Eagle Butte, SD
The controversial high-interest personal loan company located on the Cheyenne River Sioux Reservation is laying off a majority of its workforce because of what it calls ‘unprecedented government interference.’
Western Sky Financial laid off nearly all of its employees in Timber Lake Thursday and told workers in Eagle Butte Friday that it will close that location by September 3. A total of 120 jobs will be lost.
Western Sky Financial and Payday Financial LLC are being sued by more than a half dozen states and the Federal Trade Commission for their loan practices. Martin ‘Butch’ Webb owns the companies that issue loans with interest rates as high as 340 percent. Webb says because the businesses operate on the reservation, and he is an enrolled Cheyenne River Sioux Tribal member, he has immunity and does not have to abide by the laws of the states where the online loans are distributed.
New York, Michigan, and Georgia have all filed lawsuits against Western Sky just in the last month claiming that the company is violating usury and licensed lender laws.
In a statement Friday, Western Sky said the continued court action has forced them to, “redirect their business resources in a way that recognizes these unsubstantiated challenges to their ability to make such consumer loans.”
Western Sky will only have 17 employees left after it closes the Eagle Butte office.
“This affects the families of all tribal members who are losing their jobs but, collectively, the loss of these jobs will affect the broader economic stability of this poverty-stricken area,” Webb said in the statement.
The FTC didn’t wasn’t aware Friday that Western Sky was closing but a spokesperson says they will continue their court action.
Western Sky hopes to hire back the employees once all of the issues have been resolved in court.