Class action lawsuits have been filed against JPMorgan Chase, Bank of America, Wells Fargo, and U.S. Bank for their alleged unlawful and fraudulent practices in the Paycheck Protection Program. This program is part of President Trump’s $2.2 trillion stimulus package to help small businesses cope with the economic crisis resulting from the covid-19 pandemic.
Lawsuits Against Big Banks
Four class action lawsuits were filed Sunday in the U.S. District Court for the Central District of California against some of the largest banks in the country: JPMorgan Chase Bank, Bank of America, U.S. Bancorp and U.S. Bank, and Wells Fargo Bank.
The suits allege that banks violated the California Business & Profession Code with unfair, fraudulent, and unlawful practices as well as false advertising and fraudulent concealment in dispensing loans from President Trump’s Paycheck Protection Program (PPP). The loans were intended to provide American small businesses suffering from the covid-19 crisis with eight weeks of cash-flow assistance. It is part of the government’s $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act.
However, banks allegedly prioritized large loans in order to earn larger fees, effectively shutting out small businesses from accessing the funds. The suits, filed by Stalwart Law Group on behalf of small business owners, read:
[The bank] has, once again, prioritized corporate greed at the expense of its small business customers.
Cheating the Federal Stimulus Program, Prioritizing Loans With Larger Fees
Citing data provided by the Small Business Administration (SBA), the lawsuits allege that JPMorgan Chase, Bank of America, Wells Fargo, and U.S. Bancorp failed to process the PPP applications on a first-come, first-serve basis as
