How Greenspoon Marder's MCA Regulatory Update Reshapes Bank Verification Compliance for Funders

Regulatory Pressure Is Closing In on MCA Verification Workflows

When one of the MCA industry's most prominent law firms schedules a joint webinar on "important industry updates," the signal is clear: compliance requirements are shifting, and funders need to pay attention. Greenspoon Marder, a firm deeply embedded in the merchant cash advance ecosystem, has partnered with deBanked for an April 30th webinar focused on regulatory changes affecting MCA operations. For funders and underwriters, the timing coincides with a broader shift toward stricter documentation and verification standards that directly impacts MCA underwriting best practices.

This is not an abstract legal discussion. The past several months have delivered a string of enforcement actions, new state-level disclosure requirements, and heightened scrutiny of how funders confirm the financial data that drives their funding decisions. The question facing every MCA operation right now is straightforward: can your bank verification workflow survive a regulatory audit?

In this article, we break down what the latest regulatory signals mean for bank verification compliance, why audit trails have become a non-negotiable part of responsible underwriting, and how asynchronous verification technology helps funders stay ahead of the compliance curve without sacrificing speed.

Why Compliance Demands Are Escalating for MCA Funders

Enforcement Actions Are Setting the Tone

The MCA industry's compliance environment changed materially when Kris Roglieri, the former operator of the National Alliance of Commercial Loan Brokers (NACLB) Conference, received a 97-month prison sentence for wire fraud conspiracy. This was not a slap on the wrist or a civil fine. It was a federal criminal prosecution that sent a clear message: regulators and law enforcement are willing to pursue aggressive action against bad actors in commercial lending.

What makes the Roglieri case particularly instructive for funders is that the fraud originated in the brokerage layer, a space where funders often have limited visibility into how deals are sourced and documentation is handled. As we explored in our analysis of how the Roglieri sentencing exposes wire fraud risk in MCA broker verification, funders who rely on brokers to handle bank verification are exposed to liability even when the fraud happens upstream. Regulators do not draw clean lines between broker misconduct and funder negligence when verification records are absent.

State-Level Regulatory Fragmentation Compounds the Problem

California's AB2116, New York's commercial finance disclosure law, Virginia's commercial lending disclosure requirements, and a growing list of state-level initiatives are creating a patchwork of obligations for MCA funders who operate across state lines. Each jurisdiction introduces slightly different documentation and transparency expectations. The common thread, however, is a demand for verifiable records that demonstrate how underwriting decisions were made.

For bank verification specifically, this means that a funder who simply notes "bank statements reviewed" in a file is no longer meeting the standard. Regulators want to see what was reviewed, when it was reviewed, who reviewed it, and whether the source material is authentic. The Consumer Financial Protection Bureau has signaled increased interest in merchant cash advance oversight at the federal level, adding another layer of potential scrutiny that makes defensible documentation essential.

Audit Trails Have Become Non-Negotiable

The shift from "nice to have" to "must have" for audit trails reflects a broader maturation of the MCA industry. Early-stage funders could operate with minimal documentation because regulators were focused elsewhere. That window is closing. Greenspoon Marder's webinar topics, while not yet fully disclosed, align with a pattern of advisory guidance that increasingly emphasizes documentation standards, record retention, and provable verification processes.

For underwriters, this creates a practical challenge. Traditional verification methods, particularly live phone calls where an applicant walks through their banking portal while an underwriter watches, produce almost no auditable record. The underwriter's notes are subjective. There is no video evidence, no timestamp of what screens were shown, and no way to prove after the fact what was actually verified. If a deal goes bad and a regulator asks how the bank data was confirmed, the funder has nothing to show beyond a handwritten note.

Building a Compliance-Ready Bank Verification Workflow

Structured Recording Over Phone Calls

The most direct way to create an auditable bank verification process is to replace live, unrecorded interactions with structured screen recordings. When an applicant records their banking portal session, the resulting video file serves as primary evidence of what was shown. Combined with timestamps and activity logs, this creates a verification record that can withstand regulatory review months or years after the funding decision.

Exact Balance was built around this exact principle. Applicants receive a secure link, record their banking session directly in the browser with no software installation required, and the recording is encrypted and uploaded to secure cloud storage. Every step is tracked: when the link was opened, when the recording started, when it was submitted, and when the underwriter reviewed it. This level of documentation transforms bank verification from a compliance liability into a compliance asset.

Custom Instructions Reduce Ambiguity

Regulatory scrutiny often focuses on whether the funder obtained the right information, not just any information. A recording that shows an applicant scrolling randomly through their banking portal provides limited compliance value. Custom instructions that specify exactly what needs to be shown, including account summaries, specific date ranges, transaction details, and balance confirmations, create a structured verification that directly maps to underwriting criteria.

This specificity matters when regulators ask pointed questions. "Did you verify the applicant's average daily balance for the prior 90 days?" is a question that a funder using custom-instructed recordings can answer definitively. A funder relying on a phone call cannot.

AI-Guided Recording Ensures Completeness

One of the persistent challenges with any applicant-driven verification process is incomplete submissions. An applicant who misunderstands what needs to be shown, or who skips a required step, creates gaps that delay underwriting and weaken compliance records. AI-powered guidance during the recording session addresses this problem at the source.

Exact Balance's guided recording mode uses a floating AI coach that walks applicants through each required step and verifies completion in real time. If an applicant skips a section or moves past a screen too quickly, the system flags it before submission. This approach reduces the re-recording rate and ensures that every verification submission contains the complete set of information the underwriter needs. From a compliance perspective, it means the audit trail reflects a thorough, structured review rather than a partial or rushed one.

Secure Storage and Access Controls

Compliance-ready verification does not end at the recording itself. How recordings are stored, who can access them, and how long they are retained all matter under emerging regulatory frameworks. Encrypted uploads, token-based access controls, and role-based dashboard permissions ensure that verification records meet data security standards that regulators increasingly expect from financial services providers.

This is an area where the Canadian government's consumer-driven banking framework is particularly relevant. As open banking standards evolve in Canada, funders will face new requirements around how financial data is accessed, stored, and documented. Building on a platform with enterprise-grade security from the start avoids the painful retrofit that funders using ad hoc verification methods will eventually face.

How Compliance Gaps Play Out in Real-World Scenarios

Consider a scenario that plays out regularly across the MCA industry. A funder approves a deal based on bank statements provided by a broker. Six months later, the merchant defaults. The funder discovers that the bank statements were altered, showing inflated deposits that never existed. The funder attempts to recover from the broker's insurance or pursue legal action, but without a verification record showing what was actually in the merchant's live banking portal at the time of underwriting, the case is difficult to prove.

Now consider the same scenario with an asynchronous verification recording in place. The funder has a timestamped video of the applicant's live banking session, recorded at the time of application. The recording clearly shows the real account activity. The discrepancy between the broker-provided statements and the live banking data is documented and indisputable. This is the difference between a compliance gap and a compliance asset.

The pattern extends beyond fraud. Regulators conducting routine examinations increasingly ask funders to demonstrate their verification process for a sample of funded deals. Funders who can produce recordings, activity logs, and timestamped review notes for any deal in their portfolio are positioned to pass these examinations cleanly. Those who rely on phone-based verification or manual statement review often cannot reconstruct what happened months after the fact. As we discussed in our piece on common mistakes MCA companies make with bank verification early on, many funders do not realize the severity of these documentation gaps until they face an audit or a loss.

The regulatory trajectory is clear. Mid-2026 guidance from firms like Greenspoon Marder is not introducing new concepts so much as formalizing expectations that have been building for years. Funders who adapt their verification workflows now will be ahead of the curve. Those who wait will find themselves scrambling to retrofit compliance into processes that were never designed for it.

Frequently Asked Questions

What audit trail should MCA funders maintain for bank verification?

MCA funders should maintain a complete record of every bank verification interaction, including timestamped recordings of banking portal reviews, activity logs showing when links were sent and opened, records of who conducted the review, and secure storage of all supporting materials. This level of documentation protects funders during regulatory examinations, legal disputes, and internal compliance reviews. Platforms like Exact Balance generate this audit trail automatically with every verification request.

How does asynchronous bank verification improve compliance for MCA lenders?

Asynchronous bank verification improves compliance by creating a permanent, reviewable record of what was shown during the verification process. Unlike live phone calls, which produce no objective evidence, screen recordings capture the applicant's actual banking portal in real time. Combined with encrypted storage, activity tracking, and custom verification instructions, async workflows give funders defensible documentation that meets evolving regulatory standards.

Why are regulators increasing their focus on MCA verification processes?

Regulators are increasing focus on MCA verification for several reasons: high-profile fraud cases like the Kris Roglieri prosecution have highlighted weak points in the broker-to-funder pipeline, state legislatures are passing new commercial finance disclosure laws, and federal agencies like the CFPB have signaled interest in merchant cash advance oversight. These forces are converging to create an environment where undocumented or informal verification practices carry significant legal and regulatory risk.

Can screen recordings of banking portals replace live verification calls for compliance purposes?

Screen recordings can more than replace live verification calls for compliance purposes; they actually provide stronger evidence. A live call produces no objective record beyond the underwriter's notes, while a screen recording captures exactly what was displayed in the banking portal, when it was recorded, and how long each screen was visible. Regulators and auditors consistently favor documented evidence over subjective recollections, making screen recordings a superior compliance tool.

Conclusion

The regulatory updates signaled by Greenspoon Marder's April 2026 webinar are part of a larger trend that every MCA funder needs to take seriously. Compliance is no longer about checking a box; it requires verifiable, auditable evidence at every stage of the underwriting process, starting with bank verification. Funders who rely on undocumented phone calls or unstructured statement reviews are building their portfolios on a foundation that regulators are actively working to undermine.

Exact Balance gives funders the documentation infrastructure they need to meet these evolving standards. Asynchronous screen recordings, AI-guided verification steps, encrypted storage, and complete activity tracking create a compliance-ready workflow that accelerates deal velocity instead of slowing it down. Visit exactbalance.ca to see how async bank verification fits into your compliance strategy.