Key takeaway: Merchants and MCA providers planning around Section 1071 compliance can treat the exclusion as settled for now. However, the CFPB has left the door open to revisiting MCA coverage in a future rulemaking. Providers should not assume the carve-out is permanent.
The Consumer Financial Protection Bureau reaffirmed a position in its newly published annual Fair Lending Report. The report states that merchant cash advances remain outside the scope of Section 1071 small-business lending data collection. The reaffirmation comes more than five months after the agency finalized the rule that excluded them.
The CFPB published the report on October 13, 2026. DeBanked first reported it. The report restates the reasoning behind the bureau’s May 1, 2026 final rule. That rule narrowed Section 1071 of the Dodd-Frank Act. It now focuses data collection on the small-business lending products that small businesses use most. Those products are loans, lines of credit and credit cards.
The final rule excludes merchant cash advances, agricultural lending and small-dollar business credit of $1,000 or less. It also raises the coverage threshold from 100 to 1,000 covered originations a year. That change cuts the number of covered depository institutions to roughly 172 to 181. CFPB estimates cited in regulatory analyses of the rule support that figure.
The bureau said merchant cash advances differ structurally from traditional lending products. As a result, officials said, collecting Section 1071 data on MCAs would not produce comparable information. The data would not match what the bureau gathers on other covered transactions.
Covered lenders do not need to comply with the narrowed rule until January 1, 2028. That gives them roughly another 14 months before reporting obligations begin.
Why it matters: Merchant cash advance providers supply a large share of fast, revenue-based financing to small merchants. They will keep operating without the fair lending data reporting that applies to traditional small-business loans. That leaves regulators and researchers without a federal dataset to compare MCA lending patterns against other credit products.
Source: deBanked