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The US Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against MoneyLion Technologies and 38 of its lending subsidiaries.
CFPB Filed Lawsuit Against MoneyLion
The regulator alleges that moneylenders imposed “illegal and excessive” fees on service members and their dependents.
The Military Loans Act (MLA) protects active-duty military personnel and their dependents, but the CFPB alleges fintech companies have violated it.
According to the CFPB, MoneyLion charges service members and their dependents “loans in excess of the legally permitted 36% cap,” using a combination of prescribed interest rates and monthly membership fees.
The company also claims that it required customers to join a membership program to access certain “low annual interest” loans, and then did not allow memberships to be canceled until the loans were paid.
CFPB director Rohit Chopra said it was “against the law” to set monthly membership fees for businesses to obtain loans and create barriers for them to cancel their memberships. I’m here.
However, MoneyLion called the allegations “baseless” and intends to defend against “false allegations” in order to “set the record straight.”
MoneyLion has worked faithfully with the CFPB on membership offerings for over three years, it said. Our innovative membership program helps service members and other customers build savings, investments, credit and improve their overall financial lives.
Despite our cooperation, the Bureau chose the sensational route of prioritizing headlines instead of addressing their questions and engaging in constructive dialogue to achieve better consumer results. did.”
Founded in 2013 and based in New York City, MoneyLion offers customers personalized financial content, products such as online installment loans, and advice.
