Baltimore, January 3, 2026
Mayor Brandon Scott of Baltimore has filed a lawsuit against the fintech company Dave, citing excessive fees associated with its financial products. The lawsuit alleges that these fees result in an exploitative cycle of debt for consumers, particularly targeting the vulnerable population in the city. Key accusations include misleading marketing practices and usurious interest rates, with APRs allegedly exceeding legal limits. The outcome of this legal action could significantly influence regulations within the fintech industry.
Baltimore’s Mayor Takes Legal Action Against Fintech Company Dave
Baltimore, Maryland – Mayor Brandon Scott has initiated legal action against the fintech company Dave, alleging that its financial products impose excessive fees on consumers, leading to an “exploitative cycle of debt.” The lawsuit targets Dave’s ExtraCash Advances, which are marketed as providing “Up to $500 in five minutes or less.”
Details of the Lawsuit
The lawsuit accuses Dave of misleading marketing and charging usurious interest rates that entrap financially vulnerable residents. Key points include:
- Overdraft Fees: Dave charges mandatory overdraft fees of 5% of a loan’s principal, with a minimum of $5 and a maximum of $15 per transaction.
- Express Processing Fees: Customers opting for immediate loan processing are charged an express fee.
- Membership Fees: A $1 monthly membership fee is required.
For example, a $40 cash advance repaid within three days would incur a $5 overdraft fee, a $0.60 express processing fee, and a $3 membership fee, resulting in an annual percentage rate (APR) exceeding 2,500%. This rate is significantly higher than Maryland’s legal limit of 33% for consumer loans.
Consumer Impact
The lawsuit highlights that such fees can trap consumers in a cycle of debt, making it increasingly difficult to afford essential expenses like utility bills, rent, and food.
Dave’s Response
A spokesperson for Dave stated that the company is reviewing the lawsuit and believes its practices comply with applicable laws.
Background on Dave’s Business Practices
Dave, a Los Angeles-based fintech company, offers financial products designed to provide quick access to funds. However, its business model has faced scrutiny for charging fees that result in high APRs, leading to concerns about the affordability and transparency of its services.
Previous Legal Actions
In October 2025, Baltimore filed a similar lawsuit against MoneyLion Technologies Inc., accusing the company of operating a digital-age payday lending scheme with misleading marketing and usurious interest charges.
Conclusion
The outcome of this lawsuit could have significant implications for the fintech industry, particularly concerning the regulation of fees and consumer protection in digital financial services.
Frequently Asked Questions (FAQ)
What is the lawsuit against Dave about?
The lawsuit alleges that Dave’s financial products impose excessive fees on consumers, leading to an “exploitative cycle of debt.
What are the specific fees charged by Dave?
Dave charges mandatory overdraft fees, express processing fees for immediate loan processing, and a monthly membership fee.
How do these fees affect consumers?
These fees can result in annual percentage rates (APRs) significantly higher than Maryland’s legal limit of 33% for consumer loans, potentially trapping consumers in a cycle of debt.
What is Dave’s response to the lawsuit?
Dave stated that it is reviewing the lawsuit and believes its practices comply with applicable laws.
Has Dave faced similar legal actions before?
Yes, in October 2025, Baltimore filed a similar lawsuit against MoneyLion Technologies Inc., accusing the company of operating a digital-age payday lending scheme with misleading marketing and usurious interest charges.
Key Features of the Lawsuit Against Dave
| Feature | Description |
|---|---|
| Defendant | Dave, a Los Angeles-based fintech company |
| Allegations | Misleading marketing and usurious interest charges leading to an exploitative cycle of debt |
| Specific Fees | Mandatory overdraft fees, express processing fees, and a monthly membership fee |
| Consumer Impact | Potentially traps consumers in a cycle of debt with APRs exceeding 2,500% |
| Dave’s Response | Reviewing the lawsuit; believes practices comply with applicable laws |
| Previous Legal Actions | Similar lawsuit filed against MoneyLion Technologies Inc. in October 2025 |
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Author: STAFF HERE BALTIMORE WRITER
The BALTIMORE STAFF WRITER represents the experienced team at HEREBaltimore.com, your go-to source for actionable local news and information in Baltimore, Baltimore County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Baltimore Book Festival, Preakness Stakes, and Artscape. Our coverage extends to key organizations like the Baltimore Chamber of Commerce and Visit Baltimore, plus leading businesses in shipping and healthcare that power the local economy such as the Port of Baltimore and Johns Hopkins Medicine. As part of the broader HERE network, we provide comprehensive, credible insights into Maryland's dynamic landscape.
