PNC Financial Services Refusal to Pay PPP Agents Class Action

The Paycheck Protection Program (PPP) was administered by the Small Business Administration (SBA) with funds distributed by ordinary lenders. Included in the PPP funds were origination fees for the lenders out of which they were to pay fees to agents who helped complete the applications. The complaint for this class action alleges that PNC Financial Services Group, Inc. has refused to pay agents and kept the money instead.

The class for this action is all persons and businesses in the US who served as agents for, and provided assistance to, a client for the preparation or submission of a client’s PPP loan application to PNC Financial Services Group which resulted in a loan being funded under PPP. An Illinois subclass has also been defined.

The PPP was part of the CARES Act, which was designed to relieve some of the hardship of the coronavirus pandemic and the resulting disruptions of business. Its purpose was to provide loans to small businesses that could be used to pay employees. The loans were guaranteed by the federal government.

The funds for the program were to be distributed on a first come, first served basis, so the applications had to be completed quickly. Lenders were not required to verify information; the small businesses were required to provide truthful and accurate information within a limited time.

Congress recognized that small businesses were likely to need help preparing the applications, from accountants, tax preparers, attorneys, or other such professionals, so it provided for fees for these agents to be paid from the lender’s origination fee. The SBA’s regulations said, “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.”

For loans under $350,000, for example, the lender would receive 5% of the loan amount, and it was to pay the agents 1% from this fee.

This arrangement was intended to prevent businesses that were already having financial difficulties from having to pay a significant amount of money to access a PPP loan.

The complaint alleges, “PNC has reported more than 74,000 approved PPP applications totaling over $14 billion in loans. Accordingly, PNC garnered hundreds of millions of dollars in origination fees, from which it is required to pay agents who assisted the borrowers in preparing and submitting applications.”

However, it says, “PNC has refused to pay the agents. This refusal is a company-wide policy.” This is explicated stated on the website page with information about PPP loans: “PNC will not pay Agents for assistance they may provide an applicant in obtaining a PPP loan.” The complaint thus alleges that PNC has decided to keep all the money for itself.

The counts include violations of Illinois state law, conversion, and quantum meruit, among other things.

Article Type: Lawsuit
Topic: Government Programs or Benefits

Most Recent Case Event

PNC Financial Services Refusal to Pay PPP Agents Class Action

June 16, 2020

The Paycheck Protection Program (PPP) was administered by the Small Business Administration (SBA) with funds distributed by ordinary lenders. Included in the PPP funds were origination fees for the lenders out of which they were to pay fees to agents who helped complete the applications. The complaint for this class action alleges that PNC Financial Services Group, Inc. has refused to pay agents and kept the money instead.

PNC Financial Services Refusal to Pay PPP Agents Class Action

Case Event History

PNC Financial Services Refusal to Pay PPP Agents Class Action

June 16, 2020

The Paycheck Protection Program (PPP) was administered by the Small Business Administration (SBA) with funds distributed by ordinary lenders. Included in the PPP funds were origination fees for the lenders out of which they were to pay fees to agents who helped complete the applications. The complaint for this class action alleges that PNC Financial Services Group, Inc. has refused to pay agents and kept the money instead.

PNC Financial Services Refusal to Pay PPP Agents Class Action
Tags: Covid-19 Related, Failure to Pay for Work or Services Rendered