Mayor Brandon M. Scott Sues MoneyLion for Operating Digital-Age Payday Lending Scheme

BALTIMORE, MD (Monday, October 6, 2025) - Today, Mayor Brandon M. Scott announced that the City of Baltimore filed a lawsuit against MoneyLion Technologies Inc. ("MoneyLion") for misleading marketing and usurious interest charges that trap some of the City's most financially precarious residents in an exploitative cycle of debt. The Mayor and City Council of Baltimore, represented by the Baltimore City Department of Law and Berger Montague, filed the lawsuit against MoneyLion for violating Baltimore's Consumer Protection Ordinance (CPO) by misleading and manipulating consumers into taking out high-cost, high-frequency, small-amount, short-term loans known as Instacash Advances.

"MoneyLion has preyed on Baltimoreans, trapping our most vulnerable residents in borrowing cycles that made it harder and harder for them to pay bills and put food on the table," said Mayor Brandon M. Scott. "Not only is that wrong, it's illegal. We're committed to holding MoneyLion accountable - as we've done for other big corporations trying to take advantage of our residents."

"Actions like these are unfortunately necessary to protect consumers from bad corporate conduct," said City Solicitor Ebony M. Thompson of the Baltimore City Department of Law. "With the federal government now abdicating its responsibilities to consumers, states and localities must pick up the slack."

The lawsuit alleges that MoneyLion operates as a modern-day payday lender. MoneyLion markets itself as an "earned wage advance" provider and an alternative to payday lenders. The company's marketing emphasizes consumers' instant access to "zero interest" loans through Instacash Advances. However, Instacash Advances include fees and "tips" that add up to more than 10 times the maximum APR allowed for consumer loans in Maryland, which is 33%. MoneyLion hides and misrepresents these fees and manipulates consumers to collect "tips." All told, these costs add up to usurious interest rates that violate Maryland law.

The lawsuit explains how these tactics lead to a cycle of debt for consumers. Borrowing at $25, $50, or $100 at a time, consumers rack up huge costs paid to MoneyLion. As these costs add up, borrowers have less money available to pay for utility bills, rent, and food. When these consumers do not have enough for utility bills, rent, or food, they take out more Instacash Advances, and the cycle begins anew. According to a recent study conducted by the Center for Responsible Lending, consumers using apps like MoneyLion see increases in overdraft fees after taking out their first loan. The same study found that nearly three quarters of users take out more than one loan within a two-week period.

"We are proud to partner with the City of Baltimore to protect Baltimore consumers from these predatory and misleading tactics," said James Hannaway of Berger Montague. "Today, we take a first step in stopping MoneyLion from preying on Baltimore's most financially vulnerable residents."

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