The CFPB issued its revised Section 1071 small business lending data rule in May 2026, and merchant cash advances are excluded from the definition of a covered credit transaction — alongside agricultural and small-dollar lending. The Bureau’s reasoning was that MCAs are structured differently from traditional lending products. The rule takes effect 30 June 2026, with compliance pushed to 1 January 2028 and first reporting to 1 June 2029.
Section 1071 of Dodd-Frank required lenders to collect and report demographic and pricing data on small business credit applications. For several years the open question in this industry was whether merchant cash advances would be swept in. They have not been.
| Issued | May 2026, revising the 2023 rule |
| Effective | 30 June 2026 |
| Compliance begins | 1 January 2028 |
| First report due | 1 June 2029 |
| Coverage threshold | 1,000 originations in both 2026 and 2027 |
| Grace period | Calendar 2028, for good-faith data errors |
| MCAs | Excluded from covered credit transactions |
Agricultural lending and small-dollar loans were excluded on the same basis. The Bureau’s stated reasoning for MCAs was structural — that they are built differently from traditional lending products, and that the first round of data collection should concentrate on core lending before widening.
Directly, very little, and that is worth saying plainly rather than dressing it up as a win.
The two directions are worth holding together, because reading either on its own gives the wrong picture of where this industry is going.
| Federal | State |
|---|---|
| 1071 excludes MCAs | Ten states require commercial financing disclosure |
| No new reporting obligation | Seven states attach broker or provider registration |
| Compliance pushed to 2028 | Texas registration closes 31 December 2026 |
| Scope narrowed | New York extended unfair-practice protections to small businesses in February 2026 |
A broker reading only the federal column would conclude the regulatory tide is going out. The column beside it has a deadline four months away and it names brokers, not only funders.
For context on why regulators keep looking: the MCA market is estimated at roughly $21 billion in 2026, up from about $19.7 billion in 2025, and projected to keep growing through the decade. Independent sales organisations and brokers originate an estimated 70 to 80 percent of that volume.
That second figure is the one worth sitting with. The distribution channel is the industry, which is why registration requirements have started naming brokers rather than stopping at funders. If you are reading this you are most likely in the segment the next round of rules is aimed at.
No. The CFPB’s revised final rule, issued in May 2026, excludes merchant cash advances from the definition of a covered credit transaction, along with agricultural lending and small-dollar loans. The Bureau’s stated reasoning was that MCAs are structured differently from traditional lending products and that initial data collection should focus on core lending.
The revised rule is effective 30 June 2026. Compliance — meaning actual data collection — begins 1 January 2028 for institutions meeting the threshold, with the first Small Business Lending Application Register due 1 June 2029. A grace period runs through calendar 2028 for good-faith data errors.
Institutions originating at least 1,000 covered transactions in both 2026 and 2027 must begin collecting data on 1 January 2028 and file their first register by 1 June 2029.
No. The Bureau excluded MCAs because they are structurally different from loans, not because it concluded they warrant less oversight — and that same structural argument is what state regulators are pressing from the opposite direction. Ten states require commercial financing disclosure, seven attach broker or provider registration, and Texas has a registration deadline of 31 December 2026.
Roughly $21 billion in 2026, up from about $19.7 billion in 2025, with growth projected through the decade. Independent sales organisations and brokers originate an estimated 70 to 80 percent of that volume, which is why registration requirements have increasingly named brokers rather than stopping at funders.
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