TrueAccord’s True Crime
Debt collector profited from collecting on illegal “rent-a-tribe” loans
Jason Mikula in Fintech Business Weekly reports on a consent order in Connecticut that has TrueAccord in trouble for collecting on illegal, high-interest rate loans.
Here’s more:
Digital debt collection startup TrueAccord, backed by marquee investors that include Nyca Partners and American Express, entered into a consent order with the Connecticut Department of Banking late last month to resolve charges it violated state law by collecting on small-dollar, high APR loans originated by lenders affiliated with federally recognized Native American tribes.
The order stems from the result of a recent exam, which found TrueAccord collected on loans illegally originated to Connecticut borrowers by a tribal lender from January 2015 until at least November 2020.
Mikula notes that these “rent-a-tribe” schemes gained popularity in the last decade but appear to waning:
So-called “rent-a-tribe” arrangements that are used to skirt state usury caps to offer high-interest, short-term loans exploded in popularity in the 2010s. But by the end of the decade, the bigger players in the space, including now-notorious Scott Tucker and Dallas-based Think Finance, faced numerous legal…