JPMorgan Chase Prioritized PPP Applications of Favored Customers Class Action

The complaint for this class action alleges that JPMorgan Chase prioritized larger or more favored companies when processing applications for the Paycheck Protection Program (PPP), against the government’s first-come, first-served intention. The result, it says, was a small company’s failure to get a PPP loan.

The class for this action is all Chase Business Banking account holders that met the criteria for receiving a loan under the PPP, applied for, or tried to apply for, a PPP loan through Chase, and whose application was not processed on a first-come, first-served basis.

Small businesses have suffered enormously due to efforts to curb the spread of Covid-19. Congress instituted the PPP to help small businesses pay their employees and continue to survive for a period of time. The program was administered by the Small Business Administration (SBA) and the Treasury. Banks and other lenders were to process applications and distribute funds.

Lenders began accepting loans on April 3, 2020. They would receive a percentage of the loan amount as an origination fee.

The complaint says, “A key piece of the PPP was that applications be opened and funds be distributed on a ‘first-come, first-served’ basis” with applications being processed in the order in which they were received.

The complaint alleges that Chase knew that the fund could run dry before all applications were processed. Because of this, the complaint says, Chase prioritized the applications of its favored customers first, leaving the rest for later.

The complaint quotes the New York Times as saying, “At Chase, … nearly all private and commercial banking clients who applied for a small-business loan got one, whereas only one out of every 15 retail banking customers who sought loans was successful.”

The complaint alleges that some customers got special treatment that allowed them to “cut the line” and submit applications earlier than they would otherwise have been able to, and “put stumbling blocks” in the way of non-favored applicants.

A chart in the complaint demonstrates that “Chase processed loan applications for $150,000 or less at a far faster clip during the final three days of the original PPP loan fund’s solvency.” The favored customers with larger loans, it suggests, had had their applications processed first.

The plaintiff in this case, Ajira AI, LLC, submitted an application of a loan for less than $30,000 on April 7, 2020. Ten days later, it received a message from Chase saying that the PPP had run out of funds.

When it seemed that the government was going to put more funds into the program, Chase sent Ajira another message on April 21, asking the company to clarify its payroll documentation. Ajira provided the documentation on the same day. However, Ajira’s application for a loan was rejected on April 23 “due to Chase’s purported (and incorrect) inability to verify Ajira AI’s payroll documentation.”

Article Type: Lawsuit
Topic: Government Programs or Benefits

Most Recent Case Event

JPMorgan Chase Prioritized PPP Applications of Favored Customers Complaint

July 29, 2020

The complaint for this class action alleges that JPMorgan Chase prioritized larger or more favored companies when processing applications for the Paycheck Protection Program (PPP), against the government’s first-come, first-served intention. The result, it says, was a small company’s failure to get a PPP loan.

JPMorgan Chase Prioritized PPP Applications of Favored Customers Complaint

Case Event History

JPMorgan Chase Prioritized PPP Applications of Favored Customers Complaint

July 29, 2020

The complaint for this class action alleges that JPMorgan Chase prioritized larger or more favored companies when processing applications for the Paycheck Protection Program (PPP), against the government’s first-come, first-served intention. The result, it says, was a small company’s failure to get a PPP loan.

JPMorgan Chase Prioritized PPP Applications of Favored Customers Complaint
Tags: Covid-19 Related, Provisions of Government Programs