In 2025, the Merchant Cash Advance (MCA) industry will see significant regulatory changes shaping businesses’ operations. These changes aim to enhance transparency, protect consumers and ensure the financial system’s stability. There are three major regulatory updates that will likely impact the MCA industry this year.
FDIC brokered deposits rule
The Federal Deposit Insurance Corporation (FDIC) proposed changes to the brokered deposits rule in June 2024. This rule is crucial because it affects how fintech companies and insured depository institutions (IDIs) work together. Brokered deposits are funds a bank gets through a third party, like a fintech company. These deposits can be risky because they might leave the bank quickly if the third party decides to move them. The FDIC’s proposed changes aim to make these deposits safer and more stable.
One of the key changes is the simplification of the definition of a “deposit broker.” This change will help banks and fintech companies understand who is considered a broker and what rules they need to follow. The FDIC also wants to eliminate the “exclusive deposit placement arrangement” exception, which currently allows some brokers to avoid specific regulations. By removing this exception, the FDIC hopes to reduce risks and ensure that all brokers follow the same rules.
Another significant change is the “primary purpose exception” (PPE) revision. This exception allows some brokers to place deposits without being considered deposit brokers if their primary purpose is not to provide deposit placement services. The FDIC wants to revise this exception to consider the third party’s intent in placing customer funds at a particular IDI. This change aims to ensure that brokers are not using loopholes to avoid regulations.
Expedited funds availability changes
Starting July 1, 2025, the Consumer Financial Protection Bureau (CFPB) and the Federal Reserve Board will implement cost of living adjustments for Regulation CC funds availability rules for businesses and consumers. These rules determine how quickly banks must make funds available to customers after a deposit. The adjustments are based on inflation and will increase the minimum amounts for next-day availability and other thresholds.
Bank Secrecy Act (BSA) program requirements
New rules expected in 2025 will change the current Bank Secrecy Act (BSA) program requirements for banks. These changes are part of an effort to strengthen anti-money laundering (AML) and countering the financing of terrorism (CFT) programs. The new rules will require banks to consider AML/CFT priorities when designing their BSA programs.
Will these changes affect your business loan?
The regulatory changes in 2025 aim to enhance the financial system’s safety, transparency and effectiveness. Those companies with loans who understand and adapt to these changes can better protect their business.