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Veterans face 'life or death' crisis as hundreds of therapists quit over Trump

As Jason Beaman recounts his long slog searching for mental health therapy last year, he sounds defeated.

The first therapist assigned to him by the Department of Veterans Affairs told him at their initial meeting that she was leaving the agency. A few months later, his second therapist told him she was also leaving. An appointment with a third counselor was canceled with no explanation.

These were huge setbacks for the 54-year-old veteran of the Navy and Army Reserve. Nearly a decade ago, a spiral of depression and anxiety left him homeless and living on the streets of Spokane, Washington. A VA social worker threw him a lifeline, helping him apply for benefits, find housing and get into therapy.

He still needs mental health care, he and his physician say. But bouncing from therapist to therapist has left him exhausted.

“I just quit. I don’t want to mess with the therapist anymore,” Beaman said. He spends much of his time now alone playing video games or walking with his dogs.

After President Donald Trump returned to office last year, his administration announced plans to overhaul the VA, one of the largest health care systems in the country, to deliver “the highest quality care.”

“This administration is finally going to give the veterans what they want,” VA Secretary Doug Collins said last March, as the department announced tens of thousands of job cuts.

But in interview after interview, veterans across the country told ProPublica that one year into the second Trump administration, it’s become more difficult to get treatment, as hundreds of therapists and social workers have left the VA. Many of them have not been replaced.

While front-line mental health care workers were largely exempted from the job cuts, hundreds chose to leave anyway. Some cited disagreements with new administration policies, including several targeting the LGBTQ+ community, while others, facing diminished ranks, said they simply could no longer provide proper care.

In January, the department had around 500 fewer psychologists and psychiatrists than it had at the same time last year, ProPublica found.

Although the losses represent a relatively small number — about 4% of psychologists and 6% of psychiatrists — they are notable for an agency that has long struggled with inadequate mental health staffing. For years, administrators have listed psychologists in particular among their most “severe staffing shortages.”

Mental health is not the only area where the VA has lost medical staff. The agency has eliminated more than 14,000 vacant health care positions across the system, according to data first reported by The New York Times.

Data published by the VA going back to May 2023 shows that the agency was adding psychologists every quarter until Trump’s return to the White House. Then, the trend flipped, with departures outpacing hires in all four quarters of last year.

Compounding the losses, the agency’s cohort of social workers, some of whom are licensed therapists who provide mental health counseling, declined by nearly 700 staffers over the year.

To better understand the departures and their impact on veterans’ care, ProPublica interviewed dozens of former and current VA staffers as well as patients.

ProPublica also examined a previously unreported internal employee exit survey, which included hundreds of responses from mental health care workers.

“Mental Health is understaffed, burned out, and there is not enough mental health care for the Veterans who need the services,” wrote one New York-based former employee, according to the records.

“Support is no longer there to provide ethical and good care for these Veterans,” wrote a second, based in Indiana. “Scheduling issues are incredibly high due to poor staff hiring and retainment.”

Yet another wrote that the number of new patients seeking help at their Kansas facility was far too high, making it “unethical to accept more veterans in our clinics.”

Many of those vacated positions have gone unfilled due to a yearlong hiring freeze, which was only lifted in January.

Echoing the exit survey, many who remain on staff describe crushing workloads as they struggle to fill the gaps. Those reached by ProPublica, who agreed to speak only under the condition of anonymity for fear of retaliation, said that as staffing losses mount, they’ve seen their patient loads increase, while administrators shorten their appointments and pack more and more clients into group therapy sessions.

“It was always bad,” said one VA psychologist, referring to staffing at a facility in Arizona. “And now it’s at a breaking point.”

The therapist described being stretched so thin that schedulers replaced some one-on-one sessions with online group sessions that included as many as 35 veterans. The therapist said despite that they were still overloaded with individual sessions and had to limit each one to as little as 16 minutes.

The VA declined ProPublica’s request to interview an official familiar with its mental health programs. In an email, VA spokesperson Peter Kasperowicz accused ProPublica of attempting to mislead the public by “cherry picking issues that are limited to a handful of sites and in many cases were worse under the Biden Administration.”

He argued that the agency’s performance around mental health has improved since Trump took office, citing more than 15.5 million direct mental health care appointments in the most recent fiscal year (Oct. 1, 2024, to Sept. 30, 2025), a 4% increase from the previous fiscal year. He did not say whether those additional appointments were for individual therapy. Kasperowicz also noted that the administration has opened 25 new health care clinics.

After ProPublica shared its findings and the names of veterans who would appear in this story, the agency reached out to several to inquire about their care and offer help. The veterans told ProPublica they remained skeptical that the VA would consistently respond to their mental health needs.

As the ranks of mental health care providers at the VA have shrunk, the department has proposed shifting billions of dollars into community care, a program in which veterans obtain health care via private physicians and other providers. But the program has been stretched thin amid the loss of administrative staff and ongoing issues finding private therapists, ProPublica found, with veterans encountering longer delays as they seek help.

In December, patients waited an average of around 25 days just to receive a confirmed appointment date, nearly four times the VA’s stated goal for scheduling community care.

Collins has disputed assertions that there’s a systemwide problem with access to mental health care. “And if you need emergency care, or are in a crisis situation, you have immediate care,” he told a Senate committee in January.

He said the VA’s average wait time for new patients seeking mental health care appointments was less than 20 days, the number it has set as its goal. But other VA officials have acknowledged problems with access.

“There are wait times at some facilities that are beyond what our expectations and standards would be,” Dr. Ilse Wiechers, assistant undersecretary for health for patient care services, told senators at a separate hearing.

ProPublica’s analysis found that wait times fluctuate dramatically, and fast access to care can depend on location. For example, the small clinic near Beaman’s home in rural Nebraska, with its comparatively small staff, saw appointment wait times for new mental health clients climb as high as 60 days in December and drop to 20 days in February, according to the VA figures.

But a closer look at the entire VA system reveals that a large number of facilities are struggling. In early February, more than half of its hospitals and clinics reported one-on-one mental health appointment wait times for new patients that were longer, and in some cases far longer, than the VA’s 20-day goal, according to a ProPublica analysis of data published on the agency’s website.

In late December, Beaman said he received an email from the VA saying he’d been approved for additional therapy. He was able to meet with a therapist in January — after about six months of waiting and going more than a year without a session. In the interim, he said, he relied on prescription medications, video games and his therapy dogs to keep him steady. Still, his anxiety worsened, he said, and now he often feels so uncomfortable around others that he rarely leaves his home except to walk his dogs while wearing headphones so no one speaks to him.

Kasperowicz, the VA spokesperson, wrote in his email to ProPublica that Beaman had “more than a dozen mental health visits at VA between late 2024 to mid-2025 through the Cheyenne VA clinic” in Wyoming, which is about an hour-and-a-half trip for Beaman. Kasperowicz declined, however, to say whether those appointments involved the one-on-one mental health counseling Beaman had requested. Beaman said he only had two sessions for one-on-one therapy in 2025 — meetings that were truncated because of the therapists’ impending departures.

Kasperowicz also said that one of Beaman’s appointments didn’t occur because he had “moved.” Beaman, however, said he has lived at only one address in Nebraska.

Experts warn that the exodus of mental health care providers from the VA has hurt the agency’s ability to meet veterans’ unique needs.

“VA psychologists are best in class,” said Russell Lemle, former chief psychologist for the San Francisco VA Health Care System and a senior policy analyst at the Veterans Healthcare Policy Institute. “They have research and training and decades-long experience” working with veterans.

“When you lose them, the veterans are the ones who pay the price,” he said.

“It Could Mean Life or Death”

Michelle Phillips, 56, a Navy veteran from Ohio, saw her therapist in remote sessions once a week for two years for her PTSD. Then, in December, Phillips’ therapist told her that she was quitting the VA because of Trump’s policies.

The change, Phillips said, “could mean life or death.”

Years of depression have led Phillips to isolate. Inside her small home about an hour outside of Columbus, the city where she enlisted in 1988, the walls are filled with reminders of brighter times — photos of family members and military paraphernalia from her time in the service. Her only real company is an aging dog, and she almost never leaves.

Her virtual therapy sessions were “the only contact that I had coming in my home to talk to me every week,” she said. “And I would sit and just wait for that appointment.”

Phillips said the counselor requested that the VA continue her one-on-one remote counseling with a new therapist — which totaled about four hours per month. The agency initially offered her virtual group therapy, an option that her previous therapist dismissed as inappropriate. In the third week of January, the VA told Phillips she could have an appointment for one-on-one sessions in March. She later declined the appointment because she didn’t want to face starting over with a new therapist.

Phillips, who is disabled and doesn’t work, said she will try to pay for one-on-one therapy out of pocket with the same therapist who left the VA but will likely only be able to afford one, possibly two, sessions a month.

James Jones said his close connection to his VA therapist, who was trained in combat trauma, helped him control his PTSD-fueled episodes of anger and alcohol abuse. Now the 54-year-old Gulf War veteran, who lives in the Blue Ridge Mountains of North Carolina, has seen his care cut in half after his therapist told him colleagues had quit and he had to pick up the load.

His sessions went from an hour every week to half an hour every two weeks. “I can tell it’s rushed,” said Jones, a maintenance mechanic with the National Park Service. “I’m not able to work through something.”

Others have found it difficult to establish care in the first place.

Last summer, George Retes, 26, who left the Army in 2022 after serving for four years, was driving to work in Camarillo, California, when he was suddenly caught between immigration agents and protesters. Retes said the agents broke his car window, pepper-sprayed him and detained him for days. The incident, which ProPublica detailed last fall, left him shaken and exacerbated the PTSD that was first sparked after he faced missile attacks in Iraq, Retes said. (The Department of Homeland Security has not responded to ProPublica’s questions about Retes.)

Following his release, Retes found himself withdrawing from the world. “I wasn’t texting anyone or talking to anyone,” he said. “Not even my kids.”

A few weeks after being arrested, Retes sought help from the VA clinic in Ventura, California, where staffers told him they’d be in touch for an appointment. But Retes said he never heard back, even after he called to follow up. His incident with Immigration and Customs Enforcement was in July. Retes is still waiting.

According to data on the VA’s website, new patients seeking individual therapy at the Ventura clinic had to wait an average of two and a half months in early February.

The VA said it could not discuss Jones’ or Retes’ accounts because the veterans declined to waive their privacy rights.

Strains on the System

The VA overhaul has also taken a toll on mental health providers, many of whom quit after spending years at the agency.

Natalie McCarthy worked as a social worker and mental health therapist for a decade before quitting the VA in May. Like many others working in mental health, she did all of her work remotely; from her Ohio home she saw vets mostly from the Washington, D.C., area.

But McCarthy and her colleagues faced pressure to return to agency offices after the VA issued new restrictions on telehealth workers. She was uneasy about the prospect of having to conduct sessions in makeshift spaces like conference rooms filled with other counselors — a situation that raised widespread ethical concerns over the legally mandated privacy for medical conversations.

Complicating matters, McCarthy said, were Trump’s orders eliminating diversity and equity initiatives within the federal government. She said she began to worry that therapists would no longer be able to discuss the subject of race with their patients or document patients’ thoughts on the topic in their session notes. So she quit.

“I was angry that veterans were in that position,” said McCarthy, who started her own practice. “I was angry that I was in that position. It just felt like an unnecessary thing to have to navigate.”

Psychologist Mary Brinkmeyer found herself in a similar situation. She started at a VA facility in metropolitan Norfolk, Virginia, in 2022 after seeing a posting for an LGBTQ+ care coordinator, which oversees support programs for LGBTQ+ veterans and helps navigate their care. She quit last February after her superiors began enforcing Trump’s anti-diversity orders.

Brinkmeyer said she was told to stop conducting training for physicians and other staff on best practices for caring for LGBTQ+ patients. Then, she said, staff members were ordered to remove all LGBTQ+ paraphernalia from the facility such as rainbow flags, identity-affirming literature and program brochures. Also, an edict was issued directing people to use the bathroom of their gender assigned at birth, Brinkmeyer said.

That’s when the VA stopped feeling like a welcoming place. “There was a failure of empathy,” she said.

The VA did not respond directly to either Brinkmeyer’s or McCarthy’s accounts of how the administration’s policies had impacted the quality of mental health care.

Much like those seeking mental health care directly from the VA, veterans referred to community care are also struggling to secure appointments.

Gwyn Bourlakov, 58, enlisted in the Army National Guard in 1998 and over the following 21 years she was awarded a Bronze Star for her service in the invasion of Iraq, climbed the ranks to become a major and won a Fulbright scholarship to study Russian history.

Today, after a series of professional setbacks, Bourlakov works as a museum security guard. Lingering PTSD from her time in the service, coupled with deep bouts of depression over her current circumstances, have kept her seeking the VA’s help despite long-standing frustrations with its services.

After she began looking for a new therapist last year following a move to Colorado, officials at her local VA clinic in Golden said at her intake appointment that its in-house providers were swamped and could not see new patients for at least six months.

She asked if she could get help through community care, but staffers told her that the system was so overwhelmed that it would be a “nightmare,” she recalled. Veterans living in eastern Colorado waited 57 days on average to get a community care appointment scheduled in December, VA figures show.

Bourlakov said she tried to get help through a separate VA clinic, but when her phone calls went unanswered, she finally gave up.

“I don’t have time for all of that,” she explained. “It’s just like shouting into the wind.”

Following inquiries from ProPublica, VA officials reached out to Bourlakov and other veterans interviewed for this story to offer additional assistance with their mental health care. The calls left several frustrated, saying it shouldn’t take questions from the media for them to get help from the VA.

Though skeptical, Bourlakov decided to move forward. She was contacted by three separate VA representatives in February asking about her health and if she needed help scheduling a therapy appointment.

The earliest telehealth appointment they offered was not until June, she said. The next available in-person slot was not until July. Bourlakov opted for June.

GOP funneled thousands of desperate voters to get help from agency — then gutted it

A New York business frozen out of its checking account. A Georgia chemotherapy patient denied a credit card refund after a product dispute. A New Jersey service member defrauded out of their savings.

These consumers — along with hundreds of others — reached out to their congressional representatives for help in the past 12 months.

“I have been unable to pay my rent, utilities, personal bills, student loans, or my credit card. I have been unable to buy groceries or put gas in my car,” wrote the New Yorker, who contacted Rep. Nicole Malliotakis’ office.

Records show their representatives — all Republicans — referred them to the Consumer Financial Protection Bureau, the watchdog agency formed in the wake of the Great Recession to shield Americans from unfair or abusive business practices. All three consumers got relief, according to agency data.

Then the lawmakers — along with nearly every other Republican in Congress — voted to slash the agency’s funding by nearly half as part of President Donald Trump’s signature legislative package, the One Big Beautiful Bill Act, a step toward the administration’s goal of gutting the agency.

Republicans have long been critical of the CFPB, accusing it of imposing unreasonable burdens on businesses. Already, the CFPB under Trump has dropped a number of cases and frozen investigations into dozens of companies.

Yet the agency has historically benefited consumers across the political spectrum, securing around $20 billion in relief through its enforcement actions.

Data obtained by ProPublica through a public records request shows that many of the same Republican members of Congress who have targeted the CFPB for cuts have collectively routed thousands of constituent complaints to the agency.

Rep. Darrell Issa of California and Rep. Rob Wittman of Virginia, for example, voted to reduce the CFPB’s budget. Yet each of their offices has referred more than 100 constituents to the CFPB for help, among the most of any House members. The office of Sen. John Cornyn of Texas, who also voted for the CFPB cuts, has routed more than 800 constituent complaints to the agency, the most of any current lawmaker from either party, ProPublica found.

A spokesperson for Issa said in an email that most of his office’s referrals to the agency “occurred several years ago” and reflected “a conventional way” to handle constituents’ consumer issues.

Wittman and Cornyn didn’t respond to questions from ProPublica about the disconnect between their offices’ use of the CFPB’s services and their votes to cut it. Neither did New Jersey Rep. Chris Smith, whose office fielded the defrauded service member’s complaint, or Malliotakis, who was approached by the New York business owner, or Rep. Rick Allen, whose office directed the Georgia chemotherapy patient to the agency.

Overall, members of Congress have steered nearly 24,000 complaints to the CFPB since it opened its doors in 2011. Roughly 10,000 of those were referred by the offices of current and former Republican lawmakers, ProPublica found.

“This is how members of Congress from both parties get help for the people who live in their districts,” said Erie Meyer, the CFPB’s former chief technologist, who left the agency in February. The agency has a particular mandate to help service members and seniors, she noted. “This is how, if a service member is getting screwed on an auto loan, this is the only place they can go.”

Sen. Richard Blumenthal, D-Conn., has referred more than 200 constituents to CFPB since its creation. In a statement to ProPublica, he accused Republicans in Congress of “pursuing senseless cuts that will undermine their own ability to protect their constituents, who will be left in the lurch when they fall victim to scams or deceptive and unfair business practices.”

“Republicans have made clear that they stand on the side of big businesses — not consumers,” he added. “Their irresponsible pursuit of dismantling the CFPB will have far-reaching and long-lasting consequences.”

An Irreplaceable System

In recent years, the CFPB’s public database shows the number of complaints has exploded, from around 280,000 in 2019 to more than 2.7 million last year.

Complaints have grown across many categories, including credit cards and debt collection. Last year, most of the complaints filed, over 2.3 million, were about mistakes or other problems involving credit reporting agencies, and more than half of them resulted in relief, CFPB data shows.

“These credit score formulas govern so many factors of your life. It’s not just your ability to get a loan, it’s your ability to secure housing or qualify for a job,” said Adam Rust, director of financial services at the Consumer Federation of America. “It’s important that you can resolve something, but it’s difficult to do it on your own.”

Once a complaint is submitted, it is routed to the company, which has 15 days to respond. Companies can request an additional 45 days to reach a final resolution.

Many consumers end up getting nonmonetary relief, such as fixes to erroneous credit reports or an end to harassment by debt collectors, but some get financial help as well. More than $300 million has been returned to Americans through the complaint system, including $90 million just last year.

Normally, staff at the CFPB monitor the complaints to identify systemic issues and escalate complaints involving consumers who are at immediate risk of foreclosure, although that didn’t happen for a few weeks this year when the agency’s acting director halted its work.

The CFPB also shares complaint information with other federal agencies, states and localities to help them protect consumers. No other government or private entity has the capacity to effectively handle the volume of complaints that the CFPB does, experts and current and former employees say.

States often have limited resources for consumer protection efforts. Many states — including some conservative ones that supported a lawsuit challenging the constitutionality of the CFPB’s structure — steer consumers to the agency on their websites, providing links to it.

In legal filings opposing the Trump administration’s steps to effectively shut down the CFPB, 23 Democratic attorneys general noted that their states collectively have referred thousands of complaints to the agency and that its services can’t be replaced by state-level operations.

“In the CFPB’s absence, consumers will be left without critical resources,” they wrote.

The complaint system has also lessened the burden on congressional offices, which can route constituent problems to an agency dedicated to, and expert in, addressing consumer issues. Yet that hasn’t stopped Republicans from pursuing dramatic cuts to the agency.

The CFPB receives its funding from the Federal Reserve instead of annual appropriations bills. The structure is meant to safeguard the agency’s independence, though critics say this makes the agency less accountable, giving elected officials less power over its operations.

Initially, Republicans pressed for extreme cuts to the CFPB as part of Trump’s legislative package. House members approved a 70% cut. The Senate Banking Committee attempted to go even further, zeroing out the agency’s funding entirely.

Ultimately, the final version of the bill signed into law by Trump on July 4 cut the CFPB’s budget by around 46%, reducing the agency’s funding cap — the maximum amount it can request from the Federal Reserve — from $823 million to $446 million for this fiscal year. The agency requested $729 million last fiscal year.

The offices of lawmakers who voted for the bill have referred about 3,400 complaints to the agency, running the gamut of consumer problems — from crushing debt to mortgage issues to financial scams, ProPublica’s data analysis shows. (In some of these cases, consumers also took complaints to the CFPB themselves in addition to reaching out to their representatives. Consumers’ names aren’t disclosed in the data.)

Their constituents are sometimes desperate: “I’m about to be homeless because of this,” wrote a Florida resident whose bank account was frozen.

Others have expressed frustration at getting the runaround from a company. “I’ve spent countless hours on hold trying to speak with a representative, only to be met with silence or outdated instructions to send letters,” wrote one Virginian in a complaint about their bank.

In a statement after the CFPB funding cut passed, the chair of the Senate Banking Committee, Tim Scott, R-S.C., applauded the measure for saving taxpayer money but insisted it would not affect the agency’s mandatory functions, which include handling complaints.

Consumer experts as well as current and former CFPB employees, however, said the cuts will likely hinder the agency’s effectiveness.

“I think the whole process is at risk,” said Ruth Susswein, director of consumer protection at the nonprofit advocacy group Consumer Action. “If you starve the system, it cannot provide the benefits that it now offers.”

Signs of Strain

The Trump administration’s initial efforts to unilaterally hobble the CFPB give a hint of what may lie ahead for the complaint system.

In February, acting Director Russell Vought issued a stop-work order to all CFPB employees and canceled a slew of contracts, including for antivirus software that scanned files attached to consumer complaints.

The actions largely froze the complaint system for about a week. More than 70,000 complaints were submitted, but most were not sent to companies for their response during that period, data shows.

Although some issues were later fixed, the work stoppage spawned a backlog of more than 16,000 complaints that required manual review, according to court records from a lawsuit filed by the union that represents CFPB employees. About 75 complaints from consumers at risk of imminent foreclosure, which would normally be escalated to CFPB staff, weren’t acted upon.

In late March, U.S. District Judge Amy Berman Jackson ordered the CFPB to end the work stoppage, reverse contract terminations and reinstate probationary employees who were fired. However, an appeals court allowed layoffs to proceed, triggering a frenzied effort by the administration to cut about 90% of the CFPB’s staff.

The layoffs included the vast majority of the roughly 130-member team that manages the complaint system as well as nearly every staffer in legally mandated offices focused on service members and seniors.

The CFPB has fielded over 440,000 complaints from current and former service members and their families since 2011, according to CFPB data, more than 100,000 of which have resulted in relief.

The CFPB did not respond to multiple requests for comment. In a court declaration, Mark Paoletta, the CFPB’s chief legal officer, said that the agency’s leadership had “been assessing how the agency can fulfill its statutory duties as a smaller, more efficient operation. In making this assessment, leadership discovered vast waste in the agency’s size.”

Paoletta also said the agency would have a “much more limited vision for enforcement and supervision activities, focused on protecting service members and veterans, and addressing actual tangible consumer harm and intentional discrimination.”

In April, Jackson issued an order blocking the firings made at the CFPB after the appeals court decision. The administration has appealed Jackson’s ruling.

Lawsuits won’t protect the CFPB or its complaint apparatus from the cuts included in the recently passed spending bill, current and former agency employees pointed out.

These changes are likely to hit home with consumers no matter which party they favor, said Lauren Saunders, associate director of the National Consumer Law Center, which is a plaintiff in the union’s lawsuit.

“Republicans don’t want to be abused by big corporations that ignore them any more than Democrats do,” she said.

A Wisconsin tribe built a lending empire by charging 600% annual rates to borrowers

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

Reporting Highlights

  • 600% Online Loans: A Wisconsin tribe built a lending empire on high-interest lending, relying on its sovereign rights to avoid state interest rate caps.
  • Bankruptcies and Complaints: A ProPublica analysis found that the tribe’s companies are mentioned frequently in personal bankruptcies and consumer complaints.
  • Groundbreaking Settlement: A proposed class-action settlement involving the tribe’s officials promises to deliver extraordinary relief to borrowers, erasing over $1 billion in debt.

These highlights were written by the reporters and editors who worked on this story.

In bankruptcy filings and consumer complaints, thousands of people across the country make pleas for relief from high-interest loans with punishing annual rates that often exceed 600%.

Although they borrowed small sums online from a slew of businesses with catchy names — such as Loan at Last or Sky Trail Cash — their loans stemmed from the same massive operation owned by a small Native American tribe in a remote part of Wisconsin.

Over the past decade, the Lac du Flambeau Band of Lake Superior Chippewa Indians has grown to become a prominent player in the tribal lending industry, generating far-reaching impact and leaving a legacy of economic despair. A ProPublica analysis found companies owned by the LDF tribe showed up as a creditor in roughly 1 out of every 100 bankruptcy cases sampled nationwide.

That’s the highest frequency associated with any of the tribes doing business in this sector of the payday loan industry. And it translates to an estimated 4,800 bankruptcy cases, on average, per year.

ProPublica also found that LDF’s various companies have racked up more than 2,200 consumer complaints that were routed to the Federal Trade Commission since 2019 — more than any other tribe in recent years.

“THIS IS THE TEXTBOOK DEFINITION ON LOANSHARKING,” one Californian with an LDF loan complained in all caps in June 2023 to federal regulators. The person, whose name is redacted, argued that “no one should be expected to pay over $11,000 for a $1,200 loan,” calling the 790% rate “beyond predatory.”

In a separate complaint, a Massachusetts customer wrote, “I thought this kind of predatory lending was against the law.”

Such confusion is understandable. Loans like these are illegal under most state statutes. But tribal-related businesses, including LDF, claim that their sovereign rights exempt them from state usury laws and licensing requirements aimed at protecting consumers. And so these businesses operate widely, facing little pushback from regulators and relying on the small print in their loan agreements.

As LDF climbed in the industry, it kept a low profile, garnering little publicity. For years it operated from a call center above a smoke shop in the community’s small downtown, before moving to a sprawling vocational training building, built in part with federal money, off a less visible, two-lane road.

But staying under the radar just got harder. Court filings show that LDF tribal leaders and some of their nontribal business partners have come to an agreement with consumers in a 2020 federal class-action lawsuit filed in Virginia. Nearly 1 million borrowers could finally get relief.

The deal calls for the cancellation of $1.4 billion in outstanding loans. Tribal officials and their associates would also pay $37.4 million to consumers and the lawyers who brought the suit. Although they settled, LDF leaders have denied wrongdoing in the case, and its president told ProPublica it adheres to high industry standards in its lending operations.

A final resolution of the case will take months. If approved, the total settlement would be the largest ever secured against participants in the tribal lending industry, lawyers told the court.

“This is a big one,” said Irv Ackelsberg, a Philadelphia attorney who has faced off in court against other tribal lenders and followed this suit closely. “Is it going to stop tribal lending? Probably not because it’s just a fraction of what’s out there.”

The LDF tribe is central to the suit but is not named. Nor is LDF Holdings, the corporate umbrella over the various lending subsidiaries.

Knowing that both those entities likely would have been entitled to sovereign immunity, lawyers for the borrowers chose a different approach. Instead, they brought the case against members of the tribe’s governing council; high-level employees of LDF’s lending operations; and a nontribal business partner, Skytrail Servicing Group, and its owner, William Cheney Pruett.

Pruett also denied wrongdoing in the case. He did not respond to requests for comment from ProPublica.

The proposed settlement notes that the tribal leaders and their partners understood that continuing to defend the case “would require them to expend significant time and money.” LDF, under the settlement, can continue its loan operations.

In emails to ProPublica, LDF President John Johnson Sr. defended the tribe’s lending business as legal and beneficial to both borrowers and the tribal members. He said the loans help people “without access to traditional financial services,” such as those with bad credit histories and people facing financial crises. Many borrowers, he said, have had positive experiences.

He also emphasized the economic benefits to the tribe, including jobs and revenue for vital services. “Please make no mistake: the programs and infrastructure developed through LDF Holdings’ revenue contributions have saved lives in our community and are helping preserve our culture and way of life,” he wrote in an email.

Johnson, who is a named defendant in the suit, and other tribal leaders declined requests to be interviewed.

Partnerships Fuel Lending

Historically, some financial services firms formed alliances with tribes, gaining an advantage from the tribes’ sovereign immunity. For years, consumer lawyers and even federal prosecutors have raised questions about whether some tribal lending operations were just fronts for outsiders that received most of the profits and conducted all the key operations — from running call centers to underwriting and collecting.

The LDF tribe is one of only a few dozen of the nation’s 574 federally recognized tribes that have turned to the lending business as an economic lifeline. Typically those tribes are in isolated areas far from large population centers needed to support major industries or hugely profitable casinos. Online lending, or e-commerce, opened opportunities.

“If you look at the tribes who do it, they tend to be rural and they tend to be poor,” said Lance Morgan, CEO of a tribal economic development corporation owned by the Winnebago Tribe of Nebraska. “Because they don’t really have any other options to pursue from an economic development standpoint. They just don’t. That’s why this appeals to some tribes.”

He said his tribe considered getting into the lending industry but decided against it.

Tribes in the U.S. still suffer from the legacy of racism and betrayal that saw the U.S. government steal land from Native Americans and destroy cultures. Now, with limited economic resources and taxing options, tribal governments draw upon federal grants and subsidies to help fund essential community services — support promised in long-ago treaties, laws and policies in exchange for land. But these programs have proven to be “chronically underfunded and sometimes inefficiently structured,” according to a 2018 report from the U.S. Commission on Civil Rights.

On the LDF reservation, which is home to about 3,600 people, the median household income is under $52,000, and 20% of the population lives below the federal poverty line, according to the U.S. Census Bureau. On lands that are chock-full of lakes, streams and wetlands, the LDF people operate a fish hatchery, hunt deer and cultivate wild rice. The tribe also has a casino, hotel and convention center.

LDF entered the loan business in 2012 and has set up at least two dozen lending companies and websites on its way to massive expansion, a ProPublica examination found. LDF owns the companies and works with outside firms to operate its businesses, which offer short-term installment loans.

Unlike traditional payday loans, these are not due by the next pay period but have longer terms. Borrowers show proof of income and typically authorize the company to make automatic withdrawals from their bank accounts.

Details of the tribe’s business operations are not public. A July 2014 tribal newsletter reported that LDF had three lending companies employing four tribal members. By 2022, an LDF attorney told the Virginia judge that LDF Holdings, the lending parent company, employed about 50 people on the reservation. Johnson told ProPublica it currently employs 170 people “who live on or near the reservation,” of which 70% are tribally enrolled.

Each year, on reservation land, LDF now hosts the Tribal Lending Summit, a gathering of staff, vendors and prospective partners. Attendee lists posted online show dozens of representatives of software companies, call centers, marketing firms, customer acquisition businesses and debt collection agencies.

After this year’s event, in June, the LDF business hosts posted a congratulation message on social media: ”Here’s to another year of growth, learning, and collaboration! We look forward to continuing this journey together and seeing you all at next year’s summit."

Business Practices Under Fire

Like many operators in this corner of the lending industry, LDF has been forced to defend its business practices in court. It has been subject to at least 40 civil suits filed by consumers since 2019, ProPublica found.

The suits typically allege violations of state usury laws and federal racketeering or fair credit reporting statutes. Johnson, in his statements to ProPublica, said LDF follows tribal and federal regulations, and he cited LDF’s sovereign status as the primary reason state laws on lending don’t apply to its business practices.

“Expecting a Tribe to opine on and/or submit to State regulatory oversight is akin to expecting Canada to submit to or speak on the laws of France,” he wrote.

Most suits against LDF’s lending companies settle quickly with the terms kept confidential. Consumers can be at a disadvantage because of the arbitration agreements in the fine print of their loan contracts, which attempt to restrict their ability to sue.

Karen Brostek, a registered nurse in Florida, borrowed $550 in 2017 from LDF’s Loan at Last at an annual percentage rate of 682%. The contract required her to pay back $2,783 over nine months.

It wasn’t her first foray into short-term borrowing. She said her salary did not cover her expenses and she had “to borrow from Peter to pay Paul.”

Loan at Last tried numerous times to collect the debt, even threatening in one phone call to have her jailed, she said. Finally, in August 2019, she satisfied the obligation.

Brostek sued LDF Holdings in small claims court in Pasco County in 2021. The suit cited Florida laws that make it a third-degree felony to issue loans with APRs over 45%.

The parties settled within weeks. Brostek recalls receiving about $750. LDF’s Johnson did not comment on Brostek’s case in his response to ProPublica.

She said she does not begrudge the tribe making money but said, “We need to find another way to help them so they don’t feel they’re backed into a corner and this is their only alternative.”

A Groundbreaking Settlement

The Virginia class-action suit claimed that LDF’s governing council delegated the daily operations of the lending businesses “to non-tribal members.” Mirroring allegations in other civil actions, the suit claims that LDF’s partnerships were exploiting sovereign immunity to make loans that otherwise would be illegal.

According to the plaintiffs, LDF Holdings entered into agreements that allow nontribal outsiders to handle and control most aspects of the lending businesses. That includes “marketing, underwriting, risk assessment, compliance, accounting, lead generation, collections, and website management for the businesses,” the suit said. For years, the president of LDF Holdings was a woman who lived in Tampa, Florida. She is a named defendant in the suit, which says she is not a member of the tribe.

Johnson told ProPublica that early on the tribe lacked expertise in the industry and that its partnerships were simply an example of outsourcing, “a standard practice in many American business sectors.”

His statement added, “Recruiting outside talent and capital to Indian country is a mission-critical skill in Tribal economic development.”

The amount of revenue that comes to the tribe is undisclosed, but the class-action suit says the contract with one of its partners, Skytrail Servicing, resulted in only “a nominal flat fee” for LDF.

The 2014 servicing agreement between Skytrail Servicing and LDF is sealed in the court record, and details about the arrangement are largely redacted. In one filing, Skytrail Servicing denies an allegation from the plaintiffs that the tribe received only $3.50 per originated loan.

In a separate filing in the suit, Johnson, the tribal president, said LDF’s lending profits are distributed to the tribe’s general fund, which helps pay for the tribal government, including essential services such as police, education and health care.

The legal strategy crafted by the Virginia consumer protection firm Kelly Guzzo PLC relied heavily on a 2021 federal appeals court decision that concluded that tribal lending was off-reservation conduct to which state law applied. The court found that while a tribe itself cannot be sued for its commercial activities, its members and officers can be.

The class-action suit alleges that tribal officials and their associates conspired to violate state lending laws, collecting millions of dollars in unlawful debts. “In sum, we allege that they are the upper level management of a purely unlawful business that makes illegal loans in Virginia, Georgia, and elsewhere throughout the country,” lawyer Andrew Guzzo said in a September 2022 hearing, referring to LDF officials.

“What I’m trying to say, in other words, is this isn’t a case that involves a lawful business, such as a real estate brokerage firm, that happens to have a secret side scheme involving a few rogue employees,” he said. “The people that are overseeing this are overseeing a business that makes unlawful loans and nothing else.”

The most consequential aspect of the settlement plan is the debt relief it would offer an estimated 980,000 people who were LDF customers over seven years — from July 24, 2016, through Oct. 1, 2023. Those who had obtained loans during that period and still owed money would not be subject to any further collection efforts, canceling an estimated $1.4 billion in outstanding debt.

Eligibility for cash awards is dependent on the state where borrowers live and how much they paid in interest. Nevada and Utah have no interest rate restrictions, so borrowers there aren’t entitled to any money back.

The tribal officials who are listed as defendants have agreed to pay $2 million of the $37.4 million cash settlement. The remaining amount would come from nontribal partners involved in five of the tribe’s lending subsidiaries.

That includes $6.5 million from Skytrail Servicing Group and Pruett, a Texas businessman who has been involved in the payday loan industry for more than two decades.

The largest portion of the settlement — $20 million — would come from unnamed “non-tribal individuals and entities” involved with LDF’s Loan at Last, the company that gave Brostek her loan.

The consumer attorneys are not done. They noted in a memorandum in the case that other LDF affiliates who did not settle in this instance “will be sued in a new case.”

How We Estimated the Size and Impact of the Tribal Lending Industry

Because tribal lenders are not licensed by states, there is very little public information about the size of the industry.

Bankruptcies give a rare window into the prevalence of the industry because when people file for bankruptcy, they must list all the creditors they owe money to. Bankruptcies are filed in federal court and are tracked in PACER, the federal courts’ electronic records system. But PACER charges a fee for every document viewed and cannot be comprehensively searched by creditor list, making it impractical to identify every bankruptcy case with a tribal lender.

Instead, we selected a random sample of 10,000 bankruptcy cases using the Federal Judicial Center’s bankruptcy database, which lists every case filed nationwide (but does not include creditor information). We looked at Chapter 7 and Chapter 13 cases — the types used by individuals — filed from October 2020 to September 2023. We then scraped the creditor list for each of these cases from PACER and identified which cases involved tribal lenders.

We ultimately identified 119 cases with LDF companies as creditors — 1.19% of our total sample, the most of any tribe. Extrapolating these figures across all 1.2 million Chapter 7 and Chapter 13 bankruptcy cases during these three years gave an estimated 15,000 cases involving LDF loans during this period (with a 95% confidence interval of +/- 2,600). That comes out to an estimated 4,800 cases per year, on average. Many factors can contribute to bankruptcy, and LDF loans were not the only debts these bankruptcy filers faced. Still, these figures showed that LDF stood out among other tribal lenders and had a substantial presence across bankruptcies nationwide.

We also looked at consumer complaint data that we acquired through public records requests to the Federal Trade Commission, which collects complaints made to various sources including the Better Business Bureau, the Consumer Financial Protection Bureau and the FTC itself. We focused our requests on several categories we found to be related to lending products, such as payday loans and finance company lending. Our tallies are likely an undercount: Complaints against tribal lenders may have fallen under other categories, such as debt collection, though our explorations found this to be less common. We found more than 2,200 complaints about LDF companies since 2019, the most of any tribal lending operation.

We compiled hundreds of tribal lending company and website names that we used to search through the creditor and complaint data. However, due to the ever-shifting industry landscape in which websites often go offline while new ones pop up, it is possible that we did not identify every complaint and bankruptcy involving tribal lenders.Mariam Elba contributed research.