FloatMe Corp.
In January 2024, the FTC brought a complaint against FloatMe, a fintech company providing subscription-based cash advance services. The allegations included deceptive practices in marketing and enrollment, problematic subscription cancellation processes, and violations of the Equal Credit Opportunity Act (ECOA) through discrimination against consumers receiving public assistance income. While the action was brought by the FTC rather than a banking regulator, it is relevant to the BaaS ecosystem as FloatMe's cash advance products likely rely on bank partnerships for origination and fund disbursement. The identity of any sponsor bank involved was not disclosed in the source material.
Verified from source: On January 2, 2024, the FTC filed a complaint against FloatMe Corp., a fintech offering short-term cash advances via mobile app, alleging violations of the FTC Act, ROSCA, and ECOA, including deceptive subscription practices, hidden fees, charging without consent, difficult cancellation, and discriminating against applicants whose income derived from public assistance programs.
- FTC enforcement against fintechs for ECOA violations could create downstream risk for sponsor banks originating loans or facilitating cash advances
- BaaS partner banks should monitor fintech partners for fair lending and deceptive practices compliance to avoid indirect regulatory exposure
- Signals increased federal attention on subscription-based fintech products that may rely on banking infrastructure