Your Legal Questions Answered

Your question touches on some complex areas of law, including tribal sovereignty, Colorado lending laws, and federal consumer protection statutes.

Native American tribes in the US are considered to be domestic dependent nations, which means that they have the power to govern themselves and manage their internal affairs. This power is often referred to as tribal sovereignty, and it includes a principle known as tribal immunity. Tribal immunity is a legal doctrine that generally protects tribes from being sued.

Tribal immunity is not the same as diplomatic immunity. "Diplomatic immunity," refers to a legal doctrine under international law that grants certain protections to diplomats from foreign countries. It doesn't generally apply to your case.

While tribes do have a degree of sovereignty and immunity, they are still subject to U.S. federal law. Therefore, the question of whether a tribal lender can charge an interest rate of 699% is more related to federal and Colorado lending laws than to tribal immunity and whether the tribe is subject to those laws.

In Colorado, House Bill 1229, also known as "Amending Terms Consumer Lending Laws," was recently enacted. The bill opts Colorado out of amendments to the "Federal Deposit Insurance Act", the federal "National Housing Act", and the "Federal Credit Union Act", and asserts that interest rates established in the Colorado "Uniform Consumer Credit Code" apply to consumer credit transactions in this state. This is unique to Colorado, and Colorado is only one of two states that have taken this approach. Specifically, HB 1229 modifies the requirements for certain types of loans​. For instance, it reduces the permissible acquisition charge on the original loan or any refinanced loan to 8% of the amount financed, and limits the number of times a lender may refinance a consumer loan to once in a year.

Additionally and pertinent to your case, Colorado law generally limits the maximum interest rate for loans to 45% per year. This is often referred to as the usury rate. Therefore, an interest rate of 699% would be considered usurious under Colorado law. The question remains, however, if the tribe is subject to Colorado's lending laws.

Thus, the ability of Colorado to regulate the tribe's lending activities in Colorado is complicated by the issue of tribal sovereignty and immunity, and different courts have taken different approaches. Colorado has held that sovereign immunity applies to tribal payday lenders in certain circumstances. However, a recent U.S. Supreme Court ruling has provided some additional clarity on this issue, at least on a federal level. The Supreme Court ruled that Native American tribal businesses do not have tribal immunity in bankruptcy proceedings and thus the tribe's debts are still potentially dischargeable. This decision might suggest that tribal entities can't use tribal immunity to shield themselves from the implications of state lending laws, but the exact implications of this ruling to your situation unknown. Bankruptcy is federal law, whereas HB 1229 is Colorado state law, and different constitutional principles apply.

Given the complexity of your case and the issues of unsettled law, I would recommend speaking to an attorney.