Connecticut Banking Commissioner Jorge Perez has dismissed administrative proceedings and a civil penalty in a yearslong case against two Oklahoma-based tribal lenders following orders from Connecticut state courts.

The administrative proceedings against Great Plains Lending and Clear Creek Lending – both owned by the Otoe-Missouria Tribe – began in 2014 after the Connecticut Department of Banking issued the online lenders a temporary cease-and-desist order. Then-commissioner Howard Pitkin had alleged that the lenders were not licensed in Connecticut and had interest rates on small-dollar loans that exceeded those allowed by Connecticut law.

The tribal lenders countered that they had sovereign immunity from Connecticut laws. The commissioner denied a motion to dismiss the case, and civil penalties of $700,000 and $100,000 were issued against Great Plains and Clear Creek, respectively. Another $700,000 penalty was issued against Tribal Chairman John Shotton.

The issue of sovereign immunity continued for several years until the Connecticut Supreme Court ruled in May that Great Plains had met its burden of demonstrating that it is an arm of the tribe and that Shotton, as an officer of Great Plains and the tribe, was entitled to sovereign immunity against civil penalties. The ruling also found that Shotton was “not immune from injunctive relief prospectively enjoining him from violating Connecticut usury and banking laws in connection with his duties for the tribe and the entities.”

The case was returned to New Britain Superior Court, which in July directed the banking commissioner to dismiss administrative proceedings against Great Plains and vacate the civil penalty against Shotton.

In his order dated Sept. 2, Perez also dismissed the administrative proceedings against Clear Creek.

Acknowledging that Clear Creek had ceased doing business in Connecticut in February 2015, Perez said that a class action settlement approved in July by a federal court in Virginia, Solomon et al. v. American Web Loan Inc., made Connecticut residents who had received small loans from Clear Creek eligible for a cash payment and/or loan cancellation, and negative credit reporting related to the loans would be deleted as well.