How ‘all of it deciphered’ for one online tribal loan provider

Earlier this month, a federal judge in Virginia provided last approval to a settlement including Elevate Credit, an openly traded loan provider based in Fort Worth, Texas. It was a peaceful coda to a short-term age when deep-pocketed business partnered with Native American people in an effort to navigate around state limitations on high-cost customer loans.

Under the settlement, Elevate accepted pay $33 million to solve lawsuits associated to a predecessor business’s transactions with different people.

The cash will mainly go to U.S. customers who got loans online at rate of interest of as much as 400% or greater. Attorneys for the debtors have actually been targeting different individuals and entities related to Think Finance, a now-defunct business that partnered with people on high-cost customer loans, then later on spun off Elevate and declared insolvency.

Kenneth Rees (left) was previously the CEO of Think Finance, which, prior to declaring insolvency, partnered on high-cost customer loans with the Otoe-Missouria Tribe in Oklahoma. The people’s chairman, John Shotton, is displayed in a 2014 image.


“Think Finance was a behemoth back in the day, before it all unraveled,” stated Andrew Guzzo, a lawyer in Virginia who represented debtors in the class-action lawsuits. Referring to high-cost tribal loans, he included: “”No one’s doing this any longer at this volume.”

The settlement, which received final approval on Aug. 16, is the latest blow to the tribal lending experiment — a well-funded attempt, about a decade ago, to work around state interest rate caps.

The Elevate settlement follows a number of other large payments by people and entities associated with Think Finance. Including two previous settlements, the various defendants have now agreed to pay around $155 million and to cancel more than $760 million in consumer debt.

Over the last several years, lawsuits brought by both regulators and private litigants have exposed numerous details of the business arrangements between Native American tribes and Think Finance. They have also shed light on how assets were transferred from Think Finance to Elevate before the former company’s bankruptcy filing.

Shortly after the latest settlement agreement was reached in February, Elevate said in a securities filing that it denied any wrongdoing or liability.

“We are happy to put this matter behind us,” Elevate CEO Jason Harvison said in a statement at the time. “These contracts are, without a doubt, in the very best interest of all Elevate stakeholders. The resolution of the tradition lawsuits permits Elevate to progress and unlock worth for investors with our ongoing concentrate on ingenious credit services for daily Americans.”

On Friday, an Elevate spokesperson declined to provide additional comment.

Think Finance’s roots date back to a consumer lending company called ThinkCash. More than a decade ago, ThinkCash partnered with First Bank of Delaware on high-cost loans, according to a 2020 court filing by the plaintiffs in litigation related to the Think Finance bankruptcy.

First Bank of Delaware eventually ceased operations after repeatedly being cited by bank regulators for violations.

In 2011, Think Finance began entering into contracts with tribes, including the Otoe-Missouria Tribe in Oklahoma.

“Short-term financing on the web for us has actually been among the most effective endeavors we have actually been associated with considering that video gaming,” John Shotton, chairman of the Otoe-Missouria Tribe, said in a 2014 interview with Bloomberg. Shotton did not respond Friday to requests for comment.

Think Finance and its partners sought to rely on the concept of tribal sovereign immunity — a doctrine that can protect tribes from certain lawsuits — as a legal shield.

But under its contracts with tribes, Think Finance had control of the lending operations, providing services related to loan collections, loan servicing, marketing and human resources, according to the 2020 court filing.

A joint venture between Think Finance and an investment fund called Victory Park Capital purchased roughly 99% of the participation interests in loans within 48 hours, the filing alleged.

Billions of dollars in revenue were generated, and Think Finance was entitled to the “frustrating bulk of the earnings,” according to the court filing.

Soon came regulatory scrutiny — both from various states and, eventually, from the Consumer Financial Protection Bureau.

In 2014, Pennsylvania Attorney General Josh Shapiro sued Think Finance and former CEO Kenneth Rees. The same year, Think Finance transferred various assets to Elevate, where Rees went on to serve for several years as chief executive and chairman of the board before stepping down in 2019.

Under the deal, a purported tax-free spinoff, Elevate received hundreds of millions of dollars worth of assets without paying anything, lawyers representing borrowers later alleged. Meanwhile, Think Finance was left undercapitalized and saddled with liabilities, according to lawyers who later sought to recoup money on behalf of borrowers.

“As the regulators were surrounding individuals in tribal financing, a variety of them attempted to safeguard their possessions and prevent liability through complicated business deals or transfers,” said Gary Leibowitz, a lawyer who sought to recover money from Elevate as part of the Think Finance bankruptcy case.

“There’s absolutely nothing naturally incorrect with tax-free spinoffs — they take place all the time — as long as they please the necessary aspects,” Leibowitz said. “To do it properly, to name a few things, both business need to be solvent after the spin and continue in organization for an amount of time.”

Think Finance declared insolvency in October 2017 — about 6 months after Elevate finished its going public.

Since 2018, shares in Elevate have actually fallen from a peak of more than $10 to $1.52. The business’s market capitalization on Friday was around $47 million.


A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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