MoneyLion, the digital financial platform that went public in 2021, is defending itself against a stack of lawsuits from the Consumer Financial Protection Bureau, the New York Attorney General, the City of Baltimore, and private class action plaintiffs in Florida and California. The cases center on two products: the Credit Builder Plus membership loan program and the Instacash cash advance. Regulators and consumers allege that MoneyLion disguises loan interest as monthly membership fees, “turbo” delivery charges, and optional tips, pushing effective rates far above state usury caps and the 36% ceiling the Military Lending Act sets for servicemembers. MoneyLion has denied the allegations and, in November 2025, settled the CFPB case for $1.75 million without admitting wrongdoing. Other cases remain active.
The CFPB Case and Its $1.75 Million Settlement
The Consumer Financial Protection Bureau sued MoneyLion Technologies Inc., ML Plus LLC, and 37 lending subsidiaries on September 29, 2022, in the Southern District of New York, alleging violations of the Military Lending Act and the Consumer Financial Protection Act.1Consumer Financial Protection Bureau. MoneyLion Technologies Inc., ML Plus LLC, and Other Subsidiaries
The Bureau’s core claim was about the math. To access an installment loan, borrowers had to join a membership program costing $19.99 to $29 per month. The CFPB argued that this fee was part of the cost of credit, and once included in the Military Annual Percentage Rate calculation, loans to active-duty servicemembers and their dependents exceeded the MLA’s 36% cap. The Bureau also alleged that MoneyLion’s loan contracts contained arbitration clauses the MLA prohibits, and that required disclosures were not provided to covered borrowers between roughly fall 2017 and August 2019.2Consumer Financial Protection Bureau. CFPB v. MoneyLion Complaint
A second set of claims targeted the membership program itself. According to the complaint, MoneyLion told consumers they could cancel any time but blocked cancellation for anyone with an outstanding loan balance, kept charging fees during suspended memberships, and refused to cancel until past-due fees were paid.2Consumer Financial Protection Bureau. CFPB v. MoneyLion Complaint
On March 24, 2025, the court dismissed the arbitration and disclosure claims but let the rate cap claims proceed.3Hinshaw & Culbertson LLP. Lenders Should Approach the Recent CFPB/MoneyLion MLA Settlement With Caution4Consumer Financial Protection Bureau. Stipulated Final Judgment and Order
Going forward, MoneyLion cannot extend credit to covered borrowers at a MAPR above 36%. It may exclude membership fees from that calculation only if the fees are clearly disclosed and borrowers can cancel within two months regardless of loan status. The company also cannot condition cancellation on loan repayment, charge fees during suspended memberships, tap credit reserve accounts to cover fees, or report unpaid membership fees to credit bureaus. It must work to remove existing negative reports.4Consumer Financial Protection Bureau. Stipulated Final Judgment and Order
New York Attorney General’s Instacash Lawsuit
On April 14, 2025, New York Attorney General Letitia James sued MoneyLion in New York state court over Instacash, a product marketed as a 0% APR cash advance with no mandatory fees.5New York Attorney General. State of New York v. MoneyLion Inc. Complaint Users can get advances of up to $500, repaid automatically from their next paycheck. Optional “Turbo” delivery costs $0.49 to $8.99, and users can add a tip.6MoneyLion. MoneyLion Pricing MoneyLion’s terms state Instacash “is not a loan” and that there is no legal obligation to repay.7MoneyLion. Instacash Terms and Conditions
The state disagrees on both fronts. The complaint alleges that turbo fees are effectively mandatory because declining them delays funds by up to five days, and that MoneyLion uses “dark patterns” — pre-selected fee options, friction on removing tips, and manipulative tip anchors — to steer users into paying. Once fees and tips are counted, the state says, effective annualized rates often exceed 350%, in violation of New York usury law. The complaint also alleges that MoneyLion uses algorithms to predict direct deposit arrivals so it can debit repayments ahead of rent, groceries, and other obligations. The state seeks an injunction, restitution, disgorgement, damages, and penalties under Executive Law § 63(12) and General Business Law §§ 349 and 350.5New York Attorney General. State of New York v. MoneyLion Inc. Complaint
MoneyLion moved the case to federal court in May 2025. On November 12, 2025, Judge Colleen McMahon remanded it back to state court, where it remains pending.8CourtListener. People of the State of New York v. MoneyLion Inc.
Baltimore’s Payday Lending Lawsuit
On October 6, 2025, the City of Baltimore filed suit in the Circuit Court for Baltimore City, describing Instacash as a “digital-age payday lending scheme.” The city alleges that fees and tips push effective APRs to more than ten times Maryland’s 33% legal maximum, violating Baltimore’s Consumer Protection Ordinance.9Baltimore City. Mayor Brandon M. Scott Sues MoneyLion for Operating Digital-Age Payday Lending Scheme
The city says nearly 75% of Instacash users take out multiple advances within a two-week window, and that the cumulative costs eat into money residents need for rent, utilities, and food while raising the risk of overdraft fees.9Baltimore City. Mayor Brandon M. Scott Sues MoneyLion for Operating Digital-Age Payday Lending Scheme The case is active.10Fox Baltimore. Baltimore City Lawsuit MoneyLion Payday Lending Scheme
Private Class Actions in Florida and California
Two consumer class actions are moving through federal court.
Burkhardt v. MoneyLion (SDNY)
Johnathan and Deven Burkhardt filed a proposed class action in May 2025, later transferred to the Southern District of New York as Case No. 1:25-cv-06761.11CourtListener. Burkhardt v. MoneyLion Technologies Inc. The complaint claims that Instacash and Credit Builder loans carry usurious rates disguised as turbo fees, tips, and monthly memberships, and alleges violations of the Military Lending Act, the Truth in Lending Act, and Florida’s usury statute. The proposed classes include a nationwide class of servicemembers and their spouses and a Florida subclass.12National Consumer Law Center. Burkhardt et al. v. MoneyLion Technologies Inc. et al.
On April 15, 2026, Judge Dale E. Ho denied MoneyLion’s motions to compel arbitration and to dismiss, letting the case proceed to discovery and class certification.13Justia. Burkhardt et al v. MoneyLion Technologies Inc. et al
Bisquera v. MoneyLion (C.D. Cal.)
Three California residents — Elena Bisquera, Jason Jones, and Chris Valencia — filed a proposed class action on June 15, 2026, in the Central District of California (Case No. 5:26-cv-3296), targeting both Instacash and Credit Builder. The plaintiffs allege that Instacash’s effective rate can reach 495% once turbo fees and tips are counted, despite the 0% APR advertising. On the Credit Builder side, the complaint alleges that one plaintiff took out an $899 loan but received only $100 upfront, with the remaining $799 held in a reserve account, and paid more than $1,260 in total.14Courthouse News Service. MoneyLion Accused of Disguising Loan Interest as Fees in Proposed Class Action
The claims include the federal Truth in Lending Act, the Electronic Fund Transfer Act, California’s usury provisions, the California Financing Law, the Unfair Competition Law, the False Advertising Law, and the Consumer Legal Remedies Act. The proposed class covers California residents who paid turbo fees, tips, or membership charges on MoneyLion products.15U.S. District Court, Central District of California. Bisquera et al. v. MoneyLion Technologies Inc. et al. Complaint MoneyLion had not responded to the complaint as of June 2026.
Why Courts Keep Calling Instacash a Loan
One question runs beneath nearly every case against MoneyLion: is Instacash credit? The company’s terms say it isn’t. Courts are increasingly finding that it is.
In Lowe v. MoneyLion Technologies Inc., decided March 9, 2026, in the Southern District of New York, the court denied MoneyLion’s motion to compel arbitration and held that its cash advances fall “squarely within the definition of credit,” joining what it called a growing consensus. By early 2026, at least fourteen federal courts had ruled that earned wage access advances are subject to credit laws including TILA and the MLA.16National Consumer Law Center. Courts Reject Claims That Payday Loan Apps Don’t Offer Loans
The consequences follow from the label. If Instacash is credit, the turbo fees and tips are potentially finance charges that must be disclosed in the APR. If that APR exceeds a state usury cap or the MLA’s 36%, the loans may be unlawful. And because MLA violations void mandatory arbitration provisions, MoneyLion has repeatedly lost motions to force these disputes out of court, as in Burkhardt and Lowe.17National Consumer Law Center. Successful Challenges to Earned Wage Payday Loans
A Separate Track: Fusion SPAC Stockholder Settlement
Not every MoneyLion lawsuit is about lending. A separate class action in the Delaware Court of Chancery, Martel v. Fusion Sponsor LLC (Case No. 2024-0329-NAC), targeted the September 2021 SPAC merger that took MoneyLion public. Former Fusion Acquisition Corp. stockholders alleged that Fusion’s directors, officers, and sponsor breached fiduciary duties by pushing a value-destructive deal, aided by CEO Dee Choubey and financial advisor Broadhaven Capital Partners, and that a misleading proxy statement discouraged stockholders from redeeming shares before closing.18Wolf Popper LLP. MoneyLion Inc. Stockholder Litigation
On July 24, 2025, Vice Chancellor Nathan A. Cook approved a $12.75 million settlement.19Mondaq. Court Approves $12.75 Million Settlement Resolving MoneyLion Stockholder Litigation The class included holders of Fusion Class A Common Stock as of September 17, 2021, who did not redeem all their shares, and the claim deadline was September 2, 2025.20Wolf Popper LLP. $12.75 Million Settlement Reached in MoneyLion Stockholder Litigation
MoneyLion’s Position and the Gen Digital Deal
MoneyLion has consistently pushed back. When the CFPB sued in 2022, the company called the allegations “meritless” and “false.”21Banking Dive. CFPB Sues MoneyLion Alleging Military Lending Act Violations CEO Dee Choubey has argued that the membership program delivers value beyond lending, including credit monitoring, financial literacy tools, and investment accounts, and that attributing the whole fee to the cost of a loan ignores those benefits.22American Banker. MoneyLion Reports Profitable December, Shrugs Off CFPB Suit
The litigation now sits inside a pending change of control. MoneyLion disclosed in its 2024 annual report that it signed a merger agreement with Gen Digital Inc. on December 10, 2024, under which each share of MoneyLion Class A common stock would convert into $82.00 in cash plus one contingent value right. Ongoing and potential future litigation is a disclosed risk factor for the deal.23U.S. Securities and Exchange Commission. MoneyLion Inc. Form 10-K (Fiscal Year 2024)