WASHINGTON (Reuters) -The U.S. Consumer Financial Protection Bureau and the online lender MoneyLion have agreed to resolve allegations made under the prior administration that the company imposed illegal and excessive charges on military service members and their families, according to court papers. The announcement came the same day the CFPB’s acting director, Russell Vought, said […]
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MoneyLion, CFPB agree to settle Biden-era allegations of unfair charges on military personnel
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WASHINGTON (Reuters) -The U.S. Consumer Financial Protection Bureau and the online lender MoneyLion have agreed to resolve allegations made under the prior administration that the company imposed illegal and excessive charges on military service members and their families, according to court papers.
The announcement came the same day the CFPB’s acting director, Russell Vought, said the agency would be closed down within months even though the administration has said in court it has no such plan.
The CFPB and MoneyLion “have reached an agreement in principle to fully resolve this action, including injunctive and monetary terms,” lawyers for both sides said in a letter filed in the U.S. District Court for the Southern District of New York. They expect to submit a proposed judgment to the court by November 3, it said.
Representatives for CFPB and MoneyLion did not immediately respond to a request for comment. The case had been one of the few President Donald Trump’s administration had allowed to continue after canceling almost all other pending enforcement actions.
In 2022, the CFPB accused MoneyLion of targeting military families, illegally imposing fees and making it hard to cancel monthly subscriptions to a membership program that offered access to loans marketed as having low interest rates.
According to an internal memo in April, the CFPB planned to sharply narrow the scope of its enforcement and oversight but would focus on threats to military personnel. The agency’s leadership nevertheless attempted earlier this year to dismiss most employees in an office dedicated to supporting members of the military, court papers showed in April.
New York Attorney General Letitia James, who has pursued cases dropped by the CFPB, in April sued MoneyLion and the company DailyPay, accusing them of predatory payday lending. DailyPay has rejected the allegations.
(Reporting by Douglas Gillison in Washington; Editing by Nia Williams and Deepa Babington)