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Cherokee per capita checks can no longer be voluntarily garnished

By Rose Hooper
Money lending practices to members of the Eastern Band of Cherokee Indians dramatically changed following the case of lender Huey Buchanan of Sylva.

In Cherokee Tribal Court this week, Buchanan, a Sylva bail bondsman, was seeking to collect payments from more than 1,600 enrolled members. Buchanan lent money to tribal members and told them he would take payments from their per capita checks.

"It seemed like a good deal to me," said a tribal member from Snowbird who asked not to be identified. "I borrowed $1,000 from Mr. Buchanan, who told me that he would take the money from my December per capita check. I thought, well, if I didn't see it, I wouldn't spend it. "Only he neglected to tell me the payback percentage was 100 percent! Our December checks were for $1,951; he garnished my whole check, plus some on my June check," she said.

Other enrolled members who crowded in the courtroom Monday said when they borrowed money from Buchanan they were unaware they would be charged such a high rate of interest. According to the tribal finance office, 2,425 checks were garnished in December. Per capita checks are issued twice a year based on proceeds from Harrah's Cherokee Casino. Fifty percent of the casino's yearly net proceeds is distributed to tribal members on a per capita basis. The other half of the money goes to tribal operations.

Some 79 pages made up this week's court docket, with approximately 20 names per page. Buchanan was seeking to have these individual's per capita checks, which are currently being held in trust by the tribe, released to him.

Tribal Council passed an ordinance in April that said all voluntary garnishments, previously handled through the clerk of court's office, would now be handled by the tribe's finance office. When officials in the finance office and Tribal Council discovered the large number of garnishments allowed by the clerk of court, they decided to set hearings on the garnishments. Judge Steve Philo said Monday's hearings focused on four issues. "First and foremost," Philo said, "is there a valid underlying debt; secondly, how much is that debt? Third, the lender will be allowed 2 percent interest per month, no more than 24 percent per annum, on the debt. And fourth, does the borrower raise any defense." Buchanan's loan amounts to tribal members ranged from $300 to $1,830, according to the court docket.

Before the proceedings began, attorney Mose Highsmith told the enrolled members present that if they had not been served with papers to appear in court, they could ask for a dismissal. He further told the members that if they had not been allowed legal counsel, they should contact their Tribal Council representative.

Council members Tommye Saunooke, Brenda Norville and Teresa McCoy appeared briefly at Monday's afternoon session. Philo explained the difference between voluntary garnishments and involuntary garnishments to those in the courtroom. Involuntary garnishments, he said, are for court-ordered child support or for debts owed to the tribe. These will continue as ordered by the court. However, the finance office and the court will no longer allow voluntary garnishments, like withholding of funds to pay a debt.

"We will be accepting no future assignments of per capita," said Jessie Swimmer of the tribal finance office. "A lender can no longer garnish any per capita checks."

Although Buchanan was the main lender on each of the 79 court docket pages, his attorney Russell McLean was listed as a lender in two cases. Also seeking compensation as lenders were Jimmy Fortner, Everett Reagan, and Theodore Frankiewicz. John Bradley, lease compliance officer with Qualla Housing, was seeking compensation from one client. As he did Buchanan, Philo told these lenders they would only be allowed to collect 24 percent interest. "OK, the Tribal Courts are allowing 24 percent interest for loans on the reservation, but I was in Sylva when I borrowed money from Mr. Buchanan. Does that mean tribal law or state law applies?" asked one member who lives off the reservation.

According to state law, no private lender in North Carolina can charge more than 16 percent interest on a loan. Also, state law regulates that no more than 15 percent interest can be charged for bonds provided by a bail bondsman.

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