Article summary
New York's attorney general has sued the arbitration platform Rapid Ruling, alleging it was built by a merchant cash advance funder to guarantee wins against small businesses — one piece of a widening split between aggressive state enforcement and a retreating federal regulator.
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No single MCA story broke in the last 24 hours, but the last few weeks have sharpened a trend worth tracking closely: state regulators are escalating enforcement against the industry's collection tactics even as federal oversight retreats, while bankruptcy courts keep encountering MCA debt as a recurring feature of small-business collapse.
Here's where things stand.
New York AG Sues "Rapid Ruling" Over Allegedly Rigged Arbitration New York Attorney General Letitia James has sued the online arbitration platform Rapid Ruling and its founders, Zachary Meyer and Andrew Sachs, alleging they marketed the service as a neutral forum for resolving merchant cash advance disputes while secretly designing its rules, in coordination with an MCA company, to favor funders.
The Office of the Attorney General's investigation found that in Rapid Ruling's first three years of operation, roughly 97 percent of its approximately 3,000 arbitrations proceeded without any appearance by the small business being sued, and arbitrators routinely rejected merchants' defenses while awarding funders the fees and relief they requested.
The suit seeks to shut down Rapid Ruling's arbitration business and secure restitution, damages, and civil penalties.
It follows the same office's $1 billion settlement with Yellowstone Capital and an ongoing suit against Yellowstone's rebranded successor, Delta Bridge/Cloudfund, whose motion to dismiss the AG's claims was denied earlier this year.
MCA Debt Keeps Showing Up in Small-Business Bankruptcies Separately, bankruptcy filings that list merchant cash advance funders as major creditors continued climbing into 2026, after bankruptcy cases involving MCA debt surged in 2023 and peaked with over 230 filings the following year.
Attorneys tracking the cases describe a now-familiar pattern: businesses take on multiple stacked advances to keep up with daily or weekly debits from earlier ones, and the resulting cash squeeze becomes the trigger for a Chapter 11 filing that lists a dozen or more MCA creditors at once.