- MoneyLion ( NYSE: ML ) stock has plunged 29% in Thursday trading after the Consumer Financial Protection Bureau sued the digital financial platform for allegedly imposing illegal and excessive charges on service members and their dependents, the CFPB said in a statement Thursday.
- The bureau alleges that MoneyLion violated the Military Lending Act by charging more than the legally allowable 36% rate cap on loans to service members and their dependents through a combination of stated interest rates and monthly membership fees. The CFPB also contends that the company required customers to join a membership program to access certain low APR loans, but didn't allow them to cancel their memberships until the loans were repaid.
- The suit said the company charged monthly membership fees that ranged from $19.99 to $29. While it led consumers to believe they could cancel the membership at any time, MoneyLion ( ML ) allegedly refused customers' requests to cancel their memberships if they had outstanding loan balances.
- The company didn't immediately respond to a request for comment.
- The CFPB said this is its fourth enforcement action related to the Military Lending Act in the past two years.
- MoneyLion ( ML ) became a publicly traded company Sept. 23, 2021 after it merged with Fusion Acquisition , a SPAC; its shares have dropped 89% in the past year.
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MoneyLion stock plummets after CFPB files lawsuit on overcharging service members