By Megan Sayles
AFRO Staff Writer
msayles@afro.com
The city of Baltimore has lodged a lawsuit against MoneyLion, alleging that the fintech company runs a modern-day payday lending scheme that manipulates residents into taking out high-cost, frequent, small-amount, short-term loans known as “Instacash.”
The suit accuses MoneyLion of violating Baltimore’s Consumer Protection Ordinance (CPO) with misleading marketing and predatory interest charges. Mayor Brandon M. Scott says the company’s actions have impacted some of the most financially vulnerable Baltimoreans.
“We’ve seen them prey on Baltimoreans, trapping the most vulnerable residents into these borrowing cycles that made it harder and harder for them to pay their bills and put food on the table for their families,” said Scott. “One of the main goals of this trial is asking the court to invalidate these loans because we want to hold them accountable—as we’ve done for other big corporations, whether it be gun manufacturers or drug companies—for trying to take advantage of our residents.”
MoneyLion describes its cash advances, which allow individuals to access up to $500, as having no interest or mandatory fees. However, individuals who want funds immediately face transfer fees, and the app prompts users to provide optional tips that increase the overall cost.
According to city officials, these extra costs can amount to 10 times Maryland’s legal interest rate cap of 33 percent. As users continue to borrow and rack up costs, affording rent, food and utilities becomes more difficult.
A 2025 study by the Center for Responsible Lending found that using app-based payday lenders is associated with upticks in overdraft fees. It also discovered that 72 percent of users take out more than one loan in a two-week period.
In Maryland specifically, a survey from the Economic Action Maryland Fund determined that nearly 50 percent of respondents used one or more payday advance products— 89 percent of whom paid for immediate access to cash. The local economic justice organization issued a statement, applauding the city’s suit.
“As wages remain stagnant, the cost of living soars, and families struggle to make ends meet, some have resorted to using apps that promise help. Instead, many city residents find themselves paying more than 330 percent to have borrowed against their own hard-earned paycheck,” said the Economic Action Maryland Fund in a statement. “MoneyLion and similar companies have emerged to provide paycheck advances prior to payday. However, these products are simply dressed up versions of payday loans, which have been banned in Maryland for more than 20 years.”
For Baltimore officials, monitoring corporate practices has become even more urgent under the 47th president, whose policies many argue favor big business over consumer protections. In March, Public Citizen, a consumer advocacy nonprofit, reported that his administration had dropped, withdrawn or paused investigations and enforcement actions involving over 100 corporations.
“Actions like these are unfortunately necessary to protect consumers from bad corporate conduct,” said Baltimore City Solicitor Ebony M. Thompson in a statement. “With the federal government now abdicating its responsibilities to consumers, states and localities must pick up the slack.”
Residents who’ve been impacted by MoneyLion’s practices can file individual complaints with the Maryland Attorney General’s Consumer Protection Division. Any Baltimorean, regardless of income, can also receive free, trusted advice from the city’s Financial Empowerment Center.
