Vanderbilt Journal of Entertainment & Technology Law

First Page



In 1886, the US Supreme Court wrote that, for Indian tribes,"the people of the states where they are found are often their deadliest enemies." Recently, state agencies and regulators have continued that tradition of hostility by improperly attempting to regulate electronic commerce businesses operated by tribal governments that are more properly subject to regulations established by tribal law and subject to federal oversight. Despite the fact that these online businesses operate exclusively under tribal law and make their tribal affiliation clear to customers, certain state regulators have demanded absolute compliance with state law, even when such laws are from states thousands of miles away. Not only does this over reaching by uninformed state regulators limit the products available to consumers, it also severely undercuts on-reservation economic development, imperils tribal electronic commerce, and challenges basic notions of tribal sovereignty.

Businesses and consumers entering into commercial contracts rely heavily on consistency and predictability in contracting, including when the parties mutually agree to apply tribal law or utilize tribal courts to resolve disputes. Uniform interpretation and enforcement of such agreements are critical to ensuring continued investment in tribal businesses. With over one quarter of American Indians living in poverty--nearly twice the national average--it has never been more important to promote confidence in the Indian economy. When courts do not give full force and effect to contracting parties' desires to resolve their private disputes using tribal courts and tribal law, this confidence is threatened. While it is unclear how this controversy will ultimately play out, one thing is certain: states are not only undermining tribal innovation and harming tribal economies but also attacking tribal sovereignty itself. Perhaps lost in the legal rancor, however, are the very real human and economic consequences of the loss of tribal revenues from e-commerce business, as well as the potential damage to tribal e-commerce as a whole. This Article presents results of empirical research into the economic impact of tribal online lending in Indian Country. The Article first frames the issue with a brief summary of the legal foundations for tribal e-commerce and tribal lending in particular. Next, the Article presents several case studies of tribes that have engaged in online lending, focusing on the direct economic impact to those tribal communities. Finally, the Article concludes with policy arguments as to why state and federal regulators should support rather than suppress tribal e-commerce, including tribal small-dollar online lending.