700 percent interest rates charged by 'Minto Money' trigger federal lawsuits

I suspect that some people in Minto, the 150-person village northwest of Fairbanks, don’t know what is being done in their names by Minto Money, which makes small loans at interest rates of more than 700 percent on the internet.

Minto Money says it does not do business in Alaska, is not subject to state usury laws that limit interest rates and does not have to be licensed in any state.

It is allegedly organized under the laws of the Native Village of Minto and headquartered at “205 Lakeview Drive, Suite 7, Minto, Alaska.”

As one of numerous lawsuits against Minto Money says, there is a tribal building at that address with no suites or numbers, so it is an unlikely site for e-commerce.

“First time Minto Money customers typically qualify for an installment loan of up to $1,000 with an APR of 690%,” the company says in a hard-to-find footnote on its website.

A lawyer from Nebraska named Shane Thin Elk, who identifies himself as commissioner of the Minto Financial Services Licensing & Regulatory Commission, issued what appears to be the only commission license—to run a consumer lending business named Minto Money.

The latest court challenge, filed May 8 in Illinois, includes a familiar charge: “The Minto Money website is used to make loans to consumers, including consumers in Illinois, at annual percentage rates in excess of 500%.” The loans are illegal, the lawsuits charge.

One of the plaintiffs claims she was charged 753 percent interest on a $700 loan. She had to pay $3,049 in finance charges, plus the original $700, in a 10-month payback period.

Another borrower paid 530 percent interest on a $2,600 loan, paying back a total of $15,591. A third borrower paid 784 percent interest on a $900 loan. In another lawsuit, a borrower said the interest rate was 792 percent.

The loan agreements say the borrower agrees that the laws of the tribe govern the deals and that Minto Money’s owners have sovereign immunity.

The lawsuit alleges this is a “rent-a-tribe scheme” in which “non-tribal payday lenders create an elaborate charade claiming their non-tribal businesses are owned and operated by Native American tribes.”

It said this fits a pattern in which the “tribal lending entity is simply a facade for an illegal lending scheme; all substantive aspects of the payday lending operation–funding, marketing, loan origination, underwriting, loan servicing, electronic funds transfers, and collections–are performed by individuals and entities that are unaffiliated with the tribe.”

“Where non-tribal individuals and entities control and manage the substantive lending functions, provide the lending capital necessary to support the operation, and bear the economic risk associated with the operation, they are not in fact “operated” by Native American tribes and, therefore, are not shielded by sovereign immunity,” the lawsuit charges.

The tribe gets a 2 percent commission on loans.

The lawsuit names Minto Money, Minto Development Corporation, the Benhti Economic Development Corporation, and former Rep. Doug Isaacson who is the CEO of the Minto Development Corporation. He is also a pastor.

The Benhti Economic Development Corporation, owned by the village of Minto is located at 100 Cushman St. in Fairbanks, Suite 306, with a board made up of Carla Dick, Wilma David and Darlene Wright.

Isaacson says that Minto Money is a wholly owned subsidiary of the Benhti Economic Development Corporation and that the Minto Development Corporation “has not been managing the Minto Money portfolio for the past two years.”

The lawsuit claims, however, that “the primary beneficiary of the loans made through the Minto Money website is Isaacson.”

“When aggrieved consumers complain about Minto Money to organizations such
as the Better Business Bureau (“BBB”), Isaacson responds personally to the complaints, identifying himself as the “General Manager” of Minto Financial,” the plaintiffs claim.

Responding to some 2020 complaints, Isaacson wrote that the loans are “legal under applicable tribal law.”

Previous lawsuits against Minto Money have been settled out of court. The same thing may happen here.

Lawyers for Minto Development, Benhti, Isaccson and Minto Money have filed with the federal court in Illinois seeking a delay in responding while settlement negotiations proceed.

On March 14, a federal judge denied a motion to move a separate Illinois fraud case against Minto Money to Alaska. That case ended May 8, when the parties agreed to settle, the same day the new lawsuit was filed.

Your contributions help support independent analysis and political commentary by Alaska reporter and author Dermot Cole. Thank you for reading and for your support. Either click here to use PayPal or send checks to: Dermot Cole, Box 10673, Fairbanks, AK 99710-0673.

Write me at dermotmcole@gmail.com