Baltimore takes legal action against MoneyLion for predatory lending practices

In early October 2025, the City of Baltimore initiated a lawsuit against MoneyLion Technologies Inc., a financial technology firm, over allegations of predatory lending practices. The suit, announced by Mayor Brandon Scott, accuses MoneyLion of employing misleading marketing tactics and imposing excessive fees that have led low-income residents into cycles of debt. The city's Department of Law, in partnership with co-counsel Berger Montague, filed the complaint alleging violations of Baltimore's Consumer Protection Ordinance. The lawsuit outlines the ways in which MoneyLion's small, short-term 'Instacash Advances' are presented with deceptive terms that misrepresents the true costs for consumers. City officials stated that MoneyLion's practices trap vulnerable residents in accumulating debt that exacerbates financial hardships. Mayor Scott emphasized that the company’s operations resemble a 'digital-age payday lending scheme,' violating local and state laws by hiding high-interest fees. The lawsuit claims that fees that are labeled as optional 'tips' escalate borrowing costs to more than ten times the maximum legal annual interest rate of 33% in Maryland. These hidden charges are also said to pressure users into high-cost borrowing, leading to what the city describes as 'usurious' interest rates. Furthermore, the lawsuit refers to research from the Center for Responsible Lending which highlights how users of financial apps similar to MoneyLion often experience higher overdraft fees and tend to take out multiple credit advances within short timeframes. This pattern demonstrates that consumers using these financial technologies are often caught in a perpetual cycle of debt. The city of Baltimore is committed to protecting its residents, especially those who are financially vulnerable, from manipulative lending tactics. With this legal action, Baltimore aims to hold MoneyLion accountable for its business practices, as officials point out that the increase in economic strain from such predatory lending is detrimental to community welfare. In the words of James Hannaway, a representative from Berger Montague, the city is taking the first step to put a stop to MoneyLion's predatory actions.