New York's FAIR Business Practices Act now shields small businesses: what changes for MCA collections

On February 17, 2026, New York's FAIR Business Practices Act took effect, extending the state's protections against unfair, deceptive, and abusive practices beyond consumers to small businesses and nonprofits. For the merchant cash advance market this is not a peripheral development: New York is the forum most MCA agreements select, the venue where most MCA judgments are entered, and the historical home of the industry's most aggressive collection practices.

The practical significance sits in the word 'abusive.' Consumer-protection standards built around that term reach conduct that older commercial doctrines tolerated: pressure tactics, exploitation of a counterparty's inability to protect its own interests, and practices that obscure the true terms of a transaction. Small businesses in MCA disputes could rarely invoke those standards before, because the statutes protected consumers only. In New York, that wall has now moved.

Court decisions following New York's earlier reforms have already vacated Confessions of Judgment that failed to comply with statutory requirements, establishing that the legislature's procedural protections are enforceable in practice, and industry tracking counts vacaturs in the thousands. The FAIR Act adds a broader conduct standard on top of those procedural rules.

What this means for owners in active MCA distress: the leverage math in New York forums has shifted. Collection conduct that once carried no consequence, harassment-grade contact, misrepresentation of remedies, abusive use of judgment and lien mechanics, now carries statutory exposure for the funder, which is precisely the kind of exposure settlement negotiators and defense attorneys convert into discounts and releases. When we write that the window between default notice and filing is where settlements are won, laws like this are what widen that window.

As always with new statutes, the case law defining the edges will take time. But direction matters as much as detail, and the direction, in the industry's own home venue, is toward accountability for collection conduct.