On September 29, 2022, the CFPB sued MoneyLion Technologies and 38 of its subsidiaries, for imposing illegal and excessive charges on servicemembers and their dependents. MoneyLion is a financial technology company that offers online installment loans and other products.
The CFPB alleges that MoneyLion violated the Military Lending Act by:
Overcharging and deceiving servicemembers and military dependents. The company charged more than the legally allowable 36% rate cap on loans to servicemembers and their dependents, through a combination of stated interest rates and monthly membership fees.
Refusing to allow customers to exit its membership programs and stop paying monthly fees. MoneyLion required customers to join a membership program to access certain “low-APR” loans, and then did not allow them to cancel their memberships until their loans were paid.
From CFPB Director Rohit Chopra’s statement:
“MoneyLion targeted military families by illegally extracting fees and making it difficult to cancel monthly subscriptions. Companies are breaking the law when they require monthly membership fees to obtain loans and then create barriers to canceling those memberships.”
The CFPB is seeking monetary relief for consumers, disgorgement of unjust gains, an end to MoneyLion’s unlawful practices, and a civil money penalty. The complaint is not a final finding or ruling that the defendants have violated the law.
Read the CFPB’s full press release here.
The complaint can be found here.