On August 8, a judge in the U.S. District Court for the District of Maryland granted in part and denied in part a motion to dismiss several claims against an earned wage access (EWA) provider, addressing whether its wage advance product was subject to state and federal lending laws. The plaintiffs alleged that the provider’s product: (i) constituted unlicensed lending and exceeded interest rate limits in violation of the Maryland Consumer Loan Law (MCLL), (ii) violated the Maryland Consumer Protection Act (MCPA) by collecting payments on advances they argued were void under state lending law, and (iii) failed to provide required consumer disclosures under TILA.
The court found that the plaintiffs sufficiently alleged the EWA product operated as a loan subject to MCLL licensing and interest limitations. The decision noted that the provider’s practice of advancing wages with an expectation of repayment, combined with associated fees and tips, could fall within the scope of Maryland’s lending regulations. The court also concluded the plaintiffs plausibly alleged that wage advances may constitute “credit” under TILA, which allowed claims related to federal disclosure requirements to proceed.

However, the court dismissed claims under the MCPA, concluding the plaintiffs did not sufficiently allege reliance on misrepresentations. The case will proceed on the remaining MCLL and TILA claims.