Quick Answer: MoneyLion, the popular cash advance app, has been sued by both the CFPB and New York Attorney General over hidden fees that make its “0% APR” advances far more expensive than advertised. The company agreed to pay $1.75 million to settle the CFPB lawsuit and faces ongoing litigation from NY AG Letitia James, who alleges effective interest rates reaching 750%.
The “Free” Cash Advance That Isn’t Free
MoneyLion advertises cash advances with “0% interest” and promises “up to $500 any day.” Sounds great on the surface. But according to the CFPB and the New York Attorney General, what actually happens is very different.
How the Fees Add Up
According to NY AG James, MoneyLion uses several layers of fees that aren’t obvious upfront:
“Turbo Fees” for Instant Access
Want your money right away? MoneyLion charges a “turbo fee” of up to $8.99 for a $100 advance. The actual cost to send funds instantly? According to the National Consumer Law Center, it’s about 4.5 cents. That’s a 20,000% markup.
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The Math: MoneyLion limits each advance to $100. To get the advertised $500, you need five separate advances with five separate turbo fees. That’s $44.95 in fees just to access $500 of your own earned wages — money you’ve already worked for.
The Tipping Pressure
MoneyLion “relentlessly” pressures users to add a tip on top of the fees, according to the NY AG complaint. About 40% of advances included tips. The AG alleges the company implicitly threatens negative consequences for users who don’t tip.
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Delayed Deposits for Non-Payers
If you decline the turbo fee, MoneyLion artificially delays your deposit. Want your money faster? Pay the fee. It’s a classic pressure tactic — create urgency, then charge for the solution.
The Membership Trap
The CFPB’s lawsuit focused on another issue: MoneyLion’s membership program. According to Banking Dive:
- MoneyLion charged $19.99-$29/month for membership — required to access loans
- Borrowers couldn’t cancel membership until their loans were paid off
- Unpaid membership fees blocked cancellation attempts
- Service members were charged rates exceeding the 36% Military Lending Act cap
The $1.75 million CFPB settlement now bars MoneyLion from preventing borrowers from canceling memberships, collecting past unpaid membership fees, and blocking borrowers from paying off loans using their credit reserve accounts.
Why Cash Advance Apps Need Scrutiny
MoneyLion isn’t alone. The earned wage access industry — apps that let you access paychecks early — has exploded in popularity. But many of these apps use the same playbook:
What They Advertise
- “0% APR” or “no interest”
- “Get paid early”
- “Free cash advances”
- “Optional tips”
What Actually Happens
- Mandatory fees for instant access
- You’re borrowing your own money with fees attached
- Effective rates reach hundreds of percent APR
- Aggressive tipping creates social pressure to pay more
Watch For: Any financial product that charges you fees to access money you’ve already earned is effectively a payday loan — regardless of what they call it. The fancy app interface and “0% interest” marketing doesn’t change the math.
What to Do If You Use MoneyLion
- Review your fee history — Check how much you’ve actually paid in turbo fees, tips, and membership charges over the past year. The total may surprise you.
- Cancel if you want out — Under the CFPB settlement, MoneyLion can no longer prevent you from canceling your membership. If they try, file a CFPB complaint.
- Check your credit report — Some CFPB complaints about MoneyLion involved incorrect credit reporting. Pull your reports at AnnualCreditReport.com.
- File a CFPB complaint at consumerfinance.gov/complaint if you’ve been charged unexpected fees
- Consider alternatives — An emergency fund (even $500) eliminates the need for cash advance apps entirely. If you’re stuck in a cycle, the underlying budget math needs attention.
Caught in a Cycle? If you’re using cash advance apps regularly to make it between paychecks, the real problem isn’t timing — it’s that the math is broken. Take the free Find Your Path quiz to figure out where you actually stand and what your real options are.
Sources
- CFPB — Original lawsuit against MoneyLion for overcharging servicemembers and membership traps
- Banking Dive — $1.75M settlement details and terms
- Consumer Finance Monitor — NY AG lawsuit against MoneyLion and DailyPay
- National Consumer Law Center — Analysis of MoneyLion’s fee structure and effective APR
Frequently Asked Questions
Is MoneyLion a payday loan?
MoneyLion markets itself as an “earned wage access” app offering cash advances with 0% APR. However, the New York Attorney General alleges that when fees and tips are factored in, the effective interest rate can reach 750%. The CFPB has also taken action against the company. Whether you call it a payday loan or a cash advance, the cost to consumers can be substantial.
Can I cancel my MoneyLion membership?
Yes. Under the November 2025 CFPB settlement, MoneyLion is now barred from preventing borrowers from canceling their membership. They also cannot collect past unpaid membership fees or block you from paying off loans using your credit reserve account. If you’re having trouble canceling, file a complaint with the CFPB.
How do I file a complaint about MoneyLion?
File a complaint with the CFPB at consumerfinance.gov/complaint. Include details about any unexpected fees, membership issues, or incorrect credit reporting. You can also contact the New York Attorney General’s Consumer Helpline at (800) 771-7755 if you’re a New York resident.
Are cash advance apps safe to use?
Cash advance apps can be convenient for occasional use, but frequent use often creates a cycle of dependency. Watch for turbo fees, mandatory tipping, subscription charges, and other costs that add up. If you’re using these apps regularly, it may indicate a broader budget issue that needs addressing.
TL;DR: MoneyLion faces a $1.75M CFPB settlement and a NY AG lawsuit alleging its “0% APR” cash advances actually carry effective rates up to 750% through hidden turbo fees, forced tipping, and membership traps. If you use the app, review your total fees paid and know that you can now cancel your membership freely. Building even a small emergency fund is a better long-term solution than cash advance apps.
(Source: CFPB / NY Attorney General / National Consumer Law Center)
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