No, they are not, mainly because the interest rates they charge violate New Jersey's usury laws . New Jersey has an interest rate cap of 30%, and the lowest rate offered by Western Sky is 89.68%.
They get around this because the company exists on the Cheyenne River Sioux Reservation, a sovereign nation located within the United States of America. What does that mean? It means that they are not subject to federal or state criminal usury laws, so they can charge you whatever they want!
How Do They Get Away With It?
When companies operate over the Internet or across state lines, applicable laws can get murky. In addition, Western Sky tries to prevent you from invoking New Jersey law against them! Their "Terms of Use" page states:
"All loans will be subject solely to the exclusive laws and jurisdiction of the Cheyenne River Sioux Tribe, Cheyenne River Indian Reservation. All borrowers must consent to be bound to the jurisdiction of the Cheyenne River Sioux Tribal Court, and further agree that no other state or federal law or regulation shall apply to this Loan Agreement, its enforcement or interpretation." (emphasis mine)
Can I Sue Them?
They also try to limit your ability to sue them:
"The loan agreement contains an agreement to arbitrate all disputes in which borrowers agree to waive their right to a jury trial, to have a court decide any dispute, and to participate in a class action lawsuit [I wonder why that's in there], and to certain discovery and other procedures that are available in a lawsuit."
They do this not only to prevent you from suing them, but also to make it easier to collect. Bank account access is often a requirement of these loans, so they can take the payment directly out of your account without having to sue to collect.
What Can I Do?
You can opt out of this provision:
"If you do not wish your account to be subject to this arbitration agreement, you must advise us in writing. It is not sufficient to telephone us. we must receive your letter or e-mail within sixty (60) days after the date your loan funds or your rejection of arbitration will not be effective."
Even then, they try to keep you from disputing the usurious interest ratein a New Jersey court by saying, "In the event you opt out of arbitration, any disputes hereunder shall nonetheless be governed under the laws of the Cheyenne River Sioux Tribal Nation."
Taking out a loan with Western Sky is often a sign of severe, long term financial difficulty. Unfortunately, this is not a wise solution to the problem. You may need to file bankruptcy. To find out if you do, download my free book, Am I In Too Deep? A Guide to Knowing When You Need to File Bankruptcy in New Jersey.
So What SHOULD I Do?
Be smart about how you handle your debt. If you borrowed money from Western Sky to cover other debts, you need a better approach. Get more information on how to fight back with your creditors! Download my free book, The Biggest Secrets Your Creditors Don't Want You to Know. Become empowered and protect your rights!
However, if your debt is overwhelming you, and you are wondering whether you need a solution to a bigger problem, then download my free book, Am I In Too Deep? A Guide to Knowing When You Need to File Bankruptcy in New Jersey to find out if bankruptcy might be the right solution. You could also just give me a call and come in to discuss it further!
If you live in the Gloucester County, New Jersey area, are in severe financial distress, and are considering filing bankruptcy, call my office at 856-432-4113 or contact me through this site to schedule an appointment in my Woodbury office to discuss the best way to handle your situation. I have been helping people in Camden, Gloucester, and Salem Counties for over 20 years; hopefully, I will be able to help you as well.
