Bank of America and Other Banks Refuse to Pay PPP Agent Fees Class Action

A number of class actions have been filed recently by parties who acted as agents for applications to the Paycheck Protection Program (PPP), but who claim they have not been paid by the banks involved. This is one of those, filed by plaintiff Fisher, PA against a long list of lenders: Bank of America, NA, Bank of America Corporation, Fifth Third Bank, Fifth Third Bancorp, First Citizens Bancshares, First Citizens Bank & Trust Company, Truist Financial Corporation, Wells Fargo & Co., Wells Fargo Bank, NA, Community First Bank, Inc. and Community First Bancorp, Inc.

The class for this action includes all agents who assisted a business in preparing an application for a PPP loan under the CARES Act.

The PPP was part of the CARES (Coronavirus Aid, Relief, and Economic Security) Act. Because of closures and stay-at-home orders, many businesses lost money. The CARES Act aimed to relieve some of this financial pressure. The PPP provided funds for forgivable loans to small businesses so that they could continue to have cashflow for a period of eight weeks.

The program is administered by the Small Business Administration (SBA) and the Treasury, with the funds distributed through banks and other established lenders.

Banks did not have to verify the information on the applications. Instead, the small businesses were to submit accurate applications with certifications and other documentation, prepared with the help of agents. However, since the small businesses were already likely to be in financial difficulties, they were not to pay the agents themselves.

According to the complaint, “The SBA Regulations allow for and set standards by which PPP Agents are to be paid for their work. Specifically, the regulations require that PPP Agents be paid from a portion of the set fees provided to SBA Lender for processing the PPP Loan.”

The complaint alleges that lenders are “generously compensated for processing PPP loans … based on the amount of the funded PPP loans.” For loans of $350,000 or less, for example, they would be paid 5% of the loan amount. However, some of that fee was to go to the agent who had prepared the application.

The complaint quotes the CARES Act as saying, “Agent fees will be paid by the lender out of the fees the lender receives from the SBA. Agents may not collect the fees from the borrower or be paid out of the PPP loan proceeds.” For loans of $350,000 or less, for example, they are to be paid 1% of the loan amount. That 1% is supposed to come out of the lender’s 5% fee.

Plaintiff Fisher helped small businesses to compile applications to submit to the defendant banks in this case. However, it has not been paid for these services. In fact, the complaint says that Bank of America and Bank of America Corporation have publicly stated that they are not paying agent fees. The complaint therefore asks for remedies from this class action.

Article Type: Lawsuit
Topic: Government Programs or Benefits

Most Recent Case Event

Bank of America and Other Banks Refusal to Pay PPP Agent Fees Complaint

July 21, 2020

A number of class actions have been filed recently by parties who acted as agents for applications to the Paycheck Protection Program (PPP), but who claim they have not been paid by the banks involved. This is one of those, filed by plaintiff Fisher, PA against a long list of lenders: Bank of America, NA, Bank of America Corporation, Fifth Third Bank, Fifth Third Bancorp, First Citizens Bancshares, First Citizens Bank & Trust Company, Truist Financial Corporation, Wells Fargo & Co., Wells Fargo Bank, NA, Community First Bank, Inc. and Community First Bancorp, Inc.

Bank of America and Other Banks Refusal to Pay PPP Agent Fees Complaint

Case Event History

Bank of America and Other Banks Refusal to Pay PPP Agent Fees Complaint

July 21, 2020

A number of class actions have been filed recently by parties who acted as agents for applications to the Paycheck Protection Program (PPP), but who claim they have not been paid by the banks involved. This is one of those, filed by plaintiff Fisher, PA against a long list of lenders: Bank of America, NA, Bank of America Corporation, Fifth Third Bank, Fifth Third Bancorp, First Citizens Bancshares, First Citizens Bank & Trust Company, Truist Financial Corporation, Wells Fargo & Co., Wells Fargo Bank, NA, Community First Bank, Inc. and Community First Bancorp, Inc.

Bank of America and Other Banks Refusal to Pay PPP Agent Fees Complaint
Tags: Covid-19 Related, Failure to Pay for Work or Services Rendered, Provisions of Government Programs