenses.expenses. Additionally,Additionally, WSWS FundingFunding isis( 10,000/monthobligated toto reimbursereimburse WesternWestern SkySky forfor "any“any andall feesobligatedand allfees associatedassociated withwith suchsuchassignment andand purchase,purchase, includingincluding butbut notnot limitedlimited toto anyany additionaladditional officeoffice orassignmentor personnelpersonnelcosts toto WesternWestern SkySky Financial,ACH, wiringfees, ifcostsFinancial, ACH,wiring oror otherother bankbank fees,if any,any, uponuponpresentation ofof invoice."invoice.” WSWS FundingFunding alsoalso coverscovers costscosts associatedassociated withwith WesternWestern Sky'sSky’spresentationserver andand indemnifiesindemnifies WesternWestern Sky.Sky. (Exh.(Exh. AA ¶¶5, 6,8, 11).11).¶115,6, 8,serverIowa LoansLoans IssuedIowaIssued byby WesternWestern SkySkyThe IowaTheIowa DivisionDivision ofof BankingBanking issuedissued IowaIowa NonresidentNonresident RegulatedRegulated LoanLoan CompanyCompanylicense No.The licenselicense isis activeactivelicenseNo. NRRNRR 2003-01542003-0154 toto CashCall,CashCall, Inc.Inc. onon OctoberOctober 23,23, 2003.2003. Thethrough DecemberDecember 31,31, 2013.(Stip. ¶¶ 1).1).through2013. (Stip.Divisionconducted anan examinationexamination ofof CashCall'sCashCall’s businessDivision examinerexaminer RandyRandy JohnsonJohnson conductedbusinesspursuant toto IowaIowa CodeCode sectionJohnson reviewedreviewed loansloans mademade fromfrom JanuaryJanuary 1,1,pursuantsection 536.10.536.10. Johnson2009through JulyJuly 5,5, 2012.There werewere 1,2311,231 loansin CashCall'sCashCall’s2009 through2012. Thereloans toto IowaIowa consumersconsumers inportfolio fortime period;period; JohnsonJohnson reviewedreviewed 5252 ofof theAll ofof theportfoliofor thatthat timethe loans.loans. Allthe loansloansreviewedby WesternSky Financialpart ofof CashCall'sCashCall’sreviewed werewere originatedoriginated byWestern SkyFinancial andand becamebecame partportfolio asas aa resultof theagreements betweenbetween WesternWesternSky,Sky, CashCall,CashCall, andWS Fundingportfolioresult ofthe agreementsand WSFundingdescribed above.(Stip. ¶¶describedabove. (Stip.¶112-4).2-4).Intypical loanpotential IowaIowa borrowerborrower contactscontacts WesternWestern SkySky overIn aa typicalloan transaction,transaction, aa potentialover thethetelephone oror viavia theto applyapply forWestern SkySky communicatestelephonethe internetinternet tofor aa loan.loan. Westerncommunicates itsitsapproval oror denialdenial ofof aa borrower'sborrower’s loanloan applicationapplication—– basedapprovalbased onon itsits ownown underwritingunderwritingsystem —– bysystembyphonephoneororinternet.internet. IfIf aa borrowerborrower decidesdecides toto acceptaccept thethe loanloan termsterms proposedproposedby WesternSky, thewith WesternWestern SkySky electronically.electronically.byWestern Sky,the borrowerborrower signssigns thethe loanloan agreementagreement withWhen theloan isis approved,AllWhenthe loanapproved, WesternWestern SkySky depositsdeposits moneymoney intointo thethe borrower’sborrower's bank.bank. Allcommunications betweenbetween IowaIowa borrowersborrowers andandWesternWesternSky,Sky, CashCall,CashCall, andWS Fundingcommunicationsand WSFunding¶1120-24).20-24).occur via(Stip. ¶¶occurvia mail,mail, ghthetheinternet.internet. (Stip.A standardstandard WesternWesternSkySky loanloan agreement,agreement, ofof thethe typetype foundfound inin thethe portfolioportfolio servicedserviced byAbyCashCall, providesCashCall,provides asas followsfollows regardingregarding choicechoice ofof lawlawandand jurisdiction:jurisdiction:This LoanThisLoan AgreementAgreement isis subjectsubject solelysolely toto thethe exclusiveexclusive lawslaws andandjurisdiction ofof thethe CheyenneCheyenne RiverRiver SiouxSioux Tribe,Tribe, CheyenneCheyenne RiverRiverjurisdictionIndianIndian Reservation.Reservation. ByBy executingexecuting thisthis LoanLoan AgreementAgreement you,you, thetheborrower, herebyhereby acknowledgeacknowledge andofborrower,and consentconsent toto bebe boundbound toto thethe termsterms ofthis LoanLoan Agreement,thisAgreement, consentconsent toto thethe solesole subjectsubject mattermatter andand personalpersonaljurisdiction ofof thethe CheyenneCheyenne RiverRiver SiouxjurisdictionSioux TribalTribal Court,Court, andand furtherfurther agreeagreethat nono otherother statestateoror federalfederal lawlaw oror regulationregulation shallshall applyapply toto thisthis LoanLoanthatAgreement, itsAgreement,its enforcementenforcement oror interpretation.interpretation. Governing Law.Law. ThisThis AgreementGoverningAgreement isis governedgoverned byby thethe IndianIndian CommerceCommerceClause ofStates ofof AmericaAmerica andthe lawslaws ofof theCheyenne RiverRiverClauseof thethe UnitedUnited Statesand thethe CheyenneSioux Tribe.We doSiouxTribe. Wedo notnot havehave aa presencepresence inin SouthSouth DakotaDakota oror anyany otherother
DIA13IDB0011DIA Nos.Nos. 12IDB002,12IDB002, 13IDBooPagePage 44states ofof theNeither thisthis AgreementAgreement nornor LenderLender isis subjectsubjectstatesthe UnitedUnited States.States. Neitherto thethe lawslaws ofof anyof theUnited StatesStates ofof America.America.toany statestate ofthe United(Stip. ¶ 25; Exh. C, pp.pp. 1, 3).3).ComplaintComplaintA customer,A, filedof hisAcustomer, CustomerCustomer A,filed aa complaintcomplaint withwith thethe DivisionDivision regardingregarding thethe termsterms ofhisloan withwith CashCall.Using aa computerloanCashCall. Usingcomputer inin IowaIowa toto submitsubmit thethe loanloan application,application, CustomerCustomerA borrowedborrowed 2,525 2,525 fromfrom Westernon MarchMarch 9,9, 2011.Western Sky onThe loan2011. Theloan carriedcarried anan interestedinterestedrateof 135%rate additionaladditional costscosts ofof thethe loan,loan, camecame toto anan annualannualpercentage raterate ofof 139.32%.139.32%. OnOn MarchMarch 12,Customer AA waspercentage12, 2011,2011, Customerwas notifiednotified thatthat hishis vicedbyCashCall.(Stip.¶31;had been transferred to WS Funding and would be serviced by CashCall. (Stip. ¶ 31;Exh. J,J, K, L, M).M).Exh.CONCLUSIONS OFOF LAWCONCLUSIONSLAWThese consolidatedof Banking'sBanking’s rolerole inTheseconsolidated actionsactions bothboth arisearise fromfrom thethe SuperintendentSuperintendent ofinlicensing andCashCall waslicensingand regulatingregulating lendinglending inin Iowa.Iowa. CashCallwas issuedissued anan IowaIowa nonresidentnonresidentregulatedloan companycompany licenseof Bankingregulated loanlicense byby thethe SuperintendentSuperintendent ofBanking onon OctoberOctober 23,23, 2003.2003.The Statementof Chargesbasis forTheStatement ofCharges thatthat formsforms thethe basisfor thethe firstfirst actionaction allegesalleges thatthatRespondentCashCall asviolation ofof provisionsprovisions ofofRespondent CashCallas licenseelicensee violatedviolated oror aidedaided andand abettedabetted violationIowaIowa RegulatedRegulated LoanLoan Act,Act, andIowa CodeCode ChapterChapter 536,536, thethe Iowaand IowaIowa CodeCode ChapterChapter 537,537, thetheIowaIowa ConsumerConsumer CreditCredit CodeCode (ICCC).(ICCC). thetheSuperintendentSuperintendentof Banking’sregulated loanloan companycompany licenseslicenses toto CashCall'sCashCall’sofBanking's denialdenial ofof nonresidentnonresident regulatedbranches inin Anaheim,Anaheim, CaliforniaCalifornia andLas Vegas,largelybranchesand LasVegas, Nevada.Nevada. TheThe denialdenial isis premisedpremised largelyupon thethe allegedalleged conductforms thethe basisbasis forfor thethe StatementStatement ofof ChargesCharges inuponconduct thatthat formsin thethe firstfirstaction.action.The thresholdthe partiesparties havehave requestedrequested rulingruling onon priorprior toto proceedingproceeding isThethreshold issueissue thatthat theiswhether thetheloansloansatatissueissue—– thatmade byby WesternWestern Sky,Sky, soldsold toto WSWSwhetherthat is,is, thethe loansloans l —– areFunding, andare subjectsubject toto IowaIowa law.law.A.A.TheConsumer CreditCredit CodeCodeThe IowaIowa ConsumerThe IowaCredit CodeCode (“ICCC”)TheIowa ConsumerConsumer mber ofof reasons,reasons,including toconsumers againstagainst unfairunfair practicespractices byby supplierssuppliers oror collectorscollectors ofofincludingto protectprotect consumersconsumer creditcredit andand toto permitpermit andand encourageencourage thethe developmentdevelopment ofof fairfair andand economicallyeconomicallyconsumersound consumerconsumer creditcredit practices.4practices.4 TheThe legislaturelegislature directeddirected thatthatthetheICCCICCC bebe liberallysoundliberally5construed andand appliedapplied toto promotethese underlyingconstruedpromote theseunderlying purposes.purposes.5The ICCCinto oror modifiedmodified inin thethe StateState ofof ontransaction thatthat isis enteredentered intoA transactionis enteredinto oror modifiedmodified inin IowaIowa if,is aAtransaction isentered intoif, amongamong otherother things,things, thethe debtordebtor isaresidentof Iowaresident ofIowa atat thethe timetime thethe personperson extendingextending creditcredit solicitssolicits thethe transactiontransaction oror thethe4Iowa CodeCode §§ 537.1102(2)4 Iowa537.1102(2) (2013).(2013).5 Iowa Code § 537.1102(1) (2013).(2013).
DIA13IDB0011DIA Nos.Nos. 12IDB002,12IDBoo2, 13IDBooPagePage 55debtor isis aa residentof IowaIowa atperson extendingextending creditcredit receivesreceives aa signeddebtorresident ofat thethe timetime thethe personsignedwriting evidencingwritingevidencing thethe transactiontransaction oror aa writtenwritten offeroffer toto enterenter intointo thethe transaction.transaction.66One ofarguments againstagainst applicationapplication ofof IowaIowa lawlaw toissue isisOneof Respondent’sRespondent's argumentsto thethe loansloans atat anagreementtothelawsandthat the parties expressly agreed to be bound in the loan agreement to the laws andjurisdiction ofof theTribe, toexclusion ofjurisdictionthe Tribe,to thethe exclusionof anyany otherother statestate oror federalfederal lawlaw oror regulation.regulation.Underthe ICCC,ICCC, however,to waivewaive oror agreeagree toto foregoforegoUnder thehowever, consumersconsumers areare notnot permittedpermitted to7rightsor benefitsbenefits conferredconferred byby thethe ICCC.7ICCC.rights orInAldens, Inc.Inc. v.v. Miller,Miller, thethe EighthEighth CircuitCircuit upheldupheld thethe ICCCICCC againstIn Aldens,against challengechallenge onongrounds thatthat itit constitutedconstituted anan undueundue burdenburden onon interstateinterstatecommercecommerce inin violationviolation ofof thegroundsthe8commerce clauseThe CourtCourt examinedexamined applicationapplication ofofcommerceclause ofof thethe UnitedUnited StatesStates Constitution.Constitution.8 Thethe ICCCICCC tothetoanan IllinoisIllinoiscorporationcorporation thatthat conductedconducted aa mailmail orderorder businessbusiness inin allall 505o states,states,using aa creditthat thethe contractcontract waswas governedgoverned byusingcredit agreementagreement statingstating thatby IllinoisIllinois law.law. InInAldens, thethe creditcredit chargescharges underunder thethe agreementagreementwerewere inin compliancecompliance withwith IllinoisIllinois law,law, butAldens,but9out ofof complianceoutcompliance withwith ratesrates applicableapplicable toto open-endopen-end creditcredit financingfinancing inin Iowa.Iowa.9 InInupholding applicationapplication ofof thethe ICCC,ICCC, theupholdingthe CourtCourt found,found,Incontrast toto thethe insubstantialinsubstantial burdensburdens thethe operationoperation ofof ChapterChapter 537537In contrastimposes oncommerce, thethe interestinterest ofof thethe StateState ofof IowaIowa inimposeson interstateinterstate commerce,inprotecting itsprotectingits citizenscitizens fromfrom usurioususurious interestinterest ratesrates inin consumerconsumer creditcredittransactions isis considerable.considerable. And,And, itit extendsextends toto creditcredit salessales solicitedsolicited ofof andtransactionsandby IowabyIowa residentsresidents inin Iowa,Iowa, notwithstandingnotwithstanding thatthat thethe contractcontract termsterms declaredeclarethe contractcontract toto bebe governedgoverned byby thethe lawslaws ofin whichwhich theseller isistheof thethe statestate inthe thestatestoenactlocated. It suffices to note that it is necessary for the states to enactreasonableconsumer creditcredit legislationlegislation toforreasonable consumerto protectprotect thisthis publicpublic interest,interest, for‘in in thethe powerpower ofof thethe lenderlender toto relieverelieve thethe wantswants ofof thethe borrowerborrower lieslies thethegerm ofand UsuryUsury ss 44 (1969).(1969).10germof oppression.’oppression.' 4545 Am.Jur.2dAm.Jur.2d InterestInterest andThe loansfor purposespurposes ofof theseactions werewere loansTheloans examinedexamined byby thethe SuperintendentSuperintendent forthese actionsloansmadeto individualsmade toindividuals whowho gavegave IowaIowaaddressesaddresses inintelephonetelephone andand internetinternet loanloanapplications. ICCC,ICCC, thesethese loansloans areare subjectsubject toto IowaIowa law.law.applications.B.TribalTribal SovereignSovereign ImmunityImmunityRespondentargues that,that, notwithstandingnotwithstandingthetheICCC,ICCC, IowaRespondent arguesIowa lackslacks authorityauthority toto regulateregulate thethetransactions betweenbetween WesternWestern SkySky andand IowaIowa consumersconsumers becausebecause ofof WesterntransactionsWestern Sky’sSky's statusstatusas aa businessowned byasbusiness ownedby aa TribeTribe membermember andand licensedlicensed byby thethe TribeTribe toto conductconduct businessbusinessinside theRespondent assertsasserts that,that,basedbased onon "the“the generalgeneral derivativederivativeinsidethe reservation.reservation. Respondentimmunity ofof theTribe’s membersmembers fromfrom beingbeing forcedforced toto livelive bystate lawlaw whilewhileimmunitythe Tribe'sby non-tribalnon-tribal statepresent onon thethe Reservation,"Reservation,” thethe TribeTribe hashas solesole regulatoryregulatory authorityauthority overover WesternWestern Sky'sSky’spresenton-reservation businessbusiness activitiesactivities andany disputesrelated toto thosethose activities.activities.on-reservationand anydisputes related6Iowa CodeCode §§ 537.1201(1),6 Iowa537.1201(1), (2)(2) (2013).(2013).77 IowaCode §§ 537.1107(1)Iowa Code537.1107(1) (2013).(2013).8 610610 F.2d538 (8th(8th Cir.Cir. 1979).1979).8F.2d 53899 Id. atat 538-39.538-39.10(quoting Aldens, Inc. v. Miller, 46610 Id. atat 539-40539-40 (quoting379, 383-86383-86 (S.D.(S.D. IowaIowa 1979)).1979)).466 F.Supp.F.Supp. 379,
DIA13IDB0011DIA Nos.Nos. 12IDB002,12IDBoo2, 13IDBooPagePage 661. TheThe MontanaMontana RuleExceptions1.Rule andand ItsIts ExceptionsInMontana v.v. UnitedUnited States,the UnitedUnited StatesStates SupremeSupreme CourtIn MontanaStates, theCourt setset outout thethe generalgeneral ruleruleregardingthe inherentinherentsovereignsovereign powerspowersregarding anan IndianIndian tribe’stribe's authorityauthority overover nonmembers:nonmembers: the11 Theof antribe dodo notnot extendextend toto thethe activitiesactivities ofTheofan IndianIndian tribeof nonmembersnonmembers ofof thethe tribe.tribe.11Court articulatedtwo exceptionsexceptions torule, however,however, bothof whichCourtarticulated twoto thethe rule,both ofwhich relaterelate toto aa tribe’stribe's12regulationof activitiesFirst, aa tribetribe maymay regulate,regulate,regulation ofactivities occurringoccurring onon itsits reservation.reservation.12 First,through taxation,taxation, licensing,licensing, ormeans, thethe activitiesactivities ofthroughor otherother means,of nonmembersnonmembers whowho enterenterconsensual relationshipswith thethe tribetribe oror itsits members,members, throughthrough commercialcommercial dealing,dealing,consensualrelationships withcontracts, leases,Second, aa tribetribe maymay retainpower tocontracts,leases, oror otherother arrangements.arrangements. Second,retain inherentinherent powerto13exercise civilfee landswithinexercisecivilauthorityauthority overoverthethe conductconduct ofofnon-Indiansnon-Indians onon non-Indiannon-Indian feelands13 withinits reservationwhen thatconduct threatensthreatens oror hashas somesome directdirect effecteffect onon thethe politicalpoliticalitsreservation whenthat conduct14integrity, thethe economiceconomic security,or welfarewelfare ofintegrity,security, oror thethe healthhealth orof thethe tribe.tribe.14InPlains CommerceFamily LandLand andand CattleCattle Co.,Co., thethe SupremeSupremeIn PlainsCommerce BankBank v.v. LongLong IslandIsland FamilyCourt hadopportunity toto elaborateelaborate onon thethe exceptionsexceptions developeddeveloped inMontanaCourthad thethe opportunityin thethe Montanacase.15 TheThe casethat soldsold feefee landcase.15case concernedconcerned aa non-Indiannon-Indian bankbank thatland onon aa tribaltribal reservationreservationto non-Indiannon-Indian individuals.individuals. TheThelandlandhadhadpreviouslypreviously beenbeen ownedowned byby twotwo enrolledtoenrolledmembersof thethe CheyenneCheyenne RiverRiver SiouxLila Long,members ofSioux IndianIndian Tribe,Tribe, RonnieRonnie andand LilaLong, andand thethecompany inThe LongsLongs mortgagedcompanyin whichwhich theythey heldheld majoritymajority ownership.ownership. Themortgaged aa portionportion ofof thetheland toto thethe bankbank inin exchangeexchange forfor aa cancellationlandcancellation ofof somesome ofof thethe company’scompany's debtdebt andandadditional operatingoperating loans.loans. TheThe LongsLongs defaultedadditionaldefaulted onon theirtheir loansloans andand thethe bankbank initiatedinitiatedeviction proceedingsThe Longsevictionproceedings onon thethe land.land. TheLongs andand theirtheir companycompany broughtbrought suitsuit againstagainst thethebank inin tribaltribal courtcourt alleging,alleging, amongbankamong otherother things,things, thatthat thethe bankbank discriminateddiscriminated againstagainstthem byby offeringthemoffering thethe landland toto non-membersnon-members onon termsterms moremore favorablefavorable thanthan thethe bankbank hadhad16offered toofferedto them.them.16After thecourt foundfound inin favorfavor ofAfterthe tribaltribal courtof thethe Long
located entirely within the external boundaries of the Tribe's reservation. (Stip. VI 10, ii). All of Western Sky's employees, facilities, and operations are located on the Tribe's reservation. (Stip. ¶ 11; Resp. Exh. 3 VI 6-9, 14). Western Sky has approximately 53 employees, many of whom are enrolled tribal members. (Resp. Exh. 3 ¶ 9).
