Zions Bancorporation Fees Owed to PPP Agents Class Action

The Paycheck Protection Program (PPP) provided funds for small businesses to keep going and keep paying employees during the Covid-19 pandemic. It also provided funds for the banks that process the applications and, out of their fees, for agents who help the small businesses prepare the applications. However, the complaint for this class action alleges that Zions Bancorporation, NA has refused to pay agents according to the provisions in the PPP.

The class for this action is all persons and businesses who served as agents in relation to, and provided assistance to a client in relation to, the preparation or submission of a PPP loan application to Zions which resulted in a loan being funded under the PPP. A California subclass has also been defined.

Congress passed the PPP for quick relief to small business owners during the Covid-19 shutdowns. To get the money to where it was needed quickly, lenders were not required to verify the information in the applications. The small businesses themselves would be responsible for the accuracy of the applications.

The applications would therefore need “a number of representations and certifications, and specific warnings” about the penalties for failing to provide true and accurate information. Small business owners were therefore likely to need assistance in preparing the applications from people such as accountants, attorneys, or other types of agents.

The PPP was supposed to operate on a first come, first served basis, so applications had to be completed and submitted promptly.

Once a loan was approved, the complaint says, “lenders would be compensated in the form of a generous origination fee paid by the federal government, with the requirement that the lender would be responsible for paying the fee owed to the loan applicant’s agent” who’d helped prepare the application. “Both the lender and the agent were specifically forbidden by the PPP from charging the small business borrower any amounts for the loan or the assistance in preparing the application for the loan.”

Amounts were set by the law. For example, for loans up to $350,000, the lender would receive a 5% origination fee; the agent who’d helped prepare the application would receive 1%, which would come out of that 5%.

Zions is a holding company that does business under a number of bank names, including Amegy Bank of Texas, California Bank and Trust, National Bank of Arizona, Nevada State Bank, Vectra Bank of Colorado, Zions Bank, and Zions Direct.

The complaint alleges that these institutions have processed many loans for PPP and that they have been paid something around $282 million in origination fees. However, the complaint says, “based on information and belief” they “have refused to pay the agents who assisted PPP loan recipients with their applications.” The complaint alleges that this refusal to pay was deliberate and planned as they “did not set up a structure or ask any questions to determine whether borrowers utilized an agent in completing applications.”

Article Type: Lawsuit
Topic: Government Programs or Benefits

Most Recent Case Event

Zions Bancorporation Fees Owed to PPP Agents Complaint

June 9, 2020

The Paycheck Protection Program (PPP) provided funds for small businesses to keep going and keep paying employees during the Covid-19 pandemic. It also provided funds for the banks that process the applications and, out of their fees, for agents who help the small businesses prepare the applications. However, the complaint for this class action alleges that Zions Bancorporation, NA has refused to pay agents according to the provisions in the PPP.

Zions Bancorporation Fees Owed to PPP Agents Complaint

Case Event History

Zions Bancorporation Fees Owed to PPP Agents Complaint

June 9, 2020

The Paycheck Protection Program (PPP) provided funds for small businesses to keep going and keep paying employees during the Covid-19 pandemic. It also provided funds for the banks that process the applications and, out of their fees, for agents who help the small businesses prepare the applications. However, the complaint for this class action alleges that Zions Bancorporation, NA has refused to pay agents according to the provisions in the PPP.

Zions Bancorporation Fees Owed to PPP Agents Complaint
Tags: Covid-19 Related, Failure to Pay for Work or Services Rendered