Baltimore Mayor Sues Fintech Dave For ‘Usurious’ Fees

Baltimore Mayor Brandon Scott has filed a lawsuit on behalf of the City of Baltimore against fintech company Dave, Inc., alleging deceptive marketing and “usurious” fees tied to its ExtraCash cash‑advance product. The suit claims Dave’s charges effectively turn small, short‑term advances into illegal high‑interest loans that violate Maryland’s rate cap and Baltimore’s consumer‑protection laws.​

What the lawsuit alleges

• Dave’s “ExtraCash” advances are marketed as earned wage access or overdraft/low-balance protection, but function like high-cost payday loans instead.​

• The city says Dave violated Baltimore’s Consumer Protection Ordinance by misleading residents about the nature and cost of these advances.​

• According to the complaint, combined fees and charges can produce effective annual percentage rates far above Maryland’s 33% cap on consumer loans, in some examples allegedly reaching into the hundreds or even thousands of percent.​

Specific practices called out

• Fixed “overdraft-style” fees on very small advances (for example, a minimum fee on a $25–$40 advance), plus express-delivery fees and a monthly subscription, are alleged to push the APR to levels the city calls usurious.​

• Dave historically encouraged “tips,” sometimes framed as helping fund meals for hungry children, but the lawsuit claims only a small share of these tip amounts went to charity while the rest effectively increased the cost of credit.​

• City lawyers argue these design choices trap cash‑strapped users in repeat borrowing cycles and increased overdraft fees, rather than providing a low-cost safety net.​

Legal basis and goals

• The case is brought under Baltimore’s local consumer‑protection ordinance and Maryland interest‑rate limits, which generally cap consumer‑loan APRs at 33%.​

• Baltimore seeks injunctive relief to stop the challenged practices, civil penalties, and monetary relief for affected residents who used Dave’s ExtraCash advances in the city.​

• City officials frame the action as part of a broader push against predatory digital lending, following a similar suit Baltimore filed against another fintech, MoneyLion, in October 2025.​

How Dave has responded and broader context

• Dave has publicly stated that it disagrees with characterizations of its fees and disclosures, and says its products comply with applicable laws while it reviews the allegations.​

• The Baltimore case comes amid wider scrutiny, including a separate federal enforcement action over Dave’s marketing and fee practices in prior years, adding to regulatory pressure on earned-wage-access and cash‑advance apps.​

• Consumer advocates argue that even small advances of $25–$100 can become very costly once recurring fees, expedited-funding charges, and tips are factored in, especially for low‑income users who borrow repeatedly.​

Why this matters

• The lawsuit could clarify whether cash‑advance and earned‑wage‑access products are treated as loans subject to state usury caps when they bundle fees and “tips.”​

• A court victory for Baltimore might force changes to how Dave and similar apps structure and market short‑term advances in Maryland and potentially influence other cities and regulators considering similar actions.​