CFPB settles with MoneyLion as enforcement activity winds down

The Consumer Financial Protection Bureau (CFPB) has finalized a $1.75 million settlement with MoneyLion to resolve allegations that the company overcharged military members and their families on loans, including fees and interest rates that exceeded the legal 36% cap set by the Military Lending Act. This settlement, which primarily benefits borrowers who took out loans from December 1, 2017, to October 11, 2024, may be among the agency’s final enforcement actions as it significantly winds down its operations due to funding constraints and a shift in approach under the current administration.​

Settlement Details

• MoneyLion faced allegations dating back to a CFPB lawsuit filed in September 2022 during the Biden administration, accusing it of charging excessive combined fees and interest to active-duty service members and their families.

• Borrowers will be compensated on a pro rata basis from the $1.75 million settlement fund.

• As part of the agreement, MoneyLion must allow borrowers to cancel their memberships even if they have outstanding loan balances or fees.

• MoneyLion did not admit wrongdoing as part of the settlement and stated its intent to focus on supporting Americans’ financial well-being moving forward.​

Broader Context: CFPB Enforcement Winds Down

• This action marks a shift as the CFPB, once aggressive in enforcement, is now scaling back due to budget cuts and changes in priorities under the Trump administration.

• Most CFPB operations and new enforcement activity have been suspended, and the bureau is transferring any remaining litigation to the Department of Justice.​

Implications

• Analysts see this case as a significant marker of the CFPB’s transition away from broad supervision and enforcement, reflecting a broader trend among federal regulators in late 2025.

• For affected military service members, the settlement provides direct restitution and new rights concerning the cancellation of MoneyLion memberships linked to loan products.​

This settlement underscores the agency’s historical focus on military lending protections and its rapidly contracting enforcement presence in the financial sector.

CFPB enforcement is now expected to be far more limited going forward, with most new investigations and actions paused due to funding cuts and organizational shifts under the current administration. The bureau is transferring any active or unfinished litigation to the Department of Justice, signaling a substantial reduction in its independent oversight and regulatory activity.​

Impact on CFPB Activities

• The CFPB has largely halted initiating new enforcement cases and is focusing on wrapping up existing matters.

• Resource constraints and evolving priorities have led to a reduced role for the agency in financial consumer protection.​

Future Enforcement Landscape

• Key enforcement and supervisory powers of the CFPB may remain dormant unless Congress restores funding or the administration’s priorities change.

• Active monitoring and prosecution of violations are now expected to rely more on other federal bodies, such as the Department of Justice.​

Implications for Financial Industry

• Financial firms could face less aggressive oversight in the immediate future, especially around consumer lending and military lending protections.

• The agency’s scaled-back involvement may alter the deterrent effect that robust CFPB enforcement previously provided.​

In summary, the CFPB’s ability to police the financial sector is significantly diminished for now, with future enforcement contingent on political and legislative decisions.​