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Wells Fargo Rejection of Qualified PPP Applications New Mexico Class Action

The CARES Act and its Paycheck Protection Program (PPP) was intended to bring help to small businesses “in a fair, equitable and uniform manner,” says the complaint for this class action. But Wells Fargo Bank, NA, it says, “unlawfully prioritized its existing business clients” over others who also needed the loans offered by the program, possibly blocking them from access to the program.

The class for this action is all consumers in New Mexico who applied for or attempted to apply for PPP loans through Wells Fargo during the applicable limitations, for their personal use, rather than for resale or distribution.

CARES was a $2 trillion stimulus in response to the Covid-19 pandemic and its closures of businesses around the country. One of its programs, the PPP, permitted lenders to make available billions in government-guaranteed loans so that businesses could go on paying their workers for eight more weeks. Many of these loans were always intended to be forgiven. The loans were to be given through lenders like Wells Fargo.

The complaint alleges that Wells Fargo “denied access” to these loans to small businesses that did not have a commercial banking relationship with it or that were at higher risk of default. The complaint claims this happened with the plaintiff in this case, Yohanna Gerges, even though he met the criteria for the PPP program and even though he’d had a relationship with Wells Fargo for more than ten years.

The complaint alleges, “Wells Fargo’s purpose and motivation behind its discriminatory practice is transparent—it is prioritizing its balance sheet by supporting preexisting customers it deems to be a good risk” at the expense of others who did not have the same kind of relationship or that it did not find to be a good risk.

Gerges and his business met the eligibility requirements for the PPP and qualified for a PPP loan. However, the complaint says, he was ineligible to apply for a PPP loan under Wells Fargo’s self-declared criterion that created an impermissible restriction upon, and violated, the CARES Act.

The complaint alleges, “Wells Fargo’s discriminatory practices are abhorrent and in violation of federal law. In this time of critical and severe national need that the U.S. Government recognized and immediately acted upon, Wells Fargo’s discriminatory practices can only be described as corporate greed, highly offensive and illegal.”

The counts include violations of the CARES Act and the SBA’s 7(a) loan program, among other things.

Article Type: Lawsuit
Topic: Government Programs or Benefits

Most Recent Case Event

Wells Fargo Rejection of Qualified PPP Applications New Mexico Complaint

August 23, 2021

The CARES Act and its Paycheck Protection Program (PPP) was intended to bring help to small businesses “in a fair, equitable and uniform manner,” says the complaint for this class action. But Wells Fargo Bank, NA, it says, “unlawfully prioritized its existing business clients” over others who also needed the loans offered by the program, possibly blocking them from access to the program.

Wells Fargo Rejection of Qualified PPP Applications New Mexico Complaint

Case Event History

Wells Fargo Rejection of Qualified PPP Applications New Mexico Complaint

August 23, 2021

The CARES Act and its Paycheck Protection Program (PPP) was intended to bring help to small businesses “in a fair, equitable and uniform manner,” says the complaint for this class action. But Wells Fargo Bank, NA, it says, “unlawfully prioritized its existing business clients” over others who also needed the loans offered by the program, possibly blocking them from access to the program.

Wells Fargo Rejection of Qualified PPP Applications New Mexico Complaint
Tags: Covid-19 Related, Provisions of Government Programs