A proposed class action filed by a Utah accounting firm claims a stable of banks and credit unions has failed to pay agents who assisted with the preparation and filing of Paycheck Protection Program (PPP) applications.
The 22-page lawsuit alleges defendants Bank of America Corporation; Bank of America, N.A.; Chase Bank USA, N.A.; Mountain America Federal Credit Union; and University First Federal Credit Union have overstepped Small Business Administration (SBA) mandates by refusing to pay or not paying full statutory fees to accountants, consultants, loan brokers, or other representatives who helped clients file PPP loan applications.
According to the case, the PPP was established under the Coronavirus Aid, Relief, and Economic Security (CARES) Act as a means for small businesses to receive federally backed, forgivable loans to assist with battling economic hardship caused by the COVID-19 crisis. Though backed by the SBA, the PPP was to be administered through private lenders such as the defendants, who, in return for administering a PPP loan, would receive between one- and five-percent fees depending on the size of the loan, the case explains.
The suit says that under SBA regulations, any PPP agent—including an attorney, accountant, consultant, employee of the borrower who prepares their employer’s application, anyone who assists a lender in relation to an SBA loan, loan broker, or any other individual who represents an applicant in its business with the SBA—was to be paid for their services by the PPP lender through a portion of the funds it received from the SBA. According to the case, agent fees ranged between 0.25 and one percent of the loan amount, depending on the size of the loan.
The lawsuit claims that despite SBA regulations, the defendants have either refused to pay PPP agents as a matter of policy or have agreed to pay only a percentage of the fees owed, “thus retaining for themselves all of the statutory fees allotted by the Government for Agents as part of the PPP.” The plaintiff firm claims although it has assisted clients with gathering required documents and preparing their PPP applications, it has not been paid the statutory agent fees by the defendant lenders as required under the program.