Texas MCA Registration Window Opens as State Regulators Widen Their Net

No single headline dominated the merchant cash advance industry in the past day, but the throughline running through 2026 keeps getting stronger: state regulators, not federal ones, are setting the rules MCA funders and brokers now have to live by. Three developments illustrate where things stand this month.

Texas Opens Registration for Sales-Based Financing Providers

Under Texas House Bill 700, now codified as Finance Code Chapter 398, providers and brokers of "commercial sales-based financing" — the state's statutory term for merchant cash advances — must register with the Texas Office of Consumer Credit Commissioner (OCCC). As of September 1, 2026, applicants can create the required account and submit registration applications through the Nationwide Multistate Licensing System (NMLS). Businesses already operating in Texas have until December 31, 2026 to complete registration, while new entrants must register before doing business in the state at all. The law also imposes commercial-financing disclosure requirements and restricts automatic account debits, following the model several other states have adopted. (Texas OCCC, FS Vector, Mayer Brown)

New Jersey Attorney General Targets "Junk Fees" in Commercial Financing

In June, New Jersey Attorney General Justin Davenport, acting alongside Governor Mikie Sherrill's Executive Order 19, issued a sweeping enforcement statement targeting "junk fees" — hidden, surprise, or excessive charges — under the state's Consumer Fraud Act. The statement explicitly calls out drip pricing, dark patterns, and non-transparent fee practices, and it follows the New Jersey Division of Consumer Affairs' earlier consent order with Yellowstone Capital LLC and related entities, which required the company to forgive roughly $21.7 million in outstanding merchant balances and pay more than $5.6 million to the state. Legal observers describe the statement as a potential roadmap for other state AGs looking to regulate financing fees without waiting on federal action. (Consumer Finance Monitor, NJ.gov)

The Yellowstone Capital Settlement Keeps Reshaping MCA Collections

New York's case against Yellowstone Capital remains the largest enforcement action the MCA industry has seen, and its effects are still working through the courts. Attorney General Letitia James's office secured a settlement barring Yellowstone from any MCA-related business, cancelling more than $534 million in amounts owed by small businesses, and vacating judgments the company had obtained against merchants and guarantors — part of a case that produced a judgment exceeding $1 billion. Courts in counties including Rockland have continued processing batches of vacated judgments tied to the case, underscoring how far the ripple effects extend beyond the original settlement. (NY Attorney General, Consumer Financial Services Law Monitor)

What It Means

Funders and brokers operating in Texas should treat the OCCC's NMLS window as a hard compliance deadline, not a formality — the state has paired registration with disclosure and anti-abuse rules similar to those already in force in New York, New Jersey, and California. More broadly, the pattern across all three stories is the same: with the CFPB less active on this front, state attorneys general and state licensing bodies are the ones actually writing and enforcing the rules of the road for MCA in 2026. Funders that built their compliance programs around federal oversight alone are increasingly exposed to state-level risk instead.