On October 7, the U.S. District Court for the Northern District of California denied a fintech company’s motion to compel arbitration and stay litigation in a putative class action, for allegedly violating federal and Georgia laws related to earned wage access products. In March 2025, a Georgia resident serving in the U.S. Navy filed a putative class action in the California Superior Court for the County of San Francisco and alleged that the fintech charges fees that violate the Military Lending Act (MLA) and TILA, and that the arbitration agreement in the terms of service was unenforceable under the MLA. The court determined the fintech’s product “extended consumer credit” under the MLA and, therefore, the arbitration agreement could not be enforced.

The fintech charged two types of fees. First, users were obliged to pay a subscription fee of $8 per month to use the company’s mobile application. Second, cash advance users were able to choose to pay an “instant” delivery fee to receive the advance in minutes (as opposed to one day). The court found that the “instant” transfer fee charged was a finance charge under TILA, making the provider a creditor under the MLA. Because the MLA prohibits creditors from requiring covered borrowers to submit to arbitration, the court denied the motion to compel arbitration of the plaintiffs’ TILA and Georgia lending claims.