Estimated reading time: 9 minutes.
Key facts
- What happened: A federal judge in Oakland preliminarily approved a $615,000 class action settlement on September 28, 2026 over Cash App Borrow loans that allegedly charged military borrowers more than the 36% rate cap set by the Military Lending Act.
- Who is covered: About 1,720 people who were "covered borrowers" under the Military Lending Act when they took out a Cash App Borrow loan, and whose loan's Military Annual Percentage Rate exceeded 36%. Together they took out 6,874 such loans.
- What you could get: If the deal is approved as proposed, plaintiff's counsel estimates $59.82 per eligible loan. Someone with four eligible loans would receive about $239.28.
- No claim form: Payments go out automatically by check or electronic payment. Class members do not need to file anything to be paid.
- Key dates: Notice is due by October 26, 2026. Opt-out requests must be postmarked by January 25, 2027, and objections by February 1, 2027. The final approval hearing is March 23, 2027.
- The case: Bailey v. Block Inc., et al., No. 4:25-cv-05625-YGR, U.S. District Court for the Northern District of California, before Judge Yvonne Gonzalez Rogers.
- No admission: Block, Square Financial Services and First Electronic Bank deny liability and say any violations were bona fide errors.
In this article
- What the settlement does
- What went wrong with the loans
- Who the parties are
- How the case got here
- Who qualifies and how payments work
- Timeline and next steps
- What remains unclear
- Frequently asked questions
What the settlement does
Block, Inc., which does business as Cash App, and the two banks that issued Cash App Borrow loans agreed to pay $615,000 into a common settlement fund. The other two defendants are Square Financial Services, Inc. and First Electronic Bank.
The fund is non-reversionary. None of the money goes back to the defendants, even if some checks are never cashed. The $615,000 has to cover several costs before class members are paid:
- Attorneys' fees of up to 25% of the fund, or $153,750, if the court approves them
- Litigation costs of up to $25,000
- A service award of up to $5,000 for the named plaintiff, Bradley Bailey
- Settlement administration costs, which the court's order lists at $16,017
What remains is split pro rata among class members based on how many eligible loans each one took out. The settlement includes no change to Cash App's lending practices, because plaintiff's counsel told the court Block had already fixed the problem in 2023.
Judge Yvonne Gonzalez Rogers granted preliminary approval on September 28, 2026, which allows notice to go out. Final approval will be decided after a hearing on March 23, 2027.
What went wrong with the loans
The Military Lending Act, at 10 U.S.C. § 987, protects active-duty servicemembers and certain dependents from high-cost credit. It caps the Military Annual Percentage Rate on covered consumer loans at 36%. That rate counts many fees and charges, not only interest. The law also bars lenders from using a borrower's bank account access as security for a covered loan.
According to a supplemental brief that plaintiff's counsel filed on July 23, 2026 at the court's request, Block checks a Department of Defense database to identify covered borrowers. But two programming errors between September 19, 2022 and June 12, 2023 let some loan offers go out before that check was complete. As a result, some covered borrowers obtained Borrow loans with rates above 36%. The brief says Block eliminated the errors by June 12, 2023.
The dollar amounts at the heart of the case are small. The court's order, citing the supplemental brief, says the average loan was $64.12. The average interest paid above the legal limit was $1.42 per loan. Across the whole class, borrowers paid $9,809.93 more than the law allows.
Check your email and mail before October 26 The administrator, Simpluris, is due to send notice by October 26, 2026, by email where an address is available and otherwise by first-class mail. If you used Cash App Borrow while on active duty between late 2022 and mid-2023, watch for a notice that names Bailey v. Block.
The fund is much larger than the overcharges because the Military Lending Act lets borrowers seek at least $500 per violation, plus punitive damages and attorneys' fees. Plaintiff's counsel wrote that the $615,000 fund is roughly 62 times the excess interest the class paid, and equals about 17.6% of the statutory damages available under the act.
Who the parties are
Bradley Bailey is the named plaintiff and proposed class representative. He filed the lawsuit on behalf of himself and others like him.
Block, Inc. operates Cash App, a payment app. Cash App Borrow is a short-term lending feature offered inside the app.
Square Financial Services, Inc. and First Electronic Bank are the banks named in the class definition as Cash App Borrow lenders. The supplemental brief says the 6,874 loans at issue were made by First Electronic Bank.
Class counsel named in the settlement agreement are Carney Bates & Pulliam, PLLC of Little Rock, Arkansas and Jacobson Phillips PLLC of Winter Park, Florida. Orrick, Herrington & Sutcliffe LLP represents the defendants.
How the case got here
Bailey filed the lawsuit on May 28, 2025 in Alameda County Superior Court in California. The complaint alleged violations of the Military Lending Act and the Georgia Payday Loan Act. First Electronic Bank removed the case to federal court on July 3, 2025.
The parties reached an agreement in principle at a mediation on November 5, 2025 with mediator Michelle Yoshida of Phillips ADR Enterprises. Bailey filed an unopposed motion for preliminary approval on March 13, 2026.
At a July 14, 2026 hearing, the court's order says, counsel for both sides acknowledged that their filings did not explain the basis for the settlement well enough. The judge ordered more information, which led to the July 23 supplemental brief.
The final class is limited to covered borrowers under the Military Lending Act. The court's order notes that the defendants say no at-issue loans went to Georgia residents.
The judge also warned the parties that the filings said nothing about the chosen charity, Operation Patriot Packs, beyond its nonprofit status. She expects fuller briefing before final approval, noting that Ninth Circuit law requires a "driving nexus" between the class and any charity that receives leftover funds.
Who qualifies and how payments work
The settlement class covers people who, as of May 28, 2025:
- Obtained a Cash App Borrow loan from First Electronic Bank or Square Financial Services through Block's Cash App platform
- Were covered borrowers under the Military Lending Act and its regulations when they got the loan
- Had a Military Annual Percentage Rate above 36% on that loan
The defendants identified the class from their own records, so no claim form is needed. You can see other cases currently accepting class members on our cases you can join page.
Payments are pro rata by loan. The supplemental brief estimates $59.82 for each eligible Cash App Borrow loan if the settlement is approved as proposed. It gives two examples: four eligible loans would mean $239.28 and two eligible loans would mean $119.64. A draft class notice attached to the March 2026 agreement used a slightly different estimate of $58.95 per loan. The final amount depends on the fees, costs and service award the court approves.
The court's order says that after the requested fees, costs and service award, about $431,250 would remain, an average of roughly $250 per class member.
Under the agreement, payments go out by check or electronic payment within 45 days after the settlement's Effective Date, which follows final approval. Checks expire if not cashed within 90 days. If money remains more than 150 days after the first distribution, a second pro rata payment goes to class members who cashed or deposited their first payment. If a second round would be too small to be practical, the remainder goes to Operation Patriot Packs.
You do not need to pay anyone to receive this The agreement says class members receive payment automatically. Nobody needs a lawyer, a fee or a claim service to get paid. Be wary of messages that ask for your Cash App login, PIN or card details.
Timeline and next steps
The September 28 order set these deadlines:
| Date | What happens |
|---|---|
| October 26, 2026 | Administrator sends notice to class members |
| December 21, 2026 | Fee motion and final approval motion due |
| January 25, 2027 | Opt-out requests must be postmarked |
| February 1, 2027 | Objections must be postmarked |
| March 23, 2027, 9:00 a.m. | Final approval hearing in Oakland |
To opt out, the agreement requires a signed letter mailed to the administrator. It must include your name, address, and the phone number and $Cashtag tied to your Cash App account. It must also contain this statement: "I request that I be excluded from the Settlement Class in the case of Bailey v. Block Inc., et al." People who opt out get no payment but keep any right to sue on their own.
Class members who stay in can object in writing to the court by the deadline.
Approval is not guaranteed The judge has already asked for more information once and has flagged the charity recipient as an issue for final approval. If the court denies final approval, no payments go out and the lawsuit continues.
The settlement website named in the agreement, BlockMLASettlement.com, showed only a "coming soon" page when Class Action Pulse checked on October 18, 2026.
What remains unclear
- Exact payment amounts. The $59.82 figure is counsel's estimate. It will change if the court awards less than the maximum fees or if administration costs differ.
- Whether everyone gets notice. The notice plan relies on the defendants' records. Former servicemembers who have moved may need to update their contact details once the website is live.
- The charity question. The judge has asked for more information on Operation Patriot Packs, and the parties could propose a different recipient.
This article is for information only and is not legal advice. Servicemembers with questions about their rights can contact a military legal assistance office or a licensed attorney.
Frequently asked questions
Who qualifies for the Cash App Borrow military settlement?
You qualify if, as of May 28, 2025, you had taken out 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 above 36%. Covered borrowers generally include active-duty servicemembers and certain dependents. The defendants identified about 1,720 people who fit.
How much will I get?
Plaintiff's counsel estimates $59.82 for each eligible loan if the settlement is approved as proposed. Someone with two eligible loans would get about $119.64, and someone with four would get about $239.28. The final amount depends on court-approved fees and costs.
Do I need to file a claim?
No. Payments are sent automatically by check or electronic payment to class members who do not opt out. You may want to make sure the administrator has your current contact information once the settlement website goes live.
When will payments be sent?
Not before the court grants final approval. The final hearing is March 23, 2027. Under the agreement, payments go out within 45 days after the settlement's Effective Date, which depends on final approval and the end of any appeal period.
Did Cash App admit wrongdoing?
No. The defendants deny liability. They say they keep procedures designed to prevent Military Lending Act errors and that the 2022 to 2023 problems were bona fide errors, which they argue is a complete defense.
Is this the same as the $15 million Cash App settlement?
No. The $15 million Salinas v. Block settlement involved data security incidents and unauthorized transactions. Its claim deadline passed on November 18, 2024, and its website says payments to approved claims are going out in October 2026. The Bailey settlement covers only military borrowers who were charged above the 36% cap on Cash App Borrow loans.