Proper Oversight of Licensees Begins with an Audit

With over 50 Tribal Licensee Compliance Audits performed, VP Compliance has developed a best in class Licensee Compliance Audit Program.

Recent Regulatory News – arm-of-the-tribe-test

The California Supreme Court recently shifted the burden of proof from the state to the tribal entity asserting sovereign immunity.

The Court also adopted a modified version of the arm-of-the-tribe test set out in Breakthrough Mgmt. Group, Inc. v. Chukchansi Gold Casino and Resort, 629 F.3d 1173 (10th Cir 2010).  The court required the tribal lending entities to prove they were arms of their tribes based on the following factors:

  1. The entity’s method of creation;
  2. Whether the tribe intended the entity to share in its immunity;
  3. The entity’s purpose;
  4. The tribe’s control over the entity; and
  5. The financial relationship between the tribe and the entity.

Benefits of a Licensee Audit

  • Proves proper and required oversight of each lending program
  • Identifies servicing risks to be corrected
  • Provides proof to tribal regulator and federal regulator that lending programs are operating within compliance

Risks of not Performing Licensee Audits

  • Increased CFPB and FTC complaints
  • CFPB fines and penalties
  • The potential that a Tribe’s reputation could be damaged by the actions of a licensee
  • The financial losses suffered as a result of a licensee’s deception.

For more information on how our services can benefit your organization contact us at (877) 350-9933 X5 or wrw@vpcs.biz.

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