OneMain Financial is facing a major lawsuit filed in March 2026 by a bipartisan group of 13 state attorneys general who accuse the subprime lender of packing consumer loans with hidden insurance products and membership fees. The company is also defending a proposed class action over its lending to active-duty servicemembers, and it recently settled a separate case in Florida over after-hours debt collection calls. All of this comes after a 2023 federal enforcement action against OneMain for similar add-on conduct.
The 13-State Attorney General Lawsuit
On March 16, 2026, attorneys general from New York, Pennsylvania, Colorado, Maryland, Nevada, New Hampshire, New Jersey, North Dakota, Oklahoma, South Dakota, Virginia, Washington, and Wisconsin filed a 20-count complaint against OneMain Holdings, Inc. and affiliated entities in the U.S. District Court for the Southern District of New York.1New York Attorney General. Attorney General James Leads Bipartisan Coalition Suing Predatory Lender OneMain New York Attorney General Letitia James leads the coalition, which includes both Democratic and Republican officials.2PBS NewsHour. OneMain Financial Sued by 13 Attorneys General Over Hidden Loan Add-Ons
The complaint says OneMain advertises straightforward personal loans with “clear and easy” terms and then, once a borrower is at closing, pressures them into buying products they never asked about. The add-ons named in the case include credit life insurance, credit disability insurance, involuntary unemployment insurance, guaranteed asset protection (GAP) for auto title loans, and membership clubs marketed under names like “Silver Safeguard” and “Auto Plus.”3New York Attorney General. New York et al. v. OneMain Holdings, Inc., Complaint Closings are typically done electronically or by phone. According to the states, employees were told to keep pitching the add-ons until a borrower said no three separate times.4New Jersey Office of the Attorney General. AG Davenport Sues OneMain Financial for Packing Loans With Add-Ons
How the Add-Ons Inflated What Borrowers Paid
Because the add-ons were sold as “single premium” products, the full cost was rolled into the loan balance at closing. That raised both the principal and the interest owed. The complaint gives an example of a borrower who refinanced a balance and took only $2,730 in new cash, but was charged $1,674 in add-on premiums. With interest, those add-ons alone ended up costing the borrower $2,844, roughly $104 in add-on charges for every $100 of new money borrowed.3New York Attorney General. New York et al. v. OneMain Holdings, Inc., Complaint
The state-level numbers are similar. In 2022, Pennsylvania borrowers paid an average of about $800 per loan for add-ons at roughly 26% APR, and New Jersey borrowers paid about $826 per loan at 26.29% APR.3New York Attorney General. New York et al. v. OneMain Holdings, Inc., Complaint Between 2021 and 2022, OneMain sold roughly $27 million worth of add-ons in New Jersey alone.4New Jersey Office of the Attorney General. AG Davenport Sues OneMain Financial for Packing Loans With Add-Ons Nationally, the complaint alleges the company took in “hundreds of millions of dollars” in unlawful fees and interest.5Maryland Office of the Attorney General. Attorney General Brown Sues OneMain Financial for Alleged Bait-and-Switch Lending Scheme
Two other facts feature prominently in the complaint. Employees, branch managers, and district managers earned commissions on every add-on sold and lost that commission if the product was later canceled, and missing sales targets could trigger discipline or a poor performance review.3New York Attorney General. New York et al. v. OneMain Holdings, Inc., Complaint And the insurers underwriting many of the add-ons, American Health and Life Insurance Company and Triton Insurance Company, are wholly owned subsidiaries of OneMain Holdings.6AM Best. AM Best Comments on OneMain Insurance Subsidiaries The states argue that arrangement let OneMain keep most of the premium revenue and was never disclosed to borrowers.
What the States Are Asking For
The 20 counts include federal claims under the Consumer Financial Protection Act (unfair, deceptive, and abusive practices) and the Truth in Lending Act (inaccurate disclosures of finance charges and APR), along with state consumer protection claims under New York’s Executive Law and General Business Law, Pennsylvania’s Consumer Protection Law, Colorado’s Consumer Protection Act, the New Jersey Consumer Fraud Act, and equivalent statutes in the other participating states.3New York Attorney General. New York et al. v. OneMain Holdings, Inc., Complaint
The coalition wants the court to permanently stop the practices, order restitution to affected borrowers, impose civil penalties, and force OneMain to give up profits from the alleged scheme. The states are also asking the court to require OneMain to withdraw negative credit reporting tied to the add-on products and to drop pending collection actions and lawsuits involving those products.1New York Attorney General. Attorney General James Leads Bipartisan Coalition Suing Predatory Lender OneMain
OneMain’s Response
OneMain has denied the allegations, calling them “untrue” and “wrong on the facts and wrong on the law.” The company said the same issues were already reviewed by the Consumer Financial Protection Bureau and resolved in a 2023 consent order, and it has said it will “litigate this case vigorously.”2PBS NewsHour. OneMain Financial Sued by 13 Attorneys General Over Hidden Loan Add-Ons No rulings have been issued in the case as of mid-2026.
The 2023 CFPB Consent Order
The new lawsuit did not come out of nowhere. On May 31, 2023, the CFPB issued a consent order against OneMain after finding the company had engaged in deceptive, unfair, and abusive practices tied to add-on products, including credit life insurance, credit disability insurance, and identity theft protection.7Consumer Financial Protection Bureau. OneMain Financial Holdings, LLC, et al.
The CFPB said OneMain employees led consumers to believe the add-ons were required to get a loan, charged for products people never agreed to buy, and failed to refund interest that accrued on canceled add-ons during what OneMain marketed as a “full refund period.” Over four years, more than 25,000 customers paid about $10 million in interest on products they had canceled inside that supposed risk-free window.8Consumer Financial Protection Bureau. CFPB Consent Order, OneMain Financial Holdings
The order required OneMain to pay $10 million in consumer redress and a separate $10 million civil penalty.7Consumer Financial Protection Bureau. OneMain Financial Holdings, LLC, et al. It also imposed operational changes: a mandatory 60-day full-refund window on add-on purchases, written disclosures within 72 hours showing the product’s total cost, monthly payments with and without it, and cancellation instructions, plus restrictions on how the products could be pitched (no marketing a lower rate as a benefit of buying an add-on, no quoting the with-add-on rate before the without-add-on rate, and no raising rates when a customer canceled after closing).8Consumer Financial Protection Bureau. CFPB Consent Order, OneMain Financial Holdings
The state coalition’s 2026 case is essentially the argument that OneMain kept doing the same thing anyway.
Military Lending Act Class Action
A separate proposed class action, Ramirez v. OneMain Financial Group LLC, was filed on April 2, 2024, in the U.S. District Court for the Eastern District of Virginia.9CourtListener. Ramirez v. OneMain Financial Group LLC The plaintiff alleges OneMain violated the Military Lending Act, which caps the APR on loans to covered servicemembers at 36%. His loan was written at 35.99% APR, but the complaint says the true rate, once all fees and charges were included, was 37.372%.10ClassAction.org. OneMain Financial Facing Class Action Over Alleged Military Lending Act Violations
The suit also says OneMain used contract terms the MLA bars for servicemember loans, including mandatory binding arbitration, a jury trial waiver, and a class action ban, and that the company unlawfully took the plaintiff’s bank account as security and used the loan to refinance existing debt.11ClassAction.org. Ramirez v. OneMain Financial Group LLC, Class Action Complaint The proposed class would cover all MLA-covered borrowers who signed substantially similar loan agreements and paid interest in the five years before the filing. OneMain moved to dismiss in June 2024 and filed an answer to an amended complaint in August 2024.9CourtListener. Ramirez v. OneMain Financial Group LLC No ruling on the motion or on class certification appeared in the docket as of early 2025.
Florida After-Hours Collection Settlement
One case against OneMain has already resolved. In Matuch v. OneMain Financial Group, LLC (Case No. CACE-24-007594, Circuit Court of Broward County, Florida), the plaintiff alleged OneMain sent account communications between 9:00 p.m. and 8:00 a.m., which the Florida Consumer Collection Practices Act prohibits.12OneMain FCCPA Settlement. Frequently Asked Questions
OneMain agreed to make up to $500,000 available to settle. Class members were Florida-address customers who received after-hours communications between May 31, 2022, and April 23, 2025, with individual payouts capped at $500 on a pro rata basis. The claim deadline was April 23, 2025, and the final approval hearing was set for May 13, 2025. Payments started going out on August 15, 2025, administered by Kroll Settlement Administration LLC.13OneMain FCCPA Settlement. Matuch v. OneMain Financial Group, LLC Settlement If you did not file a claim by the April 2025 deadline, you are not eligible for a payment from this settlement.