The recent U.S. Supreme Court ruling in a case between the state of Michigan and the Bay Mills Indian Community, which upheld tribal sovereignty in the case of a casino, did not deal with payday lending but mentioned possible limits to tribal authority by suggesting that states could pursue individuals instead. Some observers believe the decision will make it harder for payday lenders to claim that an affiliation with Native American tribes exempts them from state and federal consumer protection laws.
"This case makes clear that sovereign immunity is only immunity from being sued but they are not exempted from complying with the law," said Lauren Saunders, associate director of the National Consumer Law Center. "Payday lenders who claim an affiliation with a tribe claim that they are outside of law [but] that is simply wrong and this says a court can even issue an order against them by doing it through action against an individual."
However, other experts insist it is uncertain whether the ruling can be applied to tribes and affiliated payday lenders. Ronald Rubin, a partner at Hunton & Williams in Washington, says, "The real question is whether or not payday lenders located on Indian lands are actually operating on tribal territory when they make loans to people around the country."