Do MCA brokers and ISOs have to register in Texas too?

Yes. The obligation applies to brokers as well as providers, and unlike Connecticut and Virginia, Texas includes no de minimis exemption for low-volume operators.

Does OCCC registration mean the funder's rates were approved?

No. HB 700 expressly bars the Finance Commission of Texas from setting a maximum APR, finance charge, or fee for these transactions. Registration confirms that a filing was made and a fee was paid, not that pricing was reviewed or approved.

Texas OCCC Registration Deadline: MCA Rules for Dec 31, 2026

Q: Is my MCA agreement void if the funder is not registered in Texas?

No. Texas Finance Code Chapter 398 is enforced by the OCCC through injunctions, administrative penalties of up to $10,000 per violation, and registration suspension or revocation. Failure to register does not void your agreement and does not create a claim you can bring yourself. The one provision that does void contract language is the confession-of-judgment prohibition in Section 398.055.

Q: How do I check if my merchant cash advance company is registered in Texas?

Search the exact contracting entity name from the signature block of your agreement, not the marketing brand, in NMLS Consumer Access, since 7 TAC Section 86.303 routes Texas registration through NMLS. Check the OCCC site as well, and search your broker or ISO separately, because brokers carry their own registration obligation.

Q: Are confessions of judgment legal in Texas MCA contracts?

No. Under Texas Finance Code Section 398.055, a commercial sales-based financing contract containing a confession of judgment provision or any similar provision is void and unenforceable, and 7 TAC Section 86.312(b)(5) makes it a prohibited unfair, deceptive, or abusive practice.

Q: What is the Texas OCCC registration fee for sales-based financing?

Under 7 TAC Section 86.307, $1,000 for initial registration and $1,000 for annual renewal, adjustable annually by the OCCC based on the Consumer Price Index.

Last updated: August 2026 | Reviewed against Texas Finance Code Chapter 398 and 7 TAC Chapter 86, Subchapter C (effective July 9, 2026)

On December 31, 2026, every company that provides or brokers a merchant cash advance to a Texas business has to be registered with the Texas Office of Consumer Credit Commissioner. Not licensed in the traditional sense — registered, through NMLS, with a $1,000 fee and a named list of the people who actually control the company. There is no volume exemption. A funder that wrote one deal in Texas this year is covered the same as one that wrote four thousand.

If you are a Texas business owner with an advance you cannot service, that deadline is not really your problem — it is your funder’s. But it changes what you can find out about them, what they are allowed to do to your bank account, and what has to be sitting in their file if they sue you. Those three things are worth understanding before you sign anything else or respond to a demand letter.

CredibleLaw is a national legal resource and referral network. We are not a law firm, we do not represent clients, and nothing below is legal advice. What follows is a plain reading of the Texas statute and the implementing rules, written so you can check your own paperwork against them and have a more useful conversation with a Texas attorney than you would otherwise have.

What HB 700 actually did

Governor Abbott signed House Bill 700 on June 20, 2025. It added Chapter 398 to the Texas Finance Code and created, for the first time in Texas, a regulatory framework aimed specifically at commercial sales-based financing — the product most people call a merchant cash advance, where repayment is taken as a percentage of sales or revenue rather than on a fixed amortization schedule.

Texas joined Connecticut and Virginia as one of only three states with disclosure requirements written specifically for this product rather than for commercial financing generally, according to a March 2026 survey of state commercial financing laws by Venable LLP. Ten states now require some form of commercial financing disclosure. You can see how Texas compares in our state-by-state guide to merchant cash advance laws.

The rollout has been staged:

Date	What took effect
June 20, 2025	HB 700 signed into law, adding Chapter 398 to the Texas Finance Code.
September 1, 2025	Statute generally effective. Disclosure requirements, the confession-of-judgment prohibition, and the automatic-debit restriction all begin operating.
July 9, 2026	Implementing rules take effect: 7 TAC Chapter 86, Subchapter C (§§86.301–.322), adopted by the Finance Commission of Texas and filed with the Secretary of State on June 19, 2026.
December 31, 2026	Deadline for all covered providers and brokers to be registered with the OCCC through NMLS.
On or before Jan. 31 annually	Registration renewal window. Registrations run a one-year term.

That sequence matters more than it looks. The obligations that protect you — disclosure, the debit restriction, the confession-of-judgment ban — have been live since September 2025. The registration deadline is the last piece to land, and it is the piece that finally makes the industry visible.

Who has to register by December 31, 2026

Both providers and brokers of commercial sales-based financing. In practice that means the funder whose name is on your agreement and the ISO or broker who placed the deal — the person who called you six times in a week is covered too.

Three details make the Texas rule broader than most people expect:

No de minimis exemption. Connecticut and Virginia both carve out low-volume providers. Texas does not. Volume is irrelevant to whether you must register.
Registration is not capped at $1 million. The disclosure obligation applies to specific offers under $1 million. The registration obligation has no such ceiling, so a company that only writes large transactions can be required to register even though it owes no disclosures on those deals.
“Key individuals” are named. Under §86.302, registration reaches individuals who own 10% or more of the business or who have the power to direct its management — a CEO, president, general partner, or comparable control person. §86.322 lets the OCCC suspend or revoke a registration based on the criminal history of the registrant or its key individuals.

Banks, credit unions, and certain other financial institutions are excluded by Texas Finance Code §398.003. When an industry group asked the Finance Commission to restate that exclusion inside the rules, the commission declined on the ground that it already sits in the statute.

The mechanics: registration is filed through NMLS, the same multistate system used for mortgage and consumer finance licensing (§86.303). The fee is $1,000 for initial registration and $1,000 for each annual renewal, CPI-adjustable, under §86.307. Registrants must report certain changes in advance and others — civil or regulatory actions, criminal history, bankruptcy, data breaches — within 30 days (§86.305). The full adopted text is published in the Texas Register.

How to check whether your MCA funder is registered in Texas

This is the practical part, and it is something you can do yourself in about ten minutes.

Get the exact legal entity name off your agreement. Not the brand on the website. The party name in the signature block, including the LLC or Inc. suffix and any “d/b/a.” Funders frequently market under one name and contract under another.
Search NMLS Consumer Access. Because §86.303 routes Texas sales-based financing registration through NMLS, registered providers and brokers are searchable there by company name once they file. Search the contracting entity, not the brand.
Check the OCCC directly. The Office of Consumer Credit Commissioner maintains registrant information and publishes guidance on Chapter 398 implementation. If the entity does not appear anywhere, that is a fact worth writing down with the date you checked.
Check the broker separately. If an ISO placed your deal, it carries its own registration obligation. A registered funder working through an unregistered broker is a compliance problem for both.
Look for the OCCC notice in your contract. This one takes thirty seconds and is covered in detail below.

One timing caveat: before December 31, 2026, a funder that has not yet registered is not necessarily out of compliance — the statute gives them until the deadline. What you are building is a record, not a conclusion.

What registration does not do — read this part carefully

There is a great deal of bad information online about state MCA disclosure laws, most of it pointing in the same direction: that a violation cancels your debt. It does not, and believing otherwise has cost Texas business owners real money in wasted filings.

Three things to be clear about:

Chapter 398 is enforced by the OCCC, not by you. The statute authorizes the commissioner to investigate, seek injunctions that may include restitution, impose administrative penalties, and suspend or revoke registrations (§§86.320–.321). It does not create a private right of action for a merchant to sue over a disclosure failure. This is the same structure Florida and Utah adopted.
A disclosure violation does not void your agreement. A funder that gave you a defective disclosure has a problem with the state. Your contract is still a contract. There is one narrow and important exception — confessions of judgment — covered in the next section.
Penalties are paid to Texas, not to you. The maximum administrative penalty is $10,000 per violation under Texas Finance Code §398.101, reflected in §86.321(c). That money does not offset your balance.

Registration also is not a quality rating. It means a company paid $1,000 and filed a form. It does not mean the OCCC reviewed their contracts or blessed their pricing — in fact, the Finance Commission is expressly prohibited by HB 700 from setting a maximum APR, finance charge, or fee for these transactions. Registered funders can and do charge what unregistered ones charge.

So why does any of it matter to you? Because the same statute that created the registry created four obligations that are enforceable at the contract level, and those are where a Texas merchant actually has leverage.

Four things HB 700 gives Texas merchants that registration alone does not

1. Confession of judgment provisions are void

Under Texas Finance Code §398.055, a commercial sales-based financing contract containing a confession of judgment provision — or any similar provision — is deemed void and unenforceable. Holland & Knight flagged this as one of the most consequential provisions in the bill when it was signed, in its June 2025 analysis of HB 700.

This is not a disclosure technicality. It is a substantive contract defense, and it is the one place in Chapter 398 where a violation genuinely changes what a funder can do to you. Section 86.312(b)(5) reinforces it by making a confession of judgment in violation of §398.055 an unfair, deceptive, or abusive practice in its own right.

If your agreement contains a COJ, a stipulation of settlement signed at closing, an affidavit of confession, or a clause authorizing the funder to enter judgment on default without notice, that language deserves attention from Texas counsel. Our overview of confession of judgment clauses in MCA agreements explains how these instruments work and why several states have moved against them.

2. Automatic debits require a first-priority perfected security interest

This is the provision the industry fought hardest, and it is the one most likely to matter if daily withdrawals are draining your account.

Texas Finance Code §398.056, implemented by §86.313, prohibits a provider or broker from establishing a mechanism for automatically debiting a recipient’s deposit account unless it holds a validly perfected security interest with first priority against all other claimants. Section 86.313(c) goes further: to automatically debit a deposit account, the provider must hold a validly perfected, first-priority security interest in all of the recipient’s accounts receivable.

The adopted rule closes several obvious workarounds:

A debit is “automatic” if it is authorized in advance to occur more than once or on a recurring basis (§86.313(b)). The funder cannot escape the rule by having an employee press a button each morning — the Finance Commission rejected exactly that argument from an industry law firm, reasoning that it would let providers circumvent the statute.
Collecting a stack of prewritten checks in advance counts as a mechanism for automatically debiting the account (§86.313(b)).
A provider may not accept payment of a prohibited debit, and may not direct a third party to complete one (§86.313(e)). Routing the debit through a payment processor does not fix it.

Now consider stacking. If you have three advances outstanding, at most one of those funders can hold a first-priority perfected interest in your receivables. That has direct implications for whether the other two are permitted to be debiting you at all. If withdrawals are hitting your account daily from multiple funders, this is the first thing to raise with a Texas attorney — start with our guide on how to stop MCA daily withdrawals, and pull the UCC-1 filings against your business so you know the actual priority order. Our resource on MCA UCC lien removal covers how to read what is on file.

One nuance the rule addresses directly: a comment asked the commission to require that the UCC-1 be filed in Texas, describing an abuse where a funder files in New York against a Texas small business and claims that establishes its debit rights. The commission declined to add that language — not because the abuse is not real, but because which state’s law governs perfection depends on the debtor’s location, organizational structure, and collateral type under Texas Business & Commerce Code §§9.301, 9.305, and 9.307. In other words, it is a fact question, and it is one your lawyer needs the documents to answer.

3. The disclosure has to be signed before you are locked in

For a specific offer of sales-based financing under $1 million, Texas Finance Code §398.051 requires a written disclosure covering the total amount financed, the disbursement amount, the total repayment amount, the payment schedule and estimated monthly payments, all finance charges and fees, and any collateral requirements. Section 398.052 requires the provider to obtain your signature on that disclosure before finalizing the application.

Rule §86.310 tightens the timing and the accuracy standard. The disclosure must be delivered at or before the moment the provider extends a specific offer, and every term and dollar amount must accurately reflect that offer. If the provider later discovers an inaccuracy, it must promptly notify you and provide corrected disclosures — and the commission was explicit that a corrected disclosure is not a do-over that erases the original violation, and does not authorize the provider to change an already-executed contract.

“Specific offer” is defined in §398.001(9) and is broader than many funders would like: it covers a price or amount quoted based on information obtained from or about you that would bind the provider if you accepted. An industry group asked the commission to exclude nonbinding estimates; the commission declined, finding the statutory definition already clear.

Practically: pull your file. Do you have a signed disclosure dated at or before the offer? Do the numbers on it match the contract you signed? If you are trying to reconcile what you were told against what you are actually paying, our merchant cash advance calculators will let you work out the real cost of capital on your deal.

4. Your contract must tell you how to complain

This is the fastest tell in the whole statute. Rule §86.310(d) requires that a contract for services under Chapter 398 contain the following statement, set out as a separate section or otherwise conspicuously separated from the surrounding text:

“The Office of Consumer Credit Commissioner (OCCC) is a state agency that enforces certain laws that apply to this contract. If a complaint cannot be resolved by contacting the provider, a commercial sales-based financing recipient can contact the OCCC to file a complaint. OCCC address: 2601 N. Lamar Blvd., Austin, Texas 78705. Phone: (800) 538-1579. Website: occc.texas.gov.”

Two industry associations asked the commission to drop this requirement so providers could use identical contracts across states. The commission refused, saying recipients need to know they can file complaints, and suggesting that multistate funders simply include it as a Texas-specific provision.

Go look at your agreement. If it was executed after the rules took effect and that notice is not there, you have found something concrete — and it is the kind of thing an OCCC complaint is built for.

The conduct list: what Texas now treats as unfair, deceptive, or abusive

Section 86.312(b) enumerates fifteen practices that are unlawful, unfair, deceptive, or abusive in a Chapter 398 transaction. Several of them describe collection tactics Texas merchants report constantly:

Claiming a legal right to take an action the person does not actually have authority to take (§86.312(b)(1)(B)) — the demand letter that threatens a remedy the funder cannot lawfully pursue.
Stating there is no personal guarantee when that is inaccurate (§86.312(b)(1)(C)).
Charging fees or amounts that were not specifically disclosed and contracted for (§86.312(b)(3)).
Filing a lien on a debtor’s property without first obtaining a security agreement authenticated by the debtor under Texas Business & Commerce Code §9.203 (§86.312(b)(8)).
Debiting a person’s account or deposit account without authorization (§86.312(b)(10)).
Instructing you — or your customers — to redirect payments that were scheduled to go to someone else, such as a factor, unless that person consented or the debt was validly assigned (§86.312(b)(12)). This provision exists because factoring companies documented funders contacting their account debtors directly.
A provider’s material violation of a written intercreditor agreement it is party to (§86.312(b)(13)).
Improperly characterizing a transaction as “business” or “commercial” when the funds were extended primarily for individual, family, or household use (§86.312(b)(14)) — the commission tied this to Texas Finance Code §342.008’s prohibition on subterfuge to evade consumer lending rules.
Any device or subterfuge to evade statutory or regulatory requirements (§86.312(b)(15)).

Worth being precise about what this list is and is not. It is a regulatory standard the OCCC enforces. It is not a menu of causes of action you can file on Monday. Whether conduct on this list also supports a claim under other Texas law is a question for a licensed Texas attorney looking at your specific documents. Our overview of merchant cash advance legal defenses covers the arguments that are actually litigated.

What your funder is now required to keep — and why that helps you

Rule §86.311 is the least discussed provision in the package and, if you are already in litigation, possibly the most useful. For every transaction, a provider must maintain a transaction file containing:

a complete copy of the written agreement;
each disclosure made to the recipient, including §398.051 disclosures;
each additional document, addendum, or authorization you signed;
documentation showing attachment, perfection, or release of any lien;
an account history showing the application of each payment you made; and
written documentation of collection, repossession, foreclosure, or litigation against you.

The file must be kept for the later of four years from the transaction date or two years from the final entry on the account. Brokers keep their own file. Registrants must also retain applications and adverse action notices for a year, advertisements and solicitations for a year, third-party agreements for a year after termination, and four years of data breach notifications.

Read that list again as a defendant. A funder suing a Texas merchant is now required by rule to possess a payment-application history and its lien perfection documentation. If a funder cannot produce a clean accounting of how your payments were applied, or cannot document that its security interest was properly perfected, that is a meaningful problem in a collection case — and it connects directly to the debit restriction discussed above. If you are already being sued, our guide to merchant cash advance lawsuit defense walks through the response timeline.

How to file an OCCC complaint

The OCCC takes complaints and has authority to request information and conduct investigations under §86.320. Its stated enforcement approach under §86.321 is escalating: informal resolution first, then an injunction to correct violations, then administrative penalties, and revocation only if violations go uncorrected.

Contact information, taken from the rule text: Office of Consumer Credit Commissioner, 2601 N. Lamar Blvd., Austin, Texas 78705. Phone (800) 538-1579. Website occc.texas.gov.

Before you file, assemble:

the executed agreement and every addendum;
the §398.051 disclosure, if you were given one, and the date you signed it;
bank statements showing the debits, with dates and amounts;
the UCC-1 filings against your business and their filing dates;
all written collection communications; and
a dated note of what you found when you searched for the funder’s registration.

A complaint is not a substitute for a defense. If you have been served, the deadline to answer runs on court time and does not pause for a regulator. Do both — but answer first, and understand what an MCA default actually leads to before you decide how to proceed.

If you are already behind on a Texas advance

Nothing above changes the arithmetic of a deal you cannot service. It changes the terrain you are negotiating on. A short, honest sequence:

Do not close or drain the debited account without advice. It is understandable and it is frequently the trigger for the aggressive response. If your account has already been restrained, read this first.
Pull the UCC filings. Priority order is the fact everything else turns on.
Check the contract for a confession of judgment and for the OCCC notice. Both are yes-or-no questions you can answer tonight.
Get a Texas attorney. Chapter 398 questions, UCC priority, and Texas collection procedure are not areas to navigate from a forum post. Understand your realistic outcomes first — including MCA settlement and, where the numbers require it, bankruptcy options.

Frequently asked questions

When is the Texas OCCC registration deadline for MCA companies?

December 31, 2026. Providers and brokers of commercial sales-based financing must be registered with the Office of Consumer Credit Commissioner by that date, with annual renewal on or before January 31 thereafter.

Is my MCA agreement void if the funder is not registered in Texas?

No. Chapter 398 is enforced by the OCCC through injunctions, administrative penalties of up to $10,000 per violation, and registration suspension or revocation. Failure to register does not void your agreement and does not create a claim you can bring yourself. The one provision that does void contract language is the confession-of-judgment prohibition in §398.055.

Can I sue my MCA lender for a Texas disclosure violation?

Chapter 398 does not create a private right of action for disclosure failures. Whether the underlying conduct supports a claim under other Texas law is a separate question that requires a licensed Texas attorney to review your documents.

How do I check if my merchant cash advance company is registered in Texas?

Search the exact contracting entity name — from the signature block, not the marketing brand — in NMLS Consumer Access, since §86.303 routes Texas registration through NMLS. Check the OCCC site as well, and search your broker or ISO separately.

Does HB 700 apply to advances over $1 million?

The disclosure requirements apply to specific offers of less than $1 million. The registration requirement is not limited by transaction size, so a provider working only above that threshold can still be required to register.

Are confessions of judgment legal in Texas MCA contracts?

No. Under Texas Finance Code §398.055, a commercial sales-based financing contract containing a confession of judgment provision or any similar provision is void and unenforceable, and §86.312(b)(5) makes it a prohibited practice.

Can my MCA lender take daily withdrawals from my Texas bank account?

Only if it holds a validly perfected, first-priority security interest in all of your accounts receivable (Tex. Fin. Code §398.056; 7 TAC §86.313). Where several funders are debiting one business, at most one of them can hold first priority — which makes this a central question in stacked-advance situations.

Do brokers and ISOs have to register too?

Yes. The obligation applies to brokers as well as providers, and Texas includes no de minimis exemption for low volume.

What is the OCCC registration fee?

Under §86.307, $1,000 for initial registration and $1,000 for annual renewal, adjustable annually by the OCCC based on the Consumer Price Index.

Does registration mean the OCCC approved the funder’s rates?

No. HB 700 expressly bars the Finance Commission from setting a maximum APR, finance charge, or fee. Registration confirms a filing was made, not that pricing was reviewed.

My contract has no OCCC complaint notice. What does that mean?

Rule §86.310(d) requires that specific notice, conspicuously set out, in a contract for services under Chapter 398. Its absence from a contract executed after the rules took effect on July 9, 2026 is worth documenting and raising with counsel or with the OCCC.

I signed before September 2025. Does any of this help me?

Chapter 398 obligations attach to transactions governed by the statute, so timing matters and the answer depends on your dates. A Texas attorney reviewing your specific agreement can tell you which provisions reach your deal. Older agreements may still present other defenses unrelated to HB 700.

The bottom line for Texas business owners

December 31, 2026 is a deadline for funders, not for you. But it produces something Texas merchants have never had: a public list of who is legally operating in this market, attached to a rulebook that says what they may and may not do to your bank account, your receivables, and your customers.

The realistic value of HB 700 is not a debt-cancellation theory. It is four checkable facts — whether they are registered, whether your contract contains a confession of judgment, whether their security interest is genuinely first in line, and whether the OCCC notice is in your paperwork — that shift the balance of information in a negotiation or a lawsuit. That is worth an evening with your file.

Facing an MCA lawsuit or daily withdrawals in Texas?

CredibleLaw connects Texas business owners with independent attorneys who handle merchant cash advance disputes, UCC lien issues, and commercial collection defense. Request a free case review or call 888-201-0441. You can also start with our national MCA defense resource center.

Disclaimer: CredibleLaw is a national legal resource and referral network. CredibleLaw is not a law firm, does not provide legal representation or legal advice, and does not maintain offices in Texas. No attorney-client relationship is created by reading this article, submitting an inquiry, or contacting CredibleLaw. This article summarizes Texas Finance Code Chapter 398 and 7 TAC Chapter 86, Subchapter C as of August 2026; statutes, rules, and agency guidance change, and the application of any provision depends on the specific facts of your transaction. Consult a licensed Texas attorney before acting on anything described here. This material may be considered attorney advertising in some jurisdictions.