- 1The CFPB updated its final 1071 rule to improve data usefulness and cut burden.
- 2MCAs were excluded from the reporting requirements.
- 3RBFC says the rule recognizes that sales-based products differ from traditional credit.
The Revenue Based Finance Coalition (RBFC) is welcoming the CFPB's revised small business lending data rule, which now leaves merchant cash advances out of its reporting requirements.
What changed
Last week, the CFPB updated its final Section 1071 rules to make the collected data more useful and reduce the burden on covered parties. As part of that update, MCAs were finally excluded from the reporting requirements. The RBFC had advocated strongly for some of the changes that made the final version.
The coalition's reaction
In a public statement, the RBFC called the final rule "an important step in the right direction." It said the rule treats sales-based financing fairly and accepts that such products differ in basic ways from conventional credit. The group added that the rule limits its reach to arrangements that plainly come under the Equal Credit Opportunity Act, and that it was pleased to see the CFPB acknowledge that whether a product counts as credit depends on its specific structure.
The coalition said the framework brings clarity for responsible providers and the small businesses that rely on flexible, performance-based financing, and that it will keep advocating for fair, clear and appropriate regulation of sales-based financing. It said the clarity should support continued innovation and responsible access to capital.
The rule takes its "1071" label from its statutory section number in the 2010 Wall Street Reform and Consumer Protection Act.
Source reporting: deBanked.
