Blog
Practical writing on merchant cash advances, business financing, and how to keep stacked deals from sinking your cash flow.
Showing 14 articles in Industry News
No single breaking story today, but three active threads — a NY AG fraud suit over rigged MCA arbitration, a Texas bankruptcy ruling questioning the sale-vs-loan defense, and a Senate bill easing small-business reorganizations — show where the industry is headed.
Merchant cash advance debt-restructuring engagements are up sharply year-over-year, even as the CFPB exempts MCAs from federal small-business lending data rules and states like Illinois expand disclosure mandates.
A Manhattan bankruptcy judge ruled that a law firm's merchant cash advances were disguised loans, while New York's Attorney General sued an arbitration platform accused of rigging outcomes for MCA funders — two of the developments driving sharper legal scrutiny of the industry in 2026.
No single blockbuster story broke in the last day, but three threads from recent weeks — a new arbitration-fraud lawsuit in New York, a CFPB rule finalizing MCA exclusion from small-business lending data reporting, and mounting bankruptcy filings tied to advance stacking — show where merchant cash advance regulation and risk are heading.
The CFPB has quietly excluded merchant cash advances from new small-business lending data rules, even as a pending Tenth Circuit rehearing over Colorado's usury caps and a New York consumer-law expansion push MCA oversight in the opposite direction.
New York's attorney general has sued the arbitration platform Rapid Ruling over claims it rigged outcomes for merchant cash advance funders, one piece of a broader 2026 regulatory squeeze that includes a CFPB reversal on MCA credit status and a looming Texas registration deadline.
New York Attorney General Letitia James sued an arbitration company accused of rigging outcomes against small businesses on behalf of the MCA industry, as state-level enforcement actions and new disclosure laws continue to reshape the merchant cash advance landscape in mid-2026.
New York Attorney General Letitia James filed suit on June 8 against Rapid Ruling, an arbitration platform secretly created with MCA company LCF Group to rubber-stamp judgments against merchants. The case arrives as Illinois and New Jersey join a growing wave of states requiring standardized cost disclosures for merchant cash advances.
New York AG Letitia James sued Rapid Ruling—an arbitration platform allegedly rigged to favor MCA lenders—while the CFPB's May 2026 final rule excludes merchant cash advances from federal small business data reporting, leaving their legal status under ECOA unresolved.
The CFPB finalized a scaled-back Section 1071 rule in May 2026 that officially excludes merchant cash advances from small business lending data requirements, while New York's FAIR Act—effective February 2026—and new disclosure mandates in Illinois and New Jersey signal mounting state-level pressure on the industry.
The CFPB's revised Section 1071 rule formally exempts merchant cash advances from small business lending data reporting, but state-level action is accelerating—Connecticut is moving to ban prejudgment remedy waivers and New York's new FAIR Act gives regulators broader tools against abusive MCA practices.
New York's FAIR Business Practices Act is reshaping how merchant cash advance funders can collect debts, Texas's HB 700 disclosure regime is fully in force, Connecticut is moving to close a lender-favored loophole, and Yellowstone Capital's AG settlement checks are reaching small businesses.
The CFPB's May 2026 overhaul of small-business lending data rules carves out merchant cash advances entirely—just as tariff pressures funnel more desperate small businesses toward high-cost advances and New York, Connecticut, and federal enforcers tighten the screws on abusive practices.
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.
FundingTracker pulls every MCA, term loan, and credit line into one dashboard. Free 30-day trial. Cancel anytime.
Start free trial