MoneyLion is a financial technology company that offers online installment loans. In order to get a low-APR installment loan, customers must sign up for a MoneyLion membership and pay monthly fees. MoneyLion has personalized content, products, and financial advice to change the financial system for hard-working Americans. The company’s data and technology give customers more power.
About MoneyLion
MoneyLion keeps its customers interested and educated by sending them personalized content about money and related things daily. It provides a full set of financial and non-financial solutions by combining its low-cost financial products with its marketplace technology and affiliate network partners.
MoneyLion uses its data, technology, and network to offer enterprise customers embedded finance and marketplace solutions. Their more than 750 employees have worked hard to improve and come up with financial ways to use their products to help middle-income families. MoneyLion has helped millions of Americans take control of their finances and live their best financial lives every day since 2013.
All You Need to Know About the Allegations
The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against MoneyLion Technologies and 38 of its subsidiaries, claiming that the company charged illegal and excessive fees to servicemembers and their dependents. The CFPB alleges that MoneyLion violated the Military Lending Act (MLA) by charging service members and their families illegal and unfair fees.
The CFPB has warned against the neobank, saying that it charges interest rates and fees exceeding the 36% cap. The neobank requires customers to join a membership program to get its low APR installment loan product, but members can’t cancel their memberships until their loans are paid off.
MoneyLion was also accused of trapping borrowers in its membership program, giving out useless reward points, and having bad customer service. Companies broke the law when they made loans contingent on paying a monthly membership fee and made it hard to cancel. The CFPB said the fintech’s membership fees exceeded the MLA’s 36% cap when added to loan interest rates. MoneyLion told borrowers they owed loan payments and fees they didn’t owe because the loans were invalid under the Military Lending Act.
Customers who joined neobank MoneyLion and paid $19.99 to $29.00 per month could get low APR products. MoneyLion said customers could cancel anytime, but those with outstanding loans couldn’t cancel or stop paying fees. Sometimes, MoneyLion didn’t cancel memberships after a loan was paid off if the customer owed membership fees.
Elaborate Explanation on MoneyLion’s Counterclaim
MoneyLion has been accused of breaking the law by the Consumer Financial Protection Bureau. The CFPB wants MoneyLion to stop breaking the law and refund customers. It also wants MoneyLion to pay a civil money penalty. This is not a ruling that the defendants violated the law.
MoneyLion’s stock surged on September 29th after the company responded to allegations by the Consumer Financial Protection Bureau (CFPB). The CFPB accused MoneyLion of misleading its customers, but the company responded, saying that the regulator was more interested in taking headlines than engaging in a productive conversation. MoneyLion promised to fight back against false claims.
MoneyLion has said that the CFPB’s claims about its membership offering – a small part of its business – are untrue. The company has worked on the membership offer with the CFPB “in good faith” for more than three years. MoneyLion stated that it holds its military and veteran customers in the highest regard and is always ready to help them improve their financial health.
Last But Not Least
The CFPB announced it had taken action against another bureau for violating the Military Lending Act. This is the fourth time in the past two years that the CFPB has taken such action. It’s unclear what exactly is happening, but MoneyLion has grown rapidly in recent years and met many of its goals.
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