Minnesota files lawsuit against Wisconsin tribal company over suspicious loans

A northern Wisconsin tribal lending operation will stop making allegedly predatory loans in Minnesota – and cancel existing loans – under an agreement with the state attorney general’s office.

The tribe’s business arm of Lac du Flambeau, which has operated at least a dozen separate lending companies, is one of the most active tribal lenders in the country and in Minnesota. Minnesota Attorney General Keith Ellison’s office estimates that LDF companies have made more than $1 million in loans in the state in recent years.

LDF lenders, operating under several names including Radiant Cash, Cash Aisle and Mawa Finance, charged interest rates “exponentially higher” than Minnesota law allows, the Attorney General’s Office claims in a lawsuit filed Tuesday in the U.S. District Court for Minnesota .

These annual rates “routinely” range from 200% to 800%, said the lawsuit, which alleges violations of Minnesota’s usury laws as well as the state’s deceptive trade practices, false advertising and consumer fraud prevention statutes.

The loans, which are typically under $2,000 and often under $1,000, are targeted at people in need of immediate cash. LDF lenders told Minnesota consumers that their tribal owner’s out-of-state status – and tribal law – allowed them to avoid compliance with Minnesota law, Ellison alleged in the lawsuit.

The lawsuit was filed against John Johnson as chairman of the board of LDF Business Development Corp., which ultimately owns the tribe’s lending business. Johnson is also president of the Lac du Flambeau band, although he is not named as a defendant in connection with that role.

Ellison’s office also on Tuesday filed a motion in federal court seeking Johnson’s approval, which would have canceled earlier loans in Minnesota. LDF lenders stopped collections or reduced the balance to zero on loans to Minnesota residents between July 24, 2016 and October 1, 2023, said the consent order, which must receive court approval.