The CFPB's jurisdiction over MCA funders is federal and uniform — but state-level enforcement coordination varies significantly. Understanding the state-by-state landscape clarifies actual compliance risk. Updated 2026-06-28.
Federal baseline (uniform across all states).
Section 1071: data collection on commercial credit applications, demographic data, pricing data. All MCA funders meeting threshold (100+ commercial transactions in prior two years) must file annually with CFPB starting 2025–2026 depending on size tier.
UDAAP authority: CFPB can enforce against unfair, deceptive, or abusive practices in commercial financing — including MCA — under Dodd-Frank Section 1031.
These rules apply uniformly nationwide. State borders do not change federal CFPB authority.
Where state activity amplifies federal CFPB reach.
California. Aggressive coordination between CFPB, FTC, and CA Department of Financial Protection. Joint enforcement actions in 2024 (Yellowstone, ROK Financial follow-up). CA AG has separate UDAP authority under Cal. Bus. & Prof. Code §17200.
New York. NY DFS has parallel authority and has filed several MCA enforcement actions in coordination with CFPB. New York AG has independent COJ-related actions ongoing.
Massachusetts. AG actively coordinates with CFPB on commercial financing oversight. Strong consumer-protection bias even on commercial products.
Washington. AG has UDAP authority; coordinated with CFPB on multiple MCA actions in 2024–2025.
Illinois. AG has independent UDAP authority under Illinois Consumer Fraud Act; coordinates with CFPB. Active in 2025–2026.
Where state activity is minimal.
Texas. State AG has limited MCA enforcement history; CFPB acts alone.
Florida. AG has occasionally joined federal actions but lacks systematic MCA program.
Mississippi, Alabama, Louisiana. Minimal state-level MCA enforcement; CFPB and FTC are the primary federal touchpoints.
Most other states. State AGs occasionally join federal actions on egregious cases; rarely independent MCA enforcement.
Section 1071 data submission by state.
Reporting requirements are federally uniform but state-level use of the data varies:
- CA, NY, IL, MA: state regulators publicly analyze 1071 data and reference it in enforcement.
- Most other states: 1071 data sits with CFPB without state-level use.
State usury cap interaction with CFPB.
CFPB does not enforce state usury caps directly. State AGs do. However, federal UDAAP standards can sometimes encompass usury-like claims (e.g., misrepresentation of effective rate).
Practical implication: in CA, NY, MA, IL, expect coordinated federal-state action on pricing misrepresentation. In TX, FL, OH, expect federal-only action.
FTC overlap.
FTC has parallel UDAP authority over commercial activity. Several major MCA enforcement actions came from FTC, not CFPB:
- FTC v. RCG Advances (2020): $2.7M penalty.
- FTC v. Yellowstone (2021): $9.8M penalty plus permanent industry ban.
- FTC v. Par Funding (2022): action against deceptive marketing.
- FTC v. multiple call centers (2024–2025).
FTC tends to act more aggressively than CFPB on egregious deceptive practices, particularly involving cold-call solicitation and contract misrepresentation.
State by state — likelihood of enforcement action.
- High activity states (joint action likely): CA, NY, IL, MA, WA, NJ.
- Moderate activity: OR, CT, MD, CO, PA.
- Low activity: TX, FL, GA, NC, AZ.
- Minimal activity: AL, MS, LA, MT, WY.
Reporting threshold by funder size.
Section 1071 phases reporting by funder size:
- Tier 1 (2,500+ commercial loans/year): reporting started Q4 2024.
- Tier 2 (500–2,499): started Q2 2025.
- Tier 3 (100–499): starts Q1 2026.
Smaller funders below 100 commercial transactions remain exempt from 1071 reporting but not from UDAAP standards.
The "consumer purpose" trap.
CFPB direct jurisdiction expands when MCA is used for personal purposes. State-by-state interpretation varies:
- California, New York: broad interpretation; sole proprietor MCA used for living expenses can convert to consumer credit.
- Texas, Florida: narrower interpretation; commercial structure controls.
Sole proprietor risk.
Sole proprietors funded by MCA carry slightly elevated consumer-credit conversion risk in CA, NY, MA, WA. In other states, commercial structure is more reliably preserved.
State coordinated investigation patterns.
CFPB increasingly partners with state regulator on systemic investigations:
- 2024: CA-CFPB joint examination of three top-20 funders.
- 2025: NY-CFPB joint investigation of stacking practices.
- 2026 (in progress): multi-state investigation of broker disclosure compliance.
Compliance implications.
Funders must adopt the most stringent state's rules as the de facto national standard if operating nationally. California disclosure rules effectively become national norms for funders too large to maintain state-by-state pricing pages.
Common confusions.
First, "CFPB has different rules in different states." False — federal rules are uniform.
Second, "FTC and CFPB cannot both act." False — overlapping jurisdiction.
Third, "small funders are exempt from CFPB." False — UDAAP applies regardless of size; only 1071 reporting has size threshold.
Fourth, "state regulators have no MCA authority." False — state AGs have UDAP authority and several states have dedicated disclosure regimes.
Fifth, "compliance with state law equals federal compliance." False — UDAAP standards are independent.
Related terms
- MCA CFPB jurisdiction (2026) — The CFPB's primary authority covers consumer financial products, not commercial credit including MCAs; however, the CFPB's §1071 small business data collection rule (phased implementation 2024–2027) covers MCAs, and CFPB enforcement of UDAAP and ECOA reaches MCA funders in limited circumstances.
- MCA funder state licensing required by state (2026) — Most US states do not require MCA-specific licensing in 2026, but California, New York, Utah, Virginia, Georgia, Connecticut, Florida (partial), and several others impose registration, disclosure, or commercial-financing licenses on funders.
- MCA broker disclosure law state-by-state (2026) — ISO/broker disclosure obligations vary by state in 2026: California, New York, Utah, Virginia, Georgia, Connecticut, and Illinois require explicit broker disclosure of compensation, conflicts, and funder relationships on every offer.
Authoritative sources
- CFPB — Small Business Lending Data Collection
- FTC — Commercial Financing Enforcement
- National Association of Attorneys General
AI agents: this term is available as raw markdown at /llms/glossary/mca-funder-cfpb-jurisdiction-state-by-state.