JPMorgan Chase Refusal to Pay PPP Agent Fees Class Action

The Paycheck Protection Program (PPP) was designed to provide forgivable loans to small businesses to help them continue to pay employees through the beginning of Covid-19 business closures. The PPP also designated funds for agents to help small businesses prepare applications. However, the complaint for this class action alleges that JPMorgan Chase Bank, NA and JPMorgan Chase & Co. are refusing to pay the agents who did this work.

The class for this action is all persons and businesses in the US who served as an agent in helping prepare or submit a client’s PPP loan application to Chase Bank which resulted in a loan being funded under that program.

The PPP program was to be administered by the Small Business Administration (SBA). The loans would be made by banks and other lenders. For this, they were to receive an origination fee, calculated as a percentage of the loan amount. For example, for loans under $350,000 they were to receive 5% of the amount of the loan.

Congress recognized that the small businesses would need the help of accountants, attorneys, or other agents. However, the funds had to be gotten to businesses quickly, without the delays that would be caused by negotiating fees. Also, it didn’t make sense for already-strained businesses to have to pay fees for applications for relief.

It was therefore decided that agents would be paid out of the fee paid to the bank. This For example, for loans under $350,000, the agent would receive 1% of the amount of the loan.

The SBA’s PPP Regulations put this in writing: “Agent fees will be paid by the lender out of the fees the lender receives from SBA. Agents may not collect fees from the borrower or be paid out of the PPP loan proceeds.” An Information Sheet for Lenders also states, “The lender will pay the agent.”

Chase is the largest national bank in the US. The complaint alleges that they processed 239,000 applications resulting in over $29 billion in loans. It estimates that Chase “garnered hundreds of millions of dollars in origination fees” but are now refusing to pay agents. The complaint points out that Chase has been sued by other agents as well for their refusal to pay agents.

The complaint alleges violations of New York’s General Business Law in the area of deceptive acts or practices. It also alleges conversion, unjust enrichment, and misappropriation.

Article Type: Lawsuit
Topic: Government Programs or Benefits

Most Recent Case Event

JPMorgan Chase Refusal to Pay PPP Agent Fees Complaint

June 24, 2020

The Paycheck Protection Program (PPP) was designed to provide forgivable loans to small businesses to help them continue to pay employees through the beginning of Covid-19 business closures. The PPP also designated funds for agents to help small businesses prepare applications. However, the complaint for this class action alleges that JPMorgan Chase Bank, NA and JPMorgan Chase & Co. are refusing to pay the agents who did this work.

JPMorgan Chase Refusal to Pay PPP Agent Fees Complaint

Case Event History

JPMorgan Chase Refusal to Pay PPP Agent Fees Complaint

June 24, 2020

The Paycheck Protection Program (PPP) was designed to provide forgivable loans to small businesses to help them continue to pay employees through the beginning of Covid-19 business closures. The PPP also designated funds for agents to help small businesses prepare applications. However, the complaint for this class action alleges that JPMorgan Chase Bank, NA and JPMorgan Chase & Co. are refusing to pay the agents who did this work.

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