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The CFPB's revised Section 1071 rule, published May 1, officially locks merchant cash advances out of federal small business lending data requirements — while Illinois, New Jersey, and Connecticut push new state-level MCA protections in 2026.
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The first half of 2026 has delivered a mixed bag for the merchant cash advance industry: regulatory certainty on the federal front, continued enforcement pressure from state attorneys general, and expanding disclosure mandates that are reshaping how funders do business across the country.
CFPB's Final 1071 Rule Formally Excludes MCAs The biggest federal development of the month landed on May 1, when the CFPB published its final revised Section 1071 rule in the Federal Register.
The rule, which implements small business lending data collection requirements under the Equal Credit Opportunity Act, now formally excludes merchant cash advances — along with agricultural lending and loans under $1,000.
The Bureau's reasoning: MCAs are "structured differently from traditional lending products" and are not credit transactions, placing them outside the rule's scope.
The coverage threshold also jumped significantly, from 100 to 1,000 originations per year, meaning many smaller lenders won't need to report at all.
The rule takes effect June 30, 2026, with a compliance date of January 1, 2028.
The Revenue Based Finance Coalition (RBFC) had actively lobbied for the MCA exclusion, and trade observers note that several of the final rule's changes reflect positions the RBFC advocated.
As deBanked reported, no MCA provider will be required to collect or report 1071 data under the finalized framework.