Maryland State Legislators Want to Enact “Prohibition” on Merchant Cash Advances

A Maryland State Senator and 4 State Delegates are calling for a prohibition on merchant cash advances through a bill introduced this month that aims to make it illegal to arrange, facilitate or consummate a merchant cash advance with a merchant in the state.

Maryland State Senate Bill 913 and House Bill 1478, literally headlined as Merchant Cash Advance Prohibition, defines a merchant cash advance as:

AN ARRANGEMENT BETWEEN A BUYER AND A SELLER IN WHICH THE BUYER AGREES TO PURCHASE AN AGREED–ON PERCENTAGE OF FUTURE CREDIT CARD REVENUES OR DEBIT CARD REVENUES THAT ARE DUE TO A SELLER FOR A PREDETERMINED PURCHASE PRICE

If all went to plan, the law would go into effect as early as October 1st of this year. Support at this early stage is bipartisan, with the Senate Bill sponsored by a Democrat and the House bill sponsored by 4 republicans. Hearings on the matter are being held on March 2nd and 3rd.