News Summary
On October 6, 2025, Baltimore filed a lawsuit against MoneyLion Technologies Inc., claiming the company misleads users with marketing tactics and excessive fees, trapping low-income residents in debt. The city’s Department of Law argues that MoneyLion violated consumer protection laws through its ‘Instacash Advances,’ which are marketed as zero-interest but include hidden fees and pressure users to pay ‘tips’. The lawsuit seeks to mitigate the impact of these predatory lending practices on vulnerable populations and calls for local enforcement in the face of federal inaction.
Baltimore has filed a lawsuit against MoneyLion Technologies Inc. on October 6, 2025, alleging that the company engaged in misleading marketing and imposed excessive fees, ultimately trapping low-income residents in cycles of debt. This lawsuit is a significant move by the city, as it seeks to protect its residents from what Baltimore Mayor Brandon Scott described as “a digital-age payday lending scheme.”
The legal action was initiated by Baltimore’s Department of Law in collaboration with co-counsel Berger Montague. The complaint asserts that MoneyLion violated Baltimore’s Consumer Protection Ordinance through its promotion of “Instacash Advances,” which are marketed as a “zero-interest” alternative to payday loans. However, the suit claims that the terms associated with these advances are deceptive and include optional “tips” alongside hidden fees that inflate borrowing costs significantly.
According to the complaint, the costs related to the Instacash product can exceed Maryland’s legal annual interest rate limit of 33% by more than ten times. The city argues that MoneyLion obscures these financial burdens and exerts pressure on users to pay the so-called “tips.” The lawsuit describes these interest charges as “usurious” and illegal under applicable state and local laws, reflecting a broader trend of predatory lending practices in the digital financial landscape.
Research cited in the lawsuit from the Center for Responsible Lending indicates that users of MoneyLion frequently encounter higher overdraft fees and tend to take out multiple advances within short periods, perpetuating a cycle of debt. The city argues these patterns suggest consumers are becoming trapped in recurring financial obligations due to MoneyLion’s practices.
Furthermore, James Hannaway from Berger Montague highlighted a commitment to safeguarding Baltimore consumers from predatory practices, underscoring the need for local action to ensure the protection of residents. Baltimore City Solicitor Ebony Thompson also pointed out the critical necessity for local enforcement as a response to what is perceived as federal inaction regarding consumer protection.
The lawsuit details how borrowing small amounts through services like MoneyLion, such as $25, $50, or $100, can quickly lead to substantial financial liabilities. The city aims not only to hold MoneyLion accountable for its alleged practices but also to mitigate the negative impact these predatory lending tactics have on financially vulnerable populations in Baltimore.
As Baltimore takes this stand against misleading marketing and predatory lending practices, it reflects a growing concern over the financial well-being of low-income residents in the digital landscape where financial services are increasingly being offered. The outcome of this lawsuit may set a precedent for how similar cases are handled in the future and shape the regulatory environment surrounding online lending practices.
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Additional Resources
- CBS News: Baltimore Lawsuit Against MoneyLion
- Wikipedia: Consumer Protection
- Fox Baltimore: Baltimore City Files Lawsuit Against MoneyLion
- Google Search: Baltimore MoneyLion predatory lending
- Law360: Baltimore Sues Fintech Over Digital Payday Lending Scheme
- Google Scholar: Predatory Lending
- Baltimore Sun: Baltimore Sues MoneyLion Over Predatory Loans
- Encyclopedia Britannica: Predatory Lending
Author: STAFF HERE BALTIMORE WRITER
BALTIMORE STAFF WRITER The BALTIMORE STAFF WRITER represents the experienced team at HEREBaltimore.com, your go-to source for actionable local news and information in Baltimore, Baltimore County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Baltimore Book Festival, Preakness Stakes, and Artscape. Our coverage extends to key organizations like the Baltimore Chamber of Commerce and Visit Baltimore, plus leading businesses in shipping and healthcare that power the local economy such as the Port of Baltimore and Johns Hopkins Medicine. As part of the broader HERE network, we provide comprehensive, credible insights into Maryland's dynamic landscape.
