The City of Baltimore has filed a lawsuit on behalf of its residents impacted by an alleged “lending scheme.”
What Lawsuit Entails
According to a press release, Mayor Brandon M. Scott and the City Council of Baltimore, represented by the Baltimore City Department of Law and Berger Montague, filed a lawsuit against MoneyLion Technologies Inc. The lawsuit claims the fintech company, which reaches nearly 14 million customers, participated in “a digital-age payday lending scheme” and violated the city’s consumer protection ordinance.
It states that the company trapped “some of the City’s most financially precarious residents in an exploitative cycle of debt” by misleading them into taking out Instacash Advances, which were marketed as “zero-interest” loans. However, customers who accept the loans also agree to pay fees and “tips” that exceed the state’s APR limit by more than tenfold. The press release notes that the maximum interest rate is 33% and cites the company’s misleading language as a manipulation tactic.
“MoneyLion has preyed on Baltimoreans, trapping our most vulnerable residents in borrowing cycles that made it harder and harder for them to pay bills and put food on the table,” Mayor Scott said, according to the press release. “Not only is that wrong, it’s illegal. We’re committed to holding MoneyLion accountable — as we’ve done for other big corporations trying to take advantage of our residents.”
City Solicitor Ebony M. Thompson of the Baltimore City Department of Law commented:
“Actions like these are unfortunately necessary to protect consumers from bad corporate conduct. With the federal government now abdicating its responsibilities to consumers, states and localities must pick up the slack.”
James Hannaway of Berger Montague weighed in on the matter and stated:
“We are proud to partner with the City of Baltimore to protect Baltimore consumers from these predatory and misleading tactics. Today, we take a first step in stopping MoneyLion from preying on Baltimore’s most financially vulnerable residents.”
The post City Of Baltimore Files Lawsuit Against MoneyLion, Accusing Fintech Lending Company Of Trapping Residents In A ‘Exploitative Cycle Of Debt’ appeared first on AfroTech.
The post City Of Baltimore Files Lawsuit Against MoneyLion, Accusing Fintech Lending Company Of Trapping Residents In A ‘Exploitative Cycle Of Debt’ appeared first on AfroTech.