Baltimore Sues MoneyLion For Trapping Residents In Debt Cycle

[ad_1] by Sharelle B. McNair October 8, 2025

Because the Trump Administration eased insurance policies surrounding company oversight, Baltimore Metropolis Solicitor Ebony Thompson challenges extra native governments to go after firms with “unhealthy company conduct.”

The town of Baltimore introduced plans to sue know-how firm MoneyLion Applied sciences Inc. over alleged discriminatory practices that the town says saved its Black residents in a steady cycle of debt, The Baltimore Solar reported.

In an announcement by Mayor Brandon Scott, the lawsuit, in collaboration with Berger Montague, accuses MoneyLion of violating the town’s Client Safety Ordinance by deceptive advertising initiatives, particularly by selling high-cost, short-term loans underneath the guise of “Instacash Advances.”

The litigation claims that MoneyLion lured residents in by advertising Instacash Advances as a distinct type of payday lending, providing prospects “zero-interest loans.”

Nevertheless, Allure Metropolis alleges the narrative did not alert shoppers in regards to the hidden charges that got here with it and as an alternative, inspired customers to pay “suggestions” that resulted in rates of interest greater than 10 instances the 33% APR cap established by Maryland legislation, in line with CBS Information.

In a press release, Scott mentioned the corporate trapped the town’s most weak residents. “MoneyLion has preyed on Baltimoreans, trapping our most weak residents in borrowing cycles that made it tougher and tougher for them to pay payments and put meals on the desk,” the mayor mentioned.

“Not solely is that unsuitable, it’s unlawful. We’re dedicated to holding MoneyLion accountable — as we’ve executed for different large companies attempting to make the most of our residents.”

Knowledge to assist Baltimore’s debt declare was included within the lawsuit. Analysis from the Middle for Accountable Lending confirmed that Individuals who use apps corresponding to MoneyLion are susceptible to incurring extra overdraft charges and taking out a number of advances inside weeks of creating an account. The town argues that patterns revealed by the info show how shoppers change into trapped in recurring debt. Berger Montague legal professional James Hannaway says the swimsuit is the “first step in stopping MoneyLion from preying on Baltimore’s most financially weak residents.”

Because the Trump Administration eased insurance policies surrounding company oversight, Baltimore Metropolis Solicitor Ebony Thompson issued a name to motion for native governments to observe in Baltimore’s footsteps, which has focused different main companies, difficult “unhealthy company conduct.” “Actions like these are sadly crucial to guard shoppers from unhealthy company conduct,” Thompson mentioned.

“With the federal authorities now abdicating its tasks to shoppers, states and localities should choose up the slack.”

Former Baltimore Metropolis Solicitor Andre M. Davis celebrated the town’s views, saying he can’t keep in mind the patron safety legislation ever being examined to this caliber.

Including MoneyLion to the record, the town has pending litigations towards sports activities betting giants, DraftKings and FanDuel, amid accusations that the businesses use unfair and misleading promoting practices to take advantage of weak communities, luring them into playing habit.

In partnership with the state of Maryland, each governments issued a swimsuit towards Austrian firearms producer Glock, alleging the corporate doesn’t do sufficient to cease merchandise from being remodeled into unlawful machine weapons with auto sear units also known as “Glock switches.”