On December 30, Baltimore Mayor Brandon M. Scott announced that the City of Baltimore filed a civil action against a fintech provider offering small-dollar cash advance products, alleging violations of the Baltimore Consumer Protection Ordinance. According to the City, the fintech’s cash-advance product that was promoted as an earned wage access or overdraft-style service but allegedly imposed costs that far exceeded Maryland’s 33 percent interest-rate cap for consumer loans.
Baltimore officials allege that the challenged product consists of high-frequency, small-amount, short-term advances marketed as low-cost liquidity for financially vulnerable consumers. The City asserts that the product’s structure and fee model obscured its true cost and resulted in an exploitative cycle of debt for users…