ServisFirst, Synovus Refusal to Pay PPP Loan Agents Florida Class Action

The Paycheck Protection Program (PPP) is a government effort to aid business during the coronavirus pandemic by providing funds to keep them from laying off workers. The complaint for this class action, however, alleges that PPP lenders such as defendants ServisFirst Bank, Inc. and Synovus Trust Company, NA are not paying the CPA firms, attorneys, and others who help with the loans.

The class for this action is all PPP agents in Florida who helped PPP lenders’ bank customers to obtain PPP loans but were refused payment of their fees by the PPP lender.

The PPP is administered by the Small Business Administration (SBA). Loans made under the PPP may be forgiven if the borrower does not lay off employees during the period of maximum economic difficulty during the current pandemic. Lenders who process the PPP loans receive a processing fee that’s a percentage of each loan.

Some businesses needed help from accountants, attorneys, or other financial professionals to prepare and file their PPP loan applications. These helpers are termed PPP agents. The complaint says, “To incentivize PPP Agents to provide such assistance to the Bank Customers so that the Bank Customers could successfully apply for and obtain PPP loans … the PPP mandates that the PPP ‘Agent fees will be paid by the lender out of the fees the lender receives from the SBA.’”

“Conversely,” the complaint says, “to ensure that the PPP loans proceeds were used only for their intended purpose, viz., to protect the paychecks of the employees of the small businesses, the PPP further provides that PPP ‘Agents may not collect fees from the borrower or be paid out of the PPP loan proceeds.’”

However, the complaint claims that some lenders, including defendants ServisFirst and Synovus in this case, have refused to pay the agents. For example, when one company asked ServisFirst to pay its agent, the complaint says ServisFirst responded, “The SBA guidance on charging the client fees changed late in the game. The Bank has made a decision not to pay agents.” The complaint alleges that the statement about the guidance “changing” is “false and misleading.”

According to the complaint, this refusal to pay is “unjust and un-American” and unfairly discriminates against the kinds of small businesses that Congress intended to help.

The complaint quotes from the act that authorized the PPP: “It is the sense of the Senate that the Administrator should issue guidance to lenders and agents to ensure that the processing and disbursement of covered loans prioritizes small business concerns and entities in underserved and rural markets, including veterans and members of the military community, small business concerns owned and controlled by socially and economically disadvantaged individuals…, women, and businesses in operation for less than 2 years.”

The complaint’s counts include unjust enrichment and violations of Florida’s Unfair and Deceptive Trade Practices Act.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

ServisFirst, Synovus Refusal to Pay PPP Loan Agents Florida Complaint

April 26, 2020

The Paycheck Protection Program (PPP) is a government effort to aid business during the coronavirus pandemic by providing funds to keep them from laying off workers. The complaint for this class action, however, alleges that PPP lenders such as defendants ServisFirst Bank, Inc. and Synovus Trust Company, NA are not paying the CPA firms, attorneys, and others who help with the loans.

ServisFirst, Synovus Refusal to Pay PPP Loan Agents Florida Complaint

Case Event History

ServisFirst, Synovus Refusal to Pay PPP Loan Agents Florida Complaint

April 26, 2020

The Paycheck Protection Program (PPP) is a government effort to aid business during the coronavirus pandemic by providing funds to keep them from laying off workers. The complaint for this class action, however, alleges that PPP lenders such as defendants ServisFirst Bank, Inc. and Synovus Trust Company, NA are not paying the CPA firms, attorneys, and others who help with the loans.

ServisFirst, Synovus Refusal to Pay PPP Loan Agents Florida Complaint
Tags: Provisions of Government Programs, Refusal to Pay, Your Bank