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New York's Attorney General has sued arbitration platform Rapid Ruling for allegedly rigging outcomes in favor of merchant cash advance lenders — the latest sign of intensifying scrutiny on MCA collections, SBA refinancing rules, and rising bankruptcy-stacking risk for small businesses.
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No single MCA story broke in the past 24 hours, but the industry's regulatory squeeze kept tightening this summer, and the details are worth a closer look.
Here's where things stand.
New York Sues "Sham" Arbitration Platform Over MCA Collections On June 8, 2026, New York Attorney General Letitia James sued Rapid Ruling, an online arbitration platform, along with its founders Zachary Meyer and Andrew Sachs.
The lawsuit alleges Rapid Ruling presented itself as a neutral arbitration forum while it was actually created in coordination with a merchant cash advance company, which helped write arbitration rules that favored MCA funders in disputes with small businesses.
According to the Attorney General's office, its investigation found that 97 percent of the roughly 3,000 arbitrations Rapid Ruling administered in its first three years took place without any appearance by the small business on the other side — meaning funders routinely won default-style rulings against merchants who had no real chance to contest the claims against them.
The suit seeks restitution for affected businesses, damages, civil penalties, and a court order barring Rapid Ruling, Sachs, and Meyer from continuing the practice.
It follows New York's $1.065 billion settlement with Yellowstone Capital, one of the largest enforcement actions ever brought against the MCA industry, and signals that the state intends to keep targeting not just funders but the collection infrastructure — arbitration providers, confession-of-judgment filings, and similar mechanisms — that funders rely on to enforce advances.
SBA Refinancing Ban and Senate Pressure Add to the Squeeze Separately, small business advocates in Congress are pushing back on a 2025 Small Business Administration policy that bars merchants from using SBA 7(a) loans to refinance out of merchant cash advance or factoring debt.