LOS ANGELES--(BUSINESS WIRE)--Consumer attorneys with Stalwart Law Group have filed four class-action lawsuits in California federal court on behalf of small business owners who are feeling hopeless and terrified after four major banks rejected their Paycheck Protection Program (PPP) loan applications.
In response to the COVID-19 pandemic, Congress passed the CARES Act, which allocated $349 billion in emergency funds for the small business loan program known as the Paycheck Protection Program. The program, which launched on April 3, was intended to provide loans of up to two-and-a-half times a business owner’s monthly payroll. The loan program ran out of funds on April 16, leaving most of the small business applicants empty handed.
The lawsuits claim the nation’s four largest lenders involved in the paycheck protection program, JPMorgan, Bank of America, Wells Fargo and US Bank, rigged the loan process to benefit their bottom line.
According to the complaints, instead of a “first-come, first-served basis,” the banks processed the biggest loan amounts first, because it increased the banks’ origination fees while leaving more than 90% of the small businesses owners who applied for loans out of luck once the funds depleted. An origination fee is the compensation a lender receives for processing a new application.
To make matters worse, the banks concealed from the public that they were reshuffling the PPP applications received and prioritizing the applications that would make the banks the most money. The class actions are being filed on behalf of small business owners in California. Stalwart Law Group says it expects to file similar lawsuits on behalf of small business owners in New York.
“Small businesses are the backbone of the American economy and these businesses and their employees have been hit hard by the COVID-19 pandemic,” said lead plaintiff attorney Dylan Ruga. “Once again, we see big banks prioritize corporate greed at the expense of its small business customers,” added Ruga.
The lawsuits allege that as a result of their deceptive lending prioritization practices, giving preference to larger “small businesses” over true small businesses, banks received nearly $6 billion in fees while hundreds of thousands of loan applicants got nothing.
The plaintiff’s legal team includes Stalwart Law Group’s Dylan Ruga, Ji-In Lee Houck, David M. Angeloff, Brian Poulter, Patrick Jacobs, Allen Haroutounian, and Cindy Hickox. Stalwart Law Group is a boutique civil litigation firm that specializes in commercial litigation, legal malpractice, intellectual property litigation, employment litigation, and catastrophic injury.
Link to Complaints: https://spaces.hightail.com/receive/kJhIt2f0iC
