A dispute between the city of Baltimore and Dave Inc. (Dave) raises questions about the scope of local consumer-protection authority and its relationship to Maryland’s statewide consumer-lending framework. Dave has moved to dismiss Baltimore’s lawsuit concerning the company’s “ExtraCash” advances, contending that the city lacks authority to invoke the ordinance underlying its claims because Maryland’s consumer-loan laws preempt Baltimore’s consumer protection ordinance. Dave characterizes ExtraCash as a bank-originated overdraft product, rather than as an earned wage access product, although it is sometimes incorrectly grouped with earned wage access apps.
The dispute presents a question of significance to lenders and financial technology companies operating in Maryland: whether Baltimore may invoke a local ordinance to enforce consumer-protection requirements or whether the state’s consumer-loan laws preempt Baltimore. The court has not ruled on Dave’s motion.