Bank of America Refusal to Pay PPP Agent Fees Class Action

The Coronavirus Aid, Relief, and Economic Security (CARES) Act to help businesses and individuals weather the initial part of the Covid-19 pandemic. The CARES Act included something called the Paycheck Protection Program (PPP) which was designed to provide forgivable loans to small businesses. However, the complaint for this class action alleges that Bank of America is not following the rules for PPP lenders, in that it refuses to pay agent fees due for assistance with PPP applications.

The class for this action is all persons and entities in the US who were agents for persons or entities who applied for and received PPP loans through Bank of America and who were not paid an agent fee by Bank of America.

The PPP was intended to provide money for small businesses to keep paying their employees for a period of time. The program was administered by the Small Business Administration (SBA) and the money was funneled through banks and other lenders.

According to the complaint, “Lenders were … required to certify under penalty of perjury that they were in compliance, and would remain in compliance, with PPP regulations.” They were to begin accepting applications on April 3, 2020.

Because the money had to be available quickly, the lenders were not required to verify the information the information on the applications from the small businesses. In place of this, the businesses were required to make certain attestations and certifications, with civil and criminal penalties for false statements.

The complaint says, “Congress understood that in order to be able to make timely, truthful, and accurate representations in their PPP applications, many small businesses applying for PPP funding would rely on the assistance and expertise of professionals: accountants, bookkeepers, tax preparers, financial advisors, attorneys, and other such agents…”

The PPP provided that agents would be paid a fixed percentage of the loan amount. For example, with loans of less than 350,000, agents would be paid 1% of the loan amount. Lenders were also to receive fixed percentage fees, for example, 5% of loans of less than $350,000, and the agents’ fee was to come out of this origination fee.

The complaint says, “The PPP Regulations expressly require that Agent Fees be paid by the lending institution out of the origination fees the lender would receive from the SBA, and prohibit Agents from collecting fees from applicants or taking fees from the PPP loans.”

The complaint estimates that Bank of America has received something like $240 million in origination fees. However, the complaint alleges that the bank is now refusing to pay the agents.

The plaintiff in this case, Francis Lopez, is a bookkeeper who assisted a client in preparing a loan application. Bank of America, which processed the loan, is refusing to pay him.

The complaint alleges conversion and money had and received, among other things.

Article Type: Lawsuit
Topic: Government Programs or Benefits

Most Recent Case Event

Bank of America Refusal to Pay PPP Agent Fees Complaint

June 24, 2020

The Coronavirus Aid, Relief, and Economic Security (CARES) Act to help businesses and individuals weather the initial part of the Covid-19 pandemic. The CARES Act included something called the Paycheck Protection Program (PPP) which was designed to provide forgivable loans to small businesses. However, the complaint for this class action alleges that Bank of America is not following the rules for PPP lenders, in that it refuses to pay agent fees due for assistance with PPP applications.

Bank of America Refusal to Pay PPP Agent Fees Complaint

Case Event History

Bank of America Refusal to Pay PPP Agent Fees Complaint

June 24, 2020

The Coronavirus Aid, Relief, and Economic Security (CARES) Act to help businesses and individuals weather the initial part of the Covid-19 pandemic. The CARES Act included something called the Paycheck Protection Program (PPP) which was designed to provide forgivable loans to small businesses. However, the complaint for this class action alleges that Bank of America is not following the rules for PPP lenders, in that it refuses to pay agent fees due for assistance with PPP applications.

Bank of America Refusal to Pay PPP Agent Fees Complaint
Tags: Covid-19 Related, Failure to Pay for Work or Services Rendered