An Oklahoma judge recently dismissed a lawsuit against former Banking Commissioner Howard Pitkin alleging he had wrongfully overstepped his authority when he fined an Oklahoma Indian tribe for violating Connecticut’s small-dollar lending laws.
The complaint leveled against Pitkin by the Otoe-Missouria Indian Tribe alleged that former commissioner did not have the jurisdiction to fine Clear Creek Lending or Great Plains Lending, the tribe’s small-dollar lending subsidiaries. Last week, U.S. District Judge Joe Heaton in Oklahoma dismissed that complaint.
According to court documents, those companies had made loans carrying interest rates over 12 percent to individuals, some of them Connecticut residents, over the Internet. Late in 2014, the state banking department reacted with a temporary cease-and-desist order, demanding they stop violating Connecticut law, asking for a list of Connecticut residents who had applied for or been granted those loans, and finally demanding they make restitution of the excess interest to those Connecticut residents.
The lending companies instead moved to dismiss those enforcement actions on the basis of sovereign immunity. Pitkin dismissed that motion, writing that Clear Creek and Great Plains had made loans to at least three Connecticut residents that were under $15,000 and which carried annual interest rates ranging from 199.44 percent to 448.76 percent, well in excess of Connecticut law.
When the companies, along with Tribal Chairman John Shotton, failed to respond to the banking department’s orders, Pitkin fined the two lenders and the chairman a total of $1.5 million in civil penalties.
The tribe shot back that Pitkin did not have the authority to fine them because their operations were headquartered in Oklahoma, that the focal point of Pitkin’s efforts was the state in which the companies were headquartered.
But Heaton rejected that argument, writing: "That the alleged violators lived in, or were based in, Oklahoma was incidental. The ‘focal point’ of defendants’ efforts was Connecticut, not Oklahoma."
