It has taken a while, but the start of litigation against financial institutions, which made the Paycheck Protection Program (PPP) loans, has begun. Government/regulatory inquiries will follow. Is your business ready?
Smaller banks and nonbank lenders account for a large percentage of PPP loans extended and the total net loan amounts. Some 4,105 relatively small banks and savings and loan associations, each with assets less than $1 billion, extended and approved a total of 1,812,102 PPP loans for more than $101.5 billion.
The risks are many- including state law lender-liability claims, the potential for False Claims Act (FCA) exposure, risks of Anti Money Laundering (AML), Bank Secrecy Act (BSA) infractions, whistleblowers, and DOJ or other government agency investigations, to name a few. What should financial services providers be doing about their PPP exposure?
The CARES Act is (So Far) Not a Complete Shield
In March 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, to provide emergency financial support to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. The Paycheck Protection Program was a nearly $1 trillion business loan bailout administered by the U.S. Small Business Administration (SBA), and it allowed entities to apply for low-interest private loans to pay for their payroll and certain other costs. Those loans were promoted as subject to complete forgiveness if SBA compliant. If...
News The Jewellers Association of Australia (JAA) has corrected the false claims it made about its financial affairs in a statement published on 31 March. These false claims were first documented b...