[Fredslist] Chase Being Sued for Unfair Business Practices in PPP

[paul at twosonsenv.com]

WOW! Look at this article! This explains it. The big fish got taken care of
first. 

 

 
<https://www.usatoday.com/story/money/2020/04/20/small-businesses-sue-chase-
bank-over-handling-stimulus/5163654002/>
https://www.usatoday.com/story/money/2020/04/20/small-businesses-sue-chase-b
ank-over-handling-stimulus/5163654002/

 

Paul Napolitano

President, Two Sons Environmental

 

Office 516 922 3653

Cell 516 287 4159

 <http://www.twosonsenv.com/> www.TwoSonsEnv.com

 



Chase and other banks shuffled Paycheck Protection Program small business
applications, lawsuit says

 <https://www.usatoday.com/staff/2648017001/dalvin-brown/> Dalvin Brown

USA TODAY

Corrections & Clarifications: An earlier version of this story misstated the
share of processing fees Chase would receive, according to a lawsuit.

Two companies in California filed a class-action lawsuit against JPMorgan
Chase bank alleging unfair business practices toward some small businesses
that applied for coronavirus-related loans under the government's Paycheck
Protection Program.

In the suit filed on Sunday, a cybersecurity firm and event planning company
accused Chase Bank of prioritizing small business borrowers who were seeking
larger loan amounts rather than processing the government-sponsored loan
applications on a first-come, first-served basis as advertised. 

The move meant that Chase and other banks would collect larger processing
fees - nearly $6 billion in total - by frontloading the queue with
businesses seeking higher loans, according to the lawsuit.

The businesses seeking lower loans were deprioritized, so many didn't get
the aid they were entitled to, the lawsuit filed on behalf of small
businesses said. 

The legal action is <https://spaces.hightail.com/receive/kJhIt2f0iC>  one in
a series of lawsuits lodged by small businesses against
<https://www.usatoday.com/story/money/2020/04/19/wells-fargo-lawsuit-small-b
usiness-ppp-loans/5162801002/> big banks such as Wells Fargo, Bank of
America and Bancorp citing unfair business practices and false advertising. 

The loans were a part of a $349 billion emergency small business lending
program meant to keep businesses afloat and staffers employed in the wake of
the coronavirus pandemic.

The government-backed forgivable loan plan kicked off on April 3 and ran out
of money less than two weeks later on April 16. 

"Chase concealed from the public that it was reshuffling the PPP
applications it received and prioritizing the applications that would make
the bank the most money," the lawsuit said.

Chase bank wasn't immediately available for comment. 

Chase updated a statement to small business customers on its website on
April 19, the day the lawsuit in California was filed. 

"I also understand that many of you are frustrated that you applied early in
the process, but that SBA funding ran out before you could receive a loan,"
said Jennifer Roberts, CEO of Chase Business Banking. "We want you to know
that we are working to make sure as many of our Business Banking customers
receive loans as possible."

Eighty percent of PPP loans processed through Chase went to businesses with
less than $5 million in revenue. About half went to small businesses with
less than $100,000, the bank said. 

The proof of Chase prioritizing larger borrowers lies in numbers provided by
<https://www.sba.gov/sites/default/files/2020-04/PPP%20Deck%20copy.pdf> the
Small Business Administration, the lawsuit alleges. In the past three days,
before the PPP loan money ran out, banks allegedly processed loan
applications for $150,000 and under at twice the rate of larger loans.

This would suggest that banks prioritized applications for the largest loans
early on, otherwise "the percentage change of applications submitted in the
last three days of the program would be consistent among all application
types," the plaintiffs claim.

Follow Dalvin Brown on Twitter:  <http://www.twitter.com/dalvin_brown>
@Dalvin_Brown. 

 

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