Are tribal loans legal in Maryland?

Only within limits that most tribal lenders do not observe. Maryland applies a rate cap or licensing regime that these lenders generally do not hold, so a loan made to you anyway may be challengeable. Loans above 33% APR are usurious and unenforceable, so tribal and payday high-interest loans are restricted and challengeable in Maryland. The state actively halted Western Sky’s lending and delivered redress.

33% APR maximum (roughly 24–33% depending on loan size); payday loans have been effectively illegal since 2002. The controlling law is the Maryland consumer-loan usury cap (made payday illegal in 2002); enforced by the Office of Financial Regulation. Tribal lenders argue this cap does not bind them because they answer to tribal law — that argument is exactly what state enforcement and private litigation have been testing.

In February 2011 the Commissioner issued a cease-and-desist against Western Sky Financial and Martin Webb, culminating in a $2 million settlement with Western Sky, CashCall and related parties (2014). Sovereign immunity protects a lender from being sued; it does not give it extra power to collect from you, and it does not override Maryland law on whether the debt is enforceable in the first place. Threats of arrest are always false.

Possibly not — and this is the question worth answering before you pay anything more. Where a loan exceeds Maryland's limits it may be void or uncollectable regardless of what you signed. Get the answer before you keep paying, and check whether your lender is one of the closed brands whose balances were cancelled in a settlement.

File a complaint with the Maryland Office of the Commissioner of Financial Regulation. Loans above the 33% cap are illegal and may be void — dispute the debt. You can also file with the federal CFPB, which accepts complaints about tribal lenders regardless of your state.