A new class action lawsuit accuses Intuit, TurboTax, Credit Karma and four partner banks of charging “0% interest” to active-duty military borrowers who repay loan advances that exceed the legal limit under the Military Loan Act.
Case, Bostick v. Intuit Inc.The suit was filed in the U.S. District Court for the Southern District of California on March 31, 2026 (Case No. 3:26-cv-01444).
why it matters: The Military Loan Act limits the Military Annual Percentage Rate (MAPR) to 36% for active-duty service members and their dependents. That limit doesn’t just cover the stated interest rate – it also includes fees, required insurance premiums and most other charges associated with the loan. A product advertised as “no interest” or “0% interest” may still exceed the 36% limit if the fee is large enough relative to the loan amount and repayment window.
Plaintiff Zachary Bostick alleges that TurboTax’s Refund Advance product had exactly the same mandatory fees built into it. The complaint also claims that Intuit asked borrowers to waive their right to sue, which is itself a separate MLA violation.
Big picture: It is the second major tax-refund-advance lawsuit targeting military borrowers in about six weeks. An almost similar case was reported at H&R Block in February 2026 (Montgomery v. HRB Tax GroupCase No. 3:26-cv-00759, SD Cal.). Both lawsuits name tax preparation companies as well as participating banks, and both argue the same thing: Fees that appear small in dollar terms become illegally high when annualized over the short term of the refund advance loan.
The defendants in the Intuit case include Intuit TT Offerings Inc., CK Progress Inc. (d/b/a Credit Karma), MVB Bank, First Century Bank, Santa Barbara Tax Products Group and Green Dot Bank.
What will happen next: The matter is in the initial stage. There is no settlement, no certified classes, and no payment deadlines. If you are active-duty or were at the time you took the TurboTax or Credit Karma refund advance, the most important thing to do right now is save your paperwork as proof in case you need it: loan agreement, fee disclosure, and proof of military status (LES or ORDER) for each tax year you used the product.
Don’t pay anyone to “get involved” in a lawsuit. Legitimate class activities never charge service members a sign-up fee. If someone contacts you and asks for money, it is a scam.
How it connects: College Investor has long covered tax refund advance loans, including the TurboTax product at the center of this lawsuit. These products are marketed as free and fast, but the fee structure can be opaque – especially to borrowers who never see the fee as a separate line item because the cost is deducted before the refund arrives in their account.
Military borrowers also face unique financial pressures, which we’ve covered in our student loan assistance for reporting military borrowers.
It’s important to remember that tax refund advances should be a last resort, and most borrowers get their tax refund within 21 days. Additionally, you may adjust your tax withholding to avoid getting a refund, making all your paychecks larger throughout the year.
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