A controversial personal loan company on the Cheyenne River Reservation is laying off nearly its entire workforce.
Western Sky Financial says due to 'unprecedented government interference' it has already laid off a majority of its employees in Timber Lake, South Dakota and it will be shutting down its office in Eagle Butte by September 3.
The company blames the more than half dozen federal lawsuits it faces across the country.
The Federal Trade Commission filed a lawsuit against the companies in 2011 alleging illegal collection practices. Numerous other states have accused Western Sky of issuing illegal online loans with interest rates as high as 340 percent. Just in the last month New York, Michigan and Georgia sued the company.
Martin ‘Butch’ Webb, who is a member of the tribe, argues he his nine companies that operate from the Cheyenne River Reservation have tribal immunity to charge the rates.
"I think the biggest thing to address is that we're an open and honest company,” Webb said in an interview with KELOLAND News in November. “We're here to make an impact on people's lives and it's been a positive impact. We hope to keep doing it. We're not offering anything that isn't being offered elsewhere. We're an online lender.”
At one point the company was employing up to 170 workers on the reservation. In a statement Friday Western Sky said the lawsuits have forced the lay offs.
"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 mayor of Eagle Butte told KELOLAND News Friday that the announcement will have an impact on the community.
"I've seen a lot of posts on social media this morning that there's so many of them that are devastated. Where are they going to go? They're going to have to move if they want employment or they're going to have to depend on the tribe for help," Eagle Butte Mayor Stephanie Davidson said.
To get an idea of just how big Western Sky has become the New York Attorney General estimates that the online lender has issued $38 million worth of loans since 2010 in that state alone with finance charges reaching $185 million.
Western Sky is hopeful it can hire back employees once all of its court cases are settled.