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October 6, 2020 

Casey Lozar

Director, Center for Indian Country Development 

Federal Reserve Bank of Minneapolis 

100 Neill Avenue 

Helena, MT 59601 

Re: Main Street Lending Program 

Dear Mr. Lozar:

This letter responds to your request on behalf of the Center for Indian Country 

Development of the Federal Reserve Bank of Minneapolis for the Office of General Counsel, 

National Indian Gaming Commission, to review requirements of the Federal Reserve Board’s 

Main Street Lending Program (MSLP). The MSLP supports small and medium-sized businesses, 

including tribal gaming operations, by facilitating lending during the current period of financial 

strain caused by the COVID-19 pandemic. Through the MSLP, the Federal Reserve purchases a 

95% interest in eligible loans while the lender retains a 5% interest and continues to service the 

loan. The Federal Reserve obtains the same rights as the lender upon purchase and shares in any 

risk in the loan on a pari passu basis. The MSLP includes three facilities that support lending to 

for profit businesses: the Main Street New Loan Facility (MSNLF), the Main Street Priority 

Loan Facility (MSPLF), and the Main Street Expanded Loan Facility (MSELF). To participate in 

the MSLP, lenders and borrowers must provide certain certifications and covenants. 

Pursuant to the Indian Gaming Regulatory Act, the NIGC Chairman must review and 

approve all contracts for the operation and management of a gaming operation and all collateral 

agreements to management contracts.

1 IGRA also requires that tribes maintain the sole 

proprietary interest and responsibility for the conduct of any gaming activity.2

 Your request asks 

for my opinion whether the MSLP requirements themselves raise any concerns under IGRA. 

Specifically, you have asked for my opinion whether adjustment to reflect the MSLP 

requirements could cause a loan facility to be a management contract requiring the NIGC Chair’s 

approval or cause a loan facility to violate IGRA’s requirement that a tribe have the sole 

proprietary interest in its gaming activity.

1 25 U.S.C. §§ 2710(d)(9), 2711. 

2 25 U.S.C. § 2710(b)(2).
Letter to Casey Lozar

Re: Main Street Lending Program

October 6, 2020

Page 2 of 5

In my review, I considered the following documents describing MSLP certifications and 

covenants required of eligible lenders and borrowers (collectively, “the MSLP requirements”):

1. MSNLF Term Sheet (July 28, 2020);

2. MSPLF Term Sheet (July 28, 2020);

3. MSELF Term Sheet (July 28, 2020);

4. MSNLF Borrower Certifications and Covenants (June 11, 2020);

5. MSPLF Borrower Certifications and Covenants (June 11, 2020);

6. MSELF Borrower Certifications and Covenants (June 11, 2020);

7. MSNLF Lender Transaction Specific Certifications and Covenants (June 11, 2020);

8. MSELF Lender Transaction Specific Certifications and Covenants (June 11, 2020); and

9. MSPLF Lender Transaction Specific Certifications and Covenants (June 11, 2020).

MSLP guidance states that lenders should use loan documentation substantially similar to 

the loan documentation that the lender uses in its ordinary course of business lending to similarly 

situated borrowers, adjusted only as appropriate to reflect MSLP requirements.3 Office of 

General Counsel opinion letters concerning the terms of loan agreements that lenders have used 

in the ordinary course of business lending to tribal gaming operations are available on the NIGC 

website. Applying the same analysis to the MSLP requirements, it is my opinion that adjusting 

loan documentation to reflect MSLP requirements would not affect the assessment of whether 

the underlying loan documentation raised any concerns under IGRA. It is my opinion that the

MSLP requirements themselves would not cause a loan facility to be a management contract 

requiring the NIGC Chairman’s approval. It is also my opinion that the MSLP requirements 

themselves would not cause a loan facility to violate IGRA’s sole proprietary interest 

requirement.

Management Contracts:

The NIGC has defined a “management contract” to mean “any contract, subcontract, or 

collateral agreement between an Indian tribe and a contractor or between a contractor and a 

subcontractor if such contract or agreement provides for the management of all or part of a 

gaming operation.”4 A “collateral agreement” is defined as “any contract, whether or not in 

writing, that is related, either directly or indirectly, to a management contract, or to any rights, 

duties or obligations created between a tribe (or any of its members, entities, or organizations) 

and a management contractor or subcontractor (or any person or entity related to a management 

contractor or subcontractor).”5

 3 Main Street Lending Program FAQ I.4. available at

https://www.federalreserve.gov/monetarypolicy/mainstreetlending.htm. 4 25 C.F.R. § 502.15. 5 25 C.F.R. § 502.5.
Letter to Casey Lozar

Re: Main Street Lending Program

October 6, 2020

Page 3 of 5

While NIGC regulations do not define “management,” the Agency has clarified that the 

term encompasses activities such as planning, organizing, directing, coordinating, and 

controlling.6A “primary management official” includes “any person who has the authority ... 

[t]o set up working policy for the gaming operation.”7 Further, management employees are 

“those who formulate and effectuate management policies by expressing and making operative 

the decision of their employer.”8 Whether a particular employee is managerial is not controlled 

by an employee’s actual job responsibilities, authority, and relationship to management.9

Essentially an employee may qualify as management if the employee possesses the actual 

authority to take discretionary actions – a de jure manager – or, in certain circumstances, where 

the employee acts as a de facto manager by directing the gaming operation through others 

possessing actual authority to manage the gaming operation.10

If a contract requires or permits the performance of any management activity with respect 

to all or part of the gaming operation, the contract is a management contract within the meaning 

of IGRA and requires the Chairman’s approval.11 Management contracts that have not been 

approved by the Chairman are void.12

Management Analysis:

Here, the MSLP requirements do not require the lender to include terms that would 

provide a third party with a management role over a tribe’s gaming activities. Accordingly, it is 

my opinion that the MSLP requirements would not cause a loan facility to be a management 

contract requiring the NIGC Chairman’s review and approval.

Sole Proprietary Interest:

IGRA requires a tribe to possess “the sole proprietary interest and responsibility for the 

conduct of any gaming activity.”13 “Proprietary interest” is not defined in IGRA or the NIGC’s 

implementing regulations. Black’s Law Dictionary defines a “proprietary interest” as an “interest 

 6 See NIGC Bulletin No. 94-5, “Approved Management Contracts v. Consulting Agreements (Unapproved 

Management Contracts are Void).”

7 25 C.F.R. § 502.19(b)(2).

8 N.L.R.B. v. Bell Aerospace Co., 416 U.S. 267, 288 (1974). 9 See Waldau v. M.S.P.B., 19 F.3d 1395, 1399 (Fed. Cir. 1994). 10 Id. at 1399 (citing N.L.R.B. v. Yeshiva, 444 U.S. 672, 683 (1980)). It is uncommon to see de facto management in 

the terms of an agreement, as it is typically an activity that arises in the day-to-day implementation of a consulting 

agreement. If, for example, a tribe is required to make the ultimate decision on whether the accept the advice of a 

consultant, but has no one on staff with the expertise or experience to make such a determination, the consultant may 

become the de facto manager in the sense that he or she is simply executing management decisions through a tribal 

management official.

11 25 U.S.C. § 2711. 12 25 C.F.R. § 533.7; see also Wells Fargo Bank, Nat’l Ass’n v. Lake of the Torches Econ. Dev. Corp., 658 F.3d 684, 

688 (7th Cir. 2011).

13 25 U.S.C. § 2710(b)(2)(A); see also 25 C.F.R. § 522.4(b)(1).
Letter to Casey Lozar

Re: Main Street Lending Program

October 6, 2020

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held by a property owner together with all appurtenant rights ....”14 An “owner” is “one who has 

the right to possess, use, and convey something.”15 “Appurtenant” means “belonging to; 

accessory or incident to ....”16 Case law similarly defines “proprietary interest” as “one who has 

an interest in, control of, or present use of certain property.” 17

To determine whether an agreement violates the sole proprietary interest requirement, the 

NIGC analyzes three criteria: (1) the term of the relationship; (2) the amount of revenue paid to 

the third party; and (3) a third party’s right to exercise control over all or any part of the gaming 

activity.18 Accordingly, if a party other than the tribe receives a high level of compensation, for a 

long period of time, and possess some aspect of control, an improper proprietary interest may 

exist.

Sole Proprietary Interest Analysis:

Term of the Relationship:

Loans eligible for the MSLP must have a 5-year maturity. In general, agreements with 5-

year terms do not raise sole proprietary interest requirement concerns with respect to the term of 

the contractual relationship.

Amount of Revenue Paid to a Third Party:

Loans eligible for the MSLP must have an adjustable rate of LIBOR (1 or 3 months) plus 

300 basis points. In addition, the MSLP requirements allow for a transaction fee of 100 basis 

points, a loan origination fee of 100 basis points, and a loan upsizing fee of 75 basis points. In 

general, agreements that provide for an interest rate derived from a benchmark reference rate 

plus 300 basis points, transaction fees of 100 basis points, loan origination or upsizing fees of 

100 basis points and 75 basis points respectively, do not violate IGRA’s sole proprietary interest 

requirement with respect to the amount of revenue paid to a third party. 

Third Party’s Right to Exercise Control over Gaming Activity:

The MSLP requirements do not include requirements that the lender exercise control over 

a tribe’s gaming activity. Accordingly, the MSLP does not provide a lender or the Federal 

Reserve with a right to exercise control over gaming activity that could implicate sole proprietary 

interest concerns.

 14 BLACK’S LAW DICTIONARY (10th ed. 2014). 15 Id. 16 Id. 17 See Evans v. United States, 349 F.2d 653, 659 (5th Cir. 1965). 18 See NIGC NOV-11-02, (July 12, 2011); see also City of Duluth v. Fond du Lac Band of Lake Superior Chippewa, 

830 F. Supp. 2d 712, 723 (D. Minn. 2011), aff’d in pertinent part, 702 F.3d 1147 (8th Cir. 2013) (discussing NIGC 

adjudication of proprietary interest provision).
Letter to Casey Lozar

Re: Main Street Lending Program

October 6, 2020

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Upon review of these three criteria – term, compensation, and control – it is my opinion 

that the MSLP requirements would not cause a loan facility to violate IGRA’s requirement that 

the Tribe maintain the sole proprietary interest in its gaming operation.

If you have any questions, please contact me at (202) 632-7003 or by email at 

michael_hoenig@nigc.gov.

Sincerely, 

Michael Hoenig

General Counsel