- 1The CFPB again confirmed MCAs are excluded from the Section 1071 final rule issued May 1, 2026.
- 2The small business revenue cutoff drops from $5 million to $1 million.
- 3A uniform compliance date of January 1, 2028 now applies.
The Consumer Financial Protection Bureau has restated that merchant cash advances are outside the Section 1071 small business lending data rule. The position appears in the bureau's annual Fair Lending Report, in the section on small business credit.
What the rule does
The CFPB issued its final rule on May 1, 2026, and the report recaps it. The bureau narrowed which "covered credit transactions" must be reported so that data collection centers on the core products small businesses use most: loans, lines of credit and credit cards. Three categories are carved out: merchant cash advances, agricultural lending and small-dollar business credit. The decision to exclude MCAs was first reported at the time of the final rule.
Other changes
The rule also changes who counts as a small business, cutting the gross annual revenue threshold from $5 million to $1 million. The bureau says that lets it concentrate on micro and small enterprises, which it views as most relevant to the purposes of Section 1071.
Other adjustments in the rule:
- Fewer data points must be collected.
- All institutions share one compliance date, January 1, 2028.
- The timing and manner of collection are simplified, giving institutions more flexibility in how they comply.
The bureau's rationale
The CFPB says the revisions are needed so implementation does not restrict credit availability for small businesses. It describes the 2023 rule as imposing many requirements that were not needed to serve the aims of Section 1071 of the Dodd-Frank Act, and says the new version includes only what the statute requires. In the bureau's view, institutions will see lower costs and a lighter data-collection burden without losing data availability.
Source reporting: deBanked.
