How Christopher Murray's Broker Fair Talk Shapes MCA Underwriting Best Practices

MCA Litigation Is Rising, and Underwriting Documentation Is the Battleground

Christopher Murray is set to take the stage at Broker Fair 2026 with a session titled "Don't Get Sued in Merchant Cash Advance," and the timing could not be sharper. As deBanked reported, Murray's presentation will focus squarely on the legal exposure that MCA lenders and brokers face when their processes lack rigor. For anyone in the alternative lending space, this is a signal worth paying attention to.

MCA underwriting best practices are no longer just about making better credit decisions. They are about building a legal fortress around every deal you fund. Plaintiff attorneys have learned that the fastest path to a settlement is not arguing about factor rates or holdback percentages. It is proving that the funder failed to verify what they claimed to verify. That the bank statements were never properly reviewed. That the application data was manually keyed and riddled with errors. That nobody can produce a clear record of what was checked, when, and by whom.

This article breaks down why litigation risk is now an underwriting problem, what Murray's session signals about where the industry is headed, and exactly how funders should restructure their bank verification workflows to stay protected.

Why MCA Lawsuits Increasingly Target Underwriting Gaps

The Shift From Rate Disputes to Process Failures

Early MCA litigation centered on whether advances constituted loans, whether factor rates were usurious, and whether merchants understood what they signed. Those arguments still surface, but a more dangerous trend has emerged. Attorneys now argue that funders were negligent in their underwriting, that they funded merchants who clearly could not support the daily holdback, and that a reasonable review of the bank statements would have flagged the deal as unsustainable.

This reframing matters because it shifts the burden. Instead of debating contract terms, the funder must now prove that their underwriting process was sound. That means producing documentation. And for many shops running on spreadsheets, email threads, and manually entered data, that documentation simply does not exist in a form that survives legal discovery.

Discoverable Gaps in Manual Processes

When a plaintiff's attorney subpoenas your underwriting file, they are looking for inconsistencies. Did the bank statement totals match what was entered into your system? Were all three months of statements actually reviewed, or did someone skip the second month because the PDF was blurry? Was the business name on the bank statement consistent with the application? These are the questions that turn a routine dispute into a six-figure settlement.

Manual data entry is the root cause. A human keying in average daily balances from a 90-page bank statement PDF will make errors. Those errors become ammunition. As we explored in our analysis of how the NACLB fraud sentencing exposes gaps in MCA underwriting, the industry has repeatedly seen cases where sloppy documentation practices enabled fraud or created liability that could have been avoided.

The Audit Trail as a Legal Shield

The funders who win in litigation are the ones who can produce a complete, timestamped record of every document received, every data point extracted, and every decision made. This is not optional anymore. In 2026, regulators and courts expect digital records. The Consumer Financial Protection Bureau has increasingly scrutinized alternative lenders, and state attorneys general have followed suit. A funder who can show that their bank verification process is automated, auditable, and consistent across every deal stands on vastly stronger legal ground than one who relies on an underwriter's memory and a folder of unmarked PDFs.

Building a Defensible Bank Verification Workflow

Structured Intake Eliminates Ambiguity

The first vulnerability in most MCA underwriting pipelines is intake. Documents arrive via email attachments, sometimes forwarded from brokers, sometimes sent directly by merchants. There is no consistent record of when a document was received, whether it was the complete set, or who touched it first. This ambiguity is exactly what litigators exploit.

A structured intake process, where every document is uploaded through a secure portal with automatic timestamping, eliminates this problem at the source. When a merchant uploads their bank statements through a dedicated link, the system records the upload time, the file metadata, and the source. If a broker forwards documents via email, a dedicated inbox captures and logs them with the same rigor. Either way, the chain of custody is unbroken from the moment the document enters your pipeline.

AI-Powered Extraction Reduces the Human Error That Creates Liability

Once documents are in the system, the next risk is misinterpretation. Manual review of bank statements is inherently error-prone. An underwriter scanning dozens of pages might miscalculate average daily balances, miss a negative day, or overlook a large return that skews the revenue picture. These mistakes do not just lead to bad credit decisions. They create discoverable inconsistencies that undermine the funder's credibility in court.

AI-powered extraction addresses this by parsing bank statements programmatically. Transaction-level data is categorized, totals are computed consistently, and the extracted figures are tied directly to the source document. If a dispute arises six months later, the funder can show exactly which page of which PDF produced each data point. There is no ambiguity about what the underwriter "should have seen" because the system saw everything and recorded it.

Let's Submit's AI extraction engine is purpose-built for this use case. It pulls business information, financial data, and owner details from uploaded documents automatically, then presents the results for human review and editing. The combination of machine precision and human oversight is precisely what regulators and courts consider a reasonable process.

Real-Time Status Tracking Proves Diligence

Beyond extraction, funders need to demonstrate that they acted on the information they received. A deal that sat in "documents uploaded" status for two weeks before anyone reviewed it suggests negligence. A deal that moved from "application received" to "extracting data" to "ready for review" within hours, with each status change logged, tells a very different story.

Real-time application tracking creates this narrative automatically. Every status transition is recorded. Every team member who touches the file leaves a trace. This is not just operational hygiene. It is litigation insurance. As we discussed in our piece on how MCA lawsuit risk shapes bank verification software for funders, the funders who invest in process infrastructure before they get sued are the ones who avoid the worst outcomes.

What Murray's Broker Fair Session Means for Your Operation

Christopher Murray is not giving a theoretical lecture. He is responding to a wave of litigation that has already reshaped how sophisticated funders operate. The fact that Broker Fair dedicated a session to "Don't Get Sued" reflects a market-wide recognition that legal risk is now a core operational concern, not a back-office afterthought.

For funders and ISOs attending the conference, the takeaway should be immediate and practical. Look at your current bank verification workflow and ask three questions. First, can you produce a complete, timestamped record of every document you received for a funded deal? Second, can you show that the financial data you relied on was extracted consistently and accurately, not hand-keyed by a junior analyst at 11 PM? Third, can you demonstrate that your team reviewed the extracted data within a reasonable timeframe and flagged anomalies before funding?

If the answer to any of these is no, you have a gap that a plaintiff's attorney will eventually find. The Nicole Cruz interview on deBanked, which covered speed to lead and running an ISO shop, reinforced that the best brokerages are the ones moving fastest. But speed without documentation is reckless. The funders who win are the ones who move fast and leave a clean trail.

Consider how this connects to the broader market. Pipe just revealed it originated $300 million in MCAs over the last two years across 15,000 merchants. At that volume, manual verification is not just inefficient. It is a liability multiplier. Every deal funded without proper documentation is a potential lawsuit. Scale demands automation, and automation demands the right infrastructure.

Frequently Asked Questions

What are MCA underwriting best practices for avoiding lawsuits?

MCA underwriting best practices for litigation protection center on documentation, consistency, and auditability. Every bank statement should be captured through a structured intake process with timestamps. Financial data should be extracted using AI rather than manual entry to ensure accuracy and traceability. Every status change in the application pipeline should be logged automatically. The goal is to produce a defensible record that shows exactly what was reviewed, when, and by whom for every funded deal.

How does bank verification software protect MCA funders against litigation?

Bank verification software creates an unbroken chain of custody for every document in the underwriting file. When a plaintiff's attorney argues that the funder failed to properly review bank statements, the funder can produce system-generated records showing the exact time documents were received, the data points extracted, and the review decisions made. This level of documentation makes negligence claims far harder to sustain and often prevents lawsuits from being filed in the first place.

Why is manual bank statement review a legal risk for MCA lenders?

Manual bank statement review introduces transcription errors, missed pages, and inconsistent calculations. These errors become discoverable evidence in litigation. A plaintiff can compare the hand-entered data in the underwriting file to the actual bank statement and highlight every discrepancy as proof of negligence. AI-powered extraction eliminates this category of risk by tying every extracted data point directly to its source document with machine-level consistency.

What should MCA funders do before Broker Fair 2026 to reduce legal exposure?

Before Broker Fair 2026, funders should audit their current bank verification workflow for three specific gaps: document intake logging, extraction accuracy, and review tracking. Any deal where you cannot produce a timestamped, complete record of what was received and reviewed is a potential liability. Migrating to an async bank verification platform with AI extraction and built-in audit trails is the most direct way to close these gaps before they become legal problems.

Conclusion

Christopher Murray's Broker Fair session is a clear signal that litigation risk has moved from the periphery to the center of MCA operations. Funders who treat bank verification as a checkbox exercise are exposed. Those who build defensible, automated workflows with complete audit trails are protected.

The path forward is not complicated. Structured document intake, AI-powered extraction, and real-time status tracking solve the documentation gaps that plaintiff attorneys exploit. Let's Submit was built for exactly this scenario: async bank verification that captures every document, extracts every data point, and logs every action from submission to approval.

Visit letssubmit.ca to see how a defensible verification workflow fits into your operation before the next lawsuit lands on your desk.