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Tribes holding up their end of the bargain on Fintech regulations

As chairman of the Otoe-Missouria Tribe, I and my fellow Tribal Council Members are ultimately responsible for ensuring the well-being and success of our people and government.  Like many Native American tribes, economic development is important for our future success of both our members and our Tribal government. Creating businesses that are arms of the Tribe is how our government generates income, and funds the many critical programs we offer to tribal members, from social services to education.  Many tribes, especially those located in geographically isolated areas, have turned to Internet commerce and fintech as a way to reach broader audiences of consumers than only those who are physically near tribal lands in order to help grow their economy and provide for the general health of our people.

While we have been successful in establishing thriving e-commerce businesses, there are some who wrongly believe commissions established under laws passed by our Tribal government to regulate these businesses can’t effectively operate with independent authority.  Their questions imply that as Native Americans, we might not be capable of establishing and enforcing regulations, much less operating a tribal government.  As a people, we have faced discrimination for centuries, but as sovereign nations it is time for Washington to recognize that our businesses are not only legal and lawful, but have strict regulations already in place providing oversight of our tribal enterprises and ensuring consumers are protected.

{mosads}In order to maintain the integrity of our online lending businesses and protect consumers, my tribe regulates these operations through a commission that has been strictly enforcing Tribal and Federal laws relevant to these enterprises for years.  We established the Consumer Finance Services Regulatory Commission so consumers using our lending businesses know the products they are considering are licensed, legal businesses, and that they can feel protected when making decisions regarding which financial products meet their needs.

The Commission’s establishment and operations are consistent with federal law and has a mandated mission to protect consumers and regulate individuals or organizations that provide consumer financial services.  This Commission was created on the Tribe’s own initiative to create a strong, independent financial regulator that could also serve as a valuable source of information for those interested in the Tribe’s consumer lending products and services.  Others tribes have followed our lead by establishing their own regulatory commissions, and we’re proud to have been at the forefront of leading that charge.

Though the critics continue to unfairly question and besmirch us, there have been signs that regulators are taking positive notice of our efforts.  During a recent hearing of the House Financial Services Committee, the Consumer Financial Protection Bureau’s (CFPB) Acting Deputy Director David Silberman stated that loans offered by tribes are easier to repay than brick-and-mortar products such as payday loans.  This is a direct result of tribes like ours establishing regulatory commissions designed to protect consumers.

We watched carefully as Congress enacted Dodd-Frank, which explicitly directed the CFPB to respect the status of tribal governments as co-regulators, just like they do with state governments.  Our tribe has held up our end of the bargain with our regulatory commission and its work to oversee our e-commerce businesses and protect consumers.  With the CFPB poised to issue new rules for short-term lending, it is our sincere hope that federal regulators respect the mandate within Dodd-Frank and work shoulder to shoulder with tribal governments – including ours – as co-regulators.

Shotton is chairman Otoe-Missouria Tribe

The views expressed on the Congress Blog are the author’s own and not the views of The Hill.


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