CFPB 1071 Rule Excludes MCA Transactions From Small-Business Lending Data Reporting

Three threads matter for merchant cash advances right now, and they are not the same story. At the federal level, the CFPB's revised Section 1071 rule excludes MCA transactions from small-business lending data collection and reporting. That is a reporting-rule change, not a finding that MCAs are outside all federal oversight. Separately, Colorado is fighting a bank rate-cap case in the Tenth Circuit, and New York has amended its business-practices statute. Here's where each thread stands. (Updated November 2026.)

CFPB Section 1071: MCA Transactions Excluded From Data Reporting

In its 2023 Section 1071 rule, the Consumer Financial Protection Bureau concluded that "credit" under the Equal Credit Opportunity Act encompasses merchant cash advances, which brought MCAs into the rule's small-business lending data collection requirements. The CFPB's revised Section 1071 rule, published in the Federal Register on May 1, 2026, adds MCAs to the list of excluded transactions, so they are not covered by the data collection and reporting requirements. The rule takes effect June 30, 2026, with a compliance date of January 1, 2028.

The Bureau stopped short of declaring that MCAs are not credit. Instead, it said it erred in 2023 by concluding that all MCAs are credit, because MCA terms and features vary across the market, and it said it will take an approach similar to the one it uses for leases and monitor the market for these products.

Colorado's Rate-Cap Fight Isn't Settled — The Full Tenth Circuit Is Rehearing It

The Colorado case is about banks, not MCAs. In 2023, Colorado opted out of a federal law (Section 521 of DIDMCA) that lets state-chartered banks charge the interest rates allowed in their home states, for consumer credit transactions in Colorado. Bank trade groups sued in National Association of Industrial Bankers v. Weiser, and in 2024 a federal district court issued a preliminary injunction blocking Colorado from enforcing its interest-rate limits on loans made by the groups' members.

On November 10, 2025, a three-judge Tenth Circuit panel reversed that decision 2–1, holding that Colorado's opt-out could reach loans made to Colorado residents by out-of-state state-chartered banks.

That panel ruling is no longer in effect. On April 2, 2026, the Tenth Circuit granted the trade groups' petition for rehearing en banc, VACATED the November 10, 2025 judgment, stayed the mandate, and reopened the case. Because the panel decision was vacated, the district court's preliminary injunction remains in effect, according to the Congressional Research Service. The full court heard argument on August 18, 2026. As of November 5, 2026, we have not found an en banc decision.

This case does not decide whether MCAs are loans, and Colorado's opt-out covers consumer credit. It should not be read as applying Colorado's consumer rate caps to business MCAs.

New York Amends GBL § 349 (FAIR Business Practices Act)

New York's FAIR Business Practices Act (S.8416 / Chapter 708 of the Laws of 2025), signed December 19, 2025 and effective February 17, 2026, amends General Business Law § 349. As set out in the enacted S.8416 bill text, the amended section declares unlawful "unfair, deceptive, or abusive acts or practices" in business, trade, commerce, or the furnishing of any service in the state, and defines "unfair" and "abusive." Under amended § 349(h) in that same bill text, a private right of action is available for a "deceptive act or practice" — not for the new unfair or abusive prongs. The Attorney General may bring actions under § 349(b).

A follow-on 2026 chapter amendment, Senate Bill S.8811, takes effect on the same date and in the same manner as that FAIR chapter. Per the official New York Senate PDF of S.8811: it repeals GBL § 348 (the FAIR Act purpose/intent and legislative-findings section added by S.8416); amends the § 349 "unfair" definition so "substantial injury" has the same meaning as in the FTC Act and no longer treats substantial injury to a person or persons other than consumers as "substantial injury" for this section; changes the Attorney General's pre-action written-response window from five business days to ten calendar days; and repeals § 349(b)(3). Private actions under § 349(h) remain limited to deceptive acts or practices. We are not treating S.8416's repealed § 348 findings — including any statement that the Attorney General's responsibility extends to businesses and non-profits — as current law.

(Official consolidated-law page https://www.nysenate.gov/legislation/laws/GBS/349 returned 403 from our checker this turn; operative text is taken from the New York Senate PDFs of S.8416 and S.8811.)

That sits alongside New York's existing Commercial Finance Disclosure Law, which requires covered providers of commercial financing up to $2.5 million, including sales-based financing, to give standardized disclosures when an offer is extended.

What It Means

None of these threads is a single "MCA oversight" story. The en banc Tenth Circuit has not ruled. The CFPB change described here is a Section 1071 data-reporting exclusion for MCA transactions. For now, much of the MCA-related statute work continues at the state level.

Sources

• CFPB, "Small Business Lending Under the Equal Credit Opportunity Act (Regulation B)," Federal Register, May 1, 2026: https://www.federalregister.gov/documents/2026/05/01/2026-08494/small-business-lending-under-the-equal-credit-opportunity-act-regulation-b
• Tenth Circuit order granting rehearing en banc and vacating the Nov. 10, 2025 judgment, No. 24-1293, Apr. 2, 2026: https://www.ca10.uscourts.gov/sites/ca10/files/opinions/010111411559.pdf
• Congressional Research Service, "En Banc Tenth Circuit to Consider Scope of DIDMCA Opt-Out Provision" (LSB11433), May 22, 2026: https://www.congress.gov/crs-product/LSB11433
• New York Senate Bill S.8416 PDF (enacted amending text of GBL § 349): https://legislation.nysenate.gov/pdf/bills/2025/S8416
• New York Senate Bill S.8416 page: https://www.nysenate.gov/legislation/bills/2025/S8416
• New York Senate Bill S.8811 PDF (repeals GBL § 348 and § 349(b)(3); amends unfair substantial-injury definition and AG notice window): https://legislation.nysenate.gov/pdf/bills/2025/S8811
• Official consolidated GBL § 349 (blocked 403 this turn; re-check before publish): https://www.nysenate.gov/legislation/laws/GBS/349
• WilmerHale, "Governor Hochul Signs the New York FAIR Business Practices Act Into Law," Jan. 5, 2026 (signing/effective dates): https://www.wilmerhale.com/en/insights/client-alerts/20260105-governor-hochul-signs-the-new-york-fair-business-practices-act-into-law
• New York DFS, Commercial Finance Disclosure Law regulation, Feb. 1, 2023: https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202302011

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