Got a Cash App Borrow Settlement Notice? Here's What the Military Lending Act Says
Block will pay $615,000 to settle claims Cash App Borrow loans broke the 36% military rate cap. Here's who's in, what you get, and your deadlines.
You borrowed a little money through Cash App while you were on active duty. Maybe it was a couple hundred dollars to get to payday. Now an email or postcard says you’re part of a class action settlement, and you’re wondering if it’s real and if it’s worth anything.
It’s real. It won’t make you rich. But it does show you a federal protection that a lot of servicemembers and their families don’t know they have.
What happened
The case is Bailey v. Block, Inc., et al., No. 4:25-cv-5625, in the U.S. District Court for the Northern District of California. A borrower named Bradley Bailey sued Block, Inc., the company behind Cash App, along with Square Financial Services and First Electronic Bank, the two banks that made the Cash App Borrow loans.
He alleged two things. First, that the loans cost covered borrowers more than the 36% rate cap in the Military Lending Act. Second, that the loans used a “method of access” to borrowers’ bank accounts as security, which the same law forbids. The suit also made claims under Georgia’s payday lending law for Georgia residents.
The companies deny all of it. The court has not found that anyone broke the law. The two sides reached a deal in principle at a mediation on November 5, 2025, and the court has preliminarily approved it. Notices went out on October 26, 2026.
What the settlement pays
Block will put $615,000 into a settlement fund. From that, the lawyers can ask for up to 25% in fees ($153,750), up to $25,000 in expenses, and up to a $5,000 award for Bailey. Administration costs also come out of the fund. What’s left is split among class members.
The estimate is about $58.95 for each eligible loan. If you took out three qualifying loans, that’s roughly $177.
Here’s the math nobody puts on the postcard. Fees, expenses and the service award alone can take up to $183,750. That’s about 30 cents of every dollar before a servicemember sees a dime. And the law sets a floor of $500 per violation if you sue and win, under 10 U.S.C. § 987(f)(5)(A). So $58.95 is roughly 12% of that floor. That’s not a reason to call the deal bad. A settlement trades a smaller sure payment for skipping years of risk. But you should know what you’re trading.
You’re in the class if, as of May 28, 2025, you got a Cash App Borrow loan while you were a “covered borrower” under the Military Lending Act and the loan’s Military Annual Percentage Rate was over 36%.
What the law actually says
The Military Lending Act, or MLA, is at 10 U.S.C. § 987. It covers active-duty servicemembers, Guard and Reserve on active duty, and their dependents, which includes spouses.
The 36% cap. Section 987(b) says a lender can’t charge a covered borrower more than a 36% annual rate. The rule that carries it out, 32 C.F.R. § 232.4, measures that with something called the Military Annual Percentage Rate, or MAPR. The MAPR is the true yearly cost of the loan. It counts finance charges, application fees, participation fees, credit insurance and add-on products, not just the interest rate.
That’s what catches small flat-fee loans. Here’s my own example, not a number from the case: say an app charges a flat $10 to borrow $200 for four weeks. That’s 5% for four weeks. A year has 13 four-week periods, so the yearly rate works out to about 65%. A fee that looks tiny can still blow past 36%.
No pulling straight from your account. Section 987(e)(5) makes it unlawful to use a check or “other method of access” to your bank account as security for the loan. The reason is simple. A lender that can reach into your account gets paid first, ahead of rent and groceries.
Other teeth. A loan that breaks the MLA is void from the start under § 987(f)(3). Forced arbitration clauses can’t be enforced against you under § 987(f)(4). And you have a deadline to sue: the earlier of two years after you discover the violation or five years after it happened, under § 987(f)(5)(E).
Lenders have a way to check. Under 32 C.F.R. § 232.5, a lender can confirm your covered status through the Defense Department’s MLA database or through a military-status indicator on your credit report. Lenders that use those checks at the right time and keep a record get a safe harbor, meaning their check counts as conclusive.
The CFPB lists the kinds of loans the MLA covers: payday loans, deposit advances, credit cards, tax refund anticipation loans, vehicle title loans and installment loans other than auto loans. It doesn’t cover mortgages or auto loans where the lender can take the car.
What to do, free
- If you got a notice and want the money, you don’t have to do anything. There’s no claim form. A check goes to the address Cash App has on file. If you’d rather get paid electronically or you’ve moved, use the official site, BlockMLASettlement.com, or call the administrator at (833) 417-4917.
- Cash the check fast. The settlement agreement says checks are good for 60 days and can be canceled after that. If you PCS before the money comes, update your address.
- Decide by January 25, 2027 if you want out. That’s the opt-out deadline. Opting out means no settlement payment, but you keep your right to sue on your own. If you think your losses were bigger than about $59 a loan, talk to your base legal assistance office before that date. It’s free. You can find one at legalassistance.law.af.mil.
- Object by February 1, 2027 if you think the deal is unfair. You stay in the class. The final hearing is March 23, 2027.
- Watch for fakes. The real settlement doesn’t ask for a claim form or any payment. If someone calls, texts or messages you asking for a fee, your Cash App login or your bank details to “release” your money, it’s not the administrator. Type the website address yourself instead of tapping a link.
- Report other lenders. If a different app or lender charged you more than 36% while you were covered, you can file a complaint with the CFPB at consumerfinance.gov/complaint or call (855) 411-2372.
This is education, not legal advice. Payments and outcomes depend on the court’s final decision, and results vary.
The bigger lesson isn’t about Cash App. Any small-dollar loan, cash advance or “membership” you used while on orders has to fit under 36% once you count the fees. Most people never run that number. Now you know how. If you want help working through one, bring it to our free community on Skool.
Sources
- Bailey v. Block, Inc., et al. Class Action Settlement — Settlement website (Simpluris, settlement administrator), read 2026-10-31
- Long-Form Class Notice, Bailey v. Block Inc., No. 4:25-cv-5625 — Authorized by the U.S. District Court for the Northern District of California, 2026
- Class Action Settlement Agreement and Release, Bailey v. Block Inc. — U.S. District Court for the Northern District of California, signed February–March 2026
- 10 U.S. Code § 987 — Legal Information Institute, Cornell Law School
- 32 CFR § 232.4 and § 232.5 — Legal Information Institute, Cornell Law School
- What are my rights under the Military Lending Act? — Consumer Financial Protection Bureau, page last modified 2025-09-08
