Full Breakdown
CFPB Settles $1.75 Million Lawsuit Against MoneyLion Over Military Lending Violations
11/26/2025, 3:56:17 AM
Settlement Overview
The U.S. Consumer Financial Protection Bureau (CFPB) has reached a $1.75 million settlement with the online lender MoneyLion, resolving allegations that the company charged military service members and their families interest rates exceeding the 36% cap established by the Military Lending Act (MLA). The settlement, filed in Manhattan federal court, is part of the CFPB's efforts to address lending practices that disproportionately affect military personnel.
Allegations Against MoneyLion
The CFPB's lawsuit, initiated in September 2022, claimed that MoneyLion's loan structure combined interest rates and mandatory membership fees that surpassed the federal limit. The bureau highlighted that MoneyLion required customers to enroll in a membership program, which imposed monthly fees ranging from $19.99 to $29, as a condition for accessing its low annual percentage rate installment loans. Furthermore, the CFPB alleged that MoneyLion prevented borrowers from canceling their memberships until their loans were fully paid, exacerbating their financial burdens.
Terms of the Settlement
Under the terms of the settlement, MoneyLion is prohibited from charging interest rates above the MLA cap and must allow borrowers to cancel their memberships regardless of any outstanding loan balances or unpaid fees. The settlement also bars the company from engaging in collections activities related to unpaid membership fees and mandates that it submit a compliance report detailing the compensation distributed to affected borrowers. This settlement applies to individuals who took out loans between December 1, 2017, and October 11, 2024.
Broader Implications
This settlement is significant as it reduces the number of active litigation cases the CFPB is pursuing, which now stands at 12. The agency has dismissed 22 enforcement actions this year, reflecting a broader trend of scaling back operations due to budget constraints. The CFPB's commitment to protecting military families remains evident, especially as it reinforces its focus on redress for service members, veterans, and their families.
Criticism and Opposition
Despite the settlement, MoneyLion has publicly disputed the CFPB's allegations, asserting that the bureau has prioritized sensationalism over constructive dialogue. The company emphasized its commitment to serving military and veteran customers and stated that the membership offering constitutes a small part of its overall business. Additionally, MoneyLion faces other legal challenges, including a lawsuit from New York's attorney general and a separate suit from the city of Baltimore, both alleging predatory lending practices.
What's Next
As the CFPB continues to navigate funding challenges and potential shifts in enforcement strategy, this settlement highlights the ongoing scrutiny of lending practices affecting military families. The resolution of this case may influence future regulatory actions and the landscape of consumer protection in the United States.
Verbatim Quotes
“glad to put this matter behind us and focus on continuing to help Americans improve their financial lives.” — MoneyLion Representative
“MoneyLion has the highest regard for its military and veteran customers and [is] committed to working with this important community to help them achieve better financial health,” — MoneyLion Representative
