Virginia Attorney General Mark R. Herring announced today that more than $2.7 million in relief will be provided to Virginia consumers who took out loans with Internet lender MoneyLion of Virginia LLC — an affiliate of New York based Internet lender MoneyLion, Inc.
Herring’s settlement with MoneyLion will provide refunds and debt forgiveness to 3,800 consumers as a result of the company’s alleged violations of the Virginia Consumer Protection Act. Since creating a Predatory Lending Unit in his Consumer Protection Section, Herring’s Office has recovered more than $25 million in restitution and debt forgiveness for Virginia consumers from online lenders.
“As more Virginians turn to online lenders for small loans, they need to understand that these loans can be just as risky and predatory as a payday loan or auto title loan they might get at a brick-and-mortar store,” said Herring. “My Predatory Lending Unit is working every day to protect Virginia borrowers from deceptive and unlawful practices, but it’s just as important that consumers really take the time to consider all their options and any terms and conditions before taking out one of these loans. This settlement with MoneyLion is going to save Virginia borrowers nearly $3 million and send a strong message to online lenders that we are watching them closely.”
Attorney General Herring’s complaint alleges that:
- From January 2017 through July 2017, MoneyLion offered closed-end, installment loans over the internet and falsely claimed that it was licensed in Virginia to do so;
- MoneyLion’s loan agreements falsely stated that MoneyLion was licensed by Virginia’s Bureau of Financial Institutions;
- MoneyLion charged Virginia consumers annual interest rates as high as 359% APR, but was never licensed by BFI and did not qualify for any exception to Virginia’s 12% interest cap; and
- MoneyLion charged Virginians an unlawful “$15 check processing fee” for payments made by check on closed-end, installment loans.
The settlement includes the following key terms relating to loans made by MoneyLion during the period in question:
- MoneyLion agrees to provide $359,811.50 in refunds to 1,161 Virginia consumers who paid more than their loan principal plus 12% APR;
- MoneyLion agrees to give up the collection of $2,354,097.05 in illegal interest it charged on loans with 2,639 Virginia consumers;
- A payment to the Commonwealth of $10,000 as a civil penalty for MoneyLion’s alleged violations of the VCPA;
- A payment to the Commonwealth of $20,000 for its costs and fees in investigating MoneyLion’s alleged violations of the VCPA;
- Permanent injunctions preventing MoneyLion from misrepresenting its license status, allowable interest rates, and allowable fees.
The Office of the Attorney General will be monitoring MoneyLion’s compliance with the settlement to make sure it is being administered properly. Consumers who have questions about the settlement may contact MoneyLion directly at (800) 310-9440.