Baltimore Sues Fintech Dave Over Alleged Predatory Lending

Baltimore moved to hold a national fintech company accountable when the city filed a lawsuit on Dec. 30 against Dave, Inc., alleging the company violated the Baltimore Consumer Protection Ordinance by manipulating residents into taking high-cost, short-term loans known as ExtraCash Advances. The suit was brought by the Mayor and City Council, represented by the Baltimore City Department of Law and Berger Montague.

City leaders framed the case as protection for residents most at risk of financial exploitation. "This lawsuit, like others we've filed, is about protecting Baltimore residents, especially those most vulnerable to financial scams," Mayor Brandon M. Scott said. "Dave's business practices are intentionally designed to trap individuals in cycles of debt. It's not just unfair; it's illegal, and we're committed to holding them accountable for the damage they've caused." City Solicitor Ebony M. Thompson added that her office would act to protect consumers being exploited.

The complaint alleges Dave marketed ExtraCash Advances as earned wage access or overdraft services while charging overdraft-style fees that do not provide overdraft protection. The suit also accuses the company of soliciting "tips" to fund meals for hungry children while passing only pennies on the dollar to charitable efforts. Taken together, the city says Dave routinely charges more than 10 times the maximum annual percentage rate allowed for consumer loans in Maryland, which is 33 percent.

Baltimore framed the action as part of a broader push to rein in predatory fintech. The lawsuit follows the city's Oct. 1, 2025 action against MoneyLion and relies on research showing how similar apps can trigger recurring overdraft fees and repeat borrowing. A recent study by the Center for Responsible Lending found that consumers using apps like MoneyLion and Dave experience increases in overdraft fees after taking a first loan, and nearly three-quarters of users take out more than one loan within a two-week period. Borrowing small amounts - $25, $50, or $100 - can therefore produce disproportionately large costs for borrowers.

James Hannaway of Berger Montague framed the legal theory in terms of disclosure and interest: "Dave has concealed the true nature of its product to charge consumers astounding interest," he said.

For Baltimore residents, the suit underscores the local stakes of national fintech practices. Many households that rely on small-dollar advances face tight budgets and limited access to affordable credit; escalating fees and repeated borrowing can worsen financial instability. The case could lead to changes in how fintech companies present short-term loan products to Baltimore customers and to potential financial remedies if the court finds the city’s allegations proven.

The Baltimore City press office can be reached at press@baltimorecity.gov for further information about the filing and next steps.