Baltimore Sues Fintech For Alleged Unfair And Deceptive Cash-Advance Practices

Baltimore has filed a civil lawsuit against fintech company Dave, Inc. over its “ExtraCash” cash‑advance product, accusing the firm of unfair, deceptive, and usurious lending practices that allegedly trap low‑income residents in cycles of debt. The city brings the case under Baltimore’s Consumer Protection Ordinance and is seeking to stop the product locally and obtain refunds and other relief for affected consumers.​

What the lawsuit is about

• The complaint targets Dave’s “ExtraCash” advances, a small‑dollar cash‑advance feature marketed as earned‑wage access or overdraft/low‑balance protection rather than as high‑cost loans.​

• Baltimore alleges these advances function like payday loans, with high and often hidden costs that exceed Maryland’s 33% interest‑rate cap for consumer loans.​

Key allegations against Dave

• Misleading marketing: The city claims Dave represents ExtraCash as a low‑cost way to get “up to $500 in five minutes or less,” even though only about 1 in 10,000 consumers actually obtained the full $500 advance.​

• Usurious pricing: Fees and “tips” allegedly combine to yield effective APRs “tens or hundreds of times” above Maryland’s 33% cap; one example cited is a roughly 2,500% APR on a $40 advance once overdraft, membership, and express fees are included.​

How the product allegedly works

• The city says most users receive frequent, small‑amount, short‑term advances, not the large amounts marketed, which makes fixed fees very expensive in percentage terms.​

• Mandatory overdraft‑style fees (about 5% of principal, typically $5–$15), monthly membership charges, and optional‑but‑pressured “tips” together allegedly turn what is presented as a service into a high‑cost loan.​

Alleged harm to consumers

• Baltimore alleges Dave’s design and marketing push financially vulnerable residents into repeatedly taking new advances—sometimes multiple times in two weeks—resulting in an exploitative cycle of debt.​

• The city also claims consumers were misled into tipping under the impression they were helping feed hungry children, while only a small portion of these funds actually went to charity.​

What Baltimore is seeking

• The lawsuit asks the court to declare Dave’s practices unlawful under the city’s Consumer Protection Ordinance and to enjoin (stop) the ExtraCash product in Baltimore.​

• The city also seeks restitution and refunds of principal, fees, and tips for affected residents, along with changes to how cash‑advance products are structured and marketed.​