Baltimore, January 8, 2026

The City of Baltimore has initiated a lawsuit against fintech firm Dave Inc., alleging misleading marketing practices and exploitative interest rates through its ExtraCash Advances. Mayor Brandon M. Scott highlighted the legal action’s aim to protect vulnerable residents from predatory financial practices. The lawsuit reportedly claims Dave’s fees far exceed the legal cap, trapping users in a cycle of debt. This case follows similar actions against other fintechs, emphasizing the need for stricter regulations in the industry.

Baltimore Sues Fintech Dave Over Cash Advance Product

Baltimore, Maryland – The City of Baltimore has filed a lawsuit against fintech company Dave Inc., alleging that the company engaged in misleading marketing and imposed usurious interest charges through its ExtraCash Advances, thereby trapping financially vulnerable residents in cycles of debt. Mayor Brandon M. Scott announced the legal action on January 7, 2026, emphasizing the city’s commitment to protecting consumers from exploitative financial practices.

Allegations Against Dave Inc.

The lawsuit accuses Dave Inc. of violating Baltimore’s Consumer Protection Ordinance by promoting its ExtraCash Advances as “earned wage access” or “overdraft services,” despite these advances not providing overdraft protection and carrying steep fees. The city contends that Dave’s business practices are intentionally designed to entrap individuals in cycles of debt, which is both unfair and illegal. The complaint highlights that Dave’s annual percentage rates (APRs) are routinely tens or hundreds of times higher than the maximum 33% interest rate allowed for consumer loans under Maryland law. For instance, on a $40 cash advance, Dave would charge a minimum $5 overdraft fee, an “express processing fee” of $0.60, and a $3 membership fee, resulting in an APR of 2,500%. Additionally, the lawsuit alleges that Dave manipulated and deceived customers into providing “tips,” which were framed as donations to help hungry children, but little of the money went toward charity. The city also claims that Dave’s marketing misrepresented the amount of cash advances, advertising “up to $500 in five minutes or less,” while only a small fraction of consumers received the full amount. The lawsuit further alleges that Dave’s business model encouraged customers to take out multiple advances in as few as two weeks, exacerbating their financial difficulties.

Background on Previous Actions

This legal action follows a similar lawsuit filed by Baltimore against MoneyLion Technologies Inc. in October 2025. In that case, the city accused MoneyLion of operating as a “modern-day payday lender” by charging exorbitant interest on loans it advertised as zero-interest. The Federal Trade Commission (FTC) has also taken action against Dave Inc., referring its case to the U.S. Department of Justice (DOJ) in December 2024. The FTC alleged that Dave used misleading marketing to deceive consumers about the amount of its cash advances, charged undisclosed fees, and imposed “tips” without consumer consent. The DOJ filed an amended complaint in the case, naming Dave CEO Jason Wilk as a defendant and seeking civil penalties.

Dave Inc.’s Response

In response to the lawsuit, a Dave spokesperson characterized the legal action as “baseless.” The company has previously stated its commitment to transparency and compliance with applicable laws. Dave has also made changes to its fee structure, eliminating optional tips and express fees on its ExtraCash product.

Implications for Consumers

The outcome of this lawsuit could have significant implications for consumers using cash advance products. If the court finds in favor of Baltimore, Dave may be required to halt its ExtraCash product, refund any tips, principal, and fees to affected consumers, and change how it markets cash-advance products. This case underscores the growing scrutiny of fintech companies and their lending practices, particularly concerning the transparency of fees and the potential for consumers to become trapped in cycles of debt.

Conclusion

The City of Baltimore’s lawsuit against Dave Inc. highlights the ongoing efforts to regulate fintech companies and protect consumers from potentially exploitative financial products. As the case progresses, it will be important to monitor developments and consider the broader implications for the fintech industry and consumer protection laws.

Frequently Asked Questions (FAQ)

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Key Features of the Lawsuit Against Dave Inc.

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