Small companies in the United States are suing JP Morgan, Wells Fargo, and other banks for prioritizing large companies in providing loans under the government’s anti-pandemic financial support program.
Some of the largest banks in the United States are being sued for alleged misconduct in the government-sponsored payment protection program. The program is part of the $ 2.2 trillion stimulus package announced by President Trump to help small businesses cope with the economic crisis caused by the COVID-19 pandemic.
According to various news media, there were cFour class action lawsuits against the Central District Court of California JP Morgan Chase, Bank of America, Wells Fargo, US bank y Bancorp. Small businesses are in the country Filing lawsuits accusing banks of prioritizing large loans as part of the package, excluding small businesses from the program.
Presumably, these banks would have processed the largest loan applications first because they generate the highest fees rather than processing them as the government promised, based on availability. The class action lawsuits allege that the banks violated the California Business and Professions Code through unfair, fraudulent, and illegal practices. As well as false advertising and fraudulent concealment in the distribution of loans from the federal government’s protection program.
The lawsuits filed by the group of lawyers Stable right group On behalf of small business owners, they point out:
The bank again prioritized corporate greed at the expense of its small business customers.
The plaintiff group includes an optician in Long Beach, a yogurt, a marketing company in San Diego and a law firm in Los Angeles County.
Sue small businesses JP Morgan, Wells Fargo y Bank of America
The program that was adopted last month as part of a USD aid package$ 2 billion Loans up to USD were offered in response to the pandemic$ 10 million. Program credits are Guaranteed by the US Small Business Administration (SBA) and paid to small businesses through lenders.
According to the plaintiffs, every bank is “hidden from the public that credit applications received had been reorganized and priority had been given to those that would give the bank the most money“” As a result of his “dishonest behavior “They claim that thousands of small businesses that were eligible for program credit were left with nothing.
The middle Politician, who cited the lawsuit against the banks, mentioned:
Yes [el banco] It would have been honest that small businesses could (and could have) submitted their loan applications to other financial institutions that processed first-come, first-served requests“”
The plaintiffs have further stated that they base their claims on the SBA’s regular update data. These data indicate that banks focused on loans that were larger than $ 150,000 and less at the end of the program before the program ended. However after Bloombergthe SBA has not released any data that could support lender lending; or how many loans and what amounts were processed per day.
The program, which ended last Thursday, distributed 1,611,397 loans that exhausted the $ 350 billion fund. According to SBA data, almost 5,000 lenders participated.
Banks like JP Morgan refuse to comment
Most banks have declined to comment on the class action lawsuits to the local media. Bancorp, the only one who has answered the problem so far, said Bloomberg that the lawsuit was unfounded. The company informed the above-mentioned medium in an email:
“”We continue to look after our small business customers and are ready to process loans as soon as possible if additional funds become available..
JP Morganwho also refused to comment, posted on his website that “The smallest business customers received more than double the loans“” So he checked it BloombergJP Morgan claims to have given 18,000 small customer loans while its commercial bank has received more than 300,000 small business loan applications.
The court documents also explain how the business protection program works for the banks that grant the loans. Banks earned a 5% opening fee on loans up to $ 350,000. 3% in loans between $ 350,000 and $ 2 million. And 1% on loans between $ 2 and $ 10 million.
Simply put, that means The banks earned $ 17,500 for processing a $ 350,000 loan, compared to $ 100,000 for a $ 10 million loan.
Another stimulus program on the way
The economic stimulus package has received numerous criticisms from experts and analysts in the United States. The author of the book “Rich father, poor father“Robert Kiyosaki has raised objections to the Trump administration’s liquidity measure in the face of the pandemic crisis.
Interestingly, a recent report found that Americans may have used part of their stimulus to buy cryptocurrencies. As reported DailyBitcoin, one week after delivery of the first incentives to residents, exchange as Coinbase y Binance.US reported an increase in local operating volume.
Amid the controversy and a month after approval of the $ 2 billion print The US Senate passed a new additional package on Tuesday. The $ 484 billion package is designed to help small businesses and hospitals overcome the current economic crisis.
The new package, which has been the subject of fierce debate among the country’s politicians in the past two weeks, provides $ 380 billion for small business loan programs. Additional $ 75 billion for hospital emergency funds; and $ 25 billion for disease testing.
Links of interest
Donald Trump asked for direct payments of $ 1,000 for adults and $ 500 for children to deal with coronavirus
Sources: Bloomberg, Bitcoin.com, Politician, Fox Business, Cointelegraph
Annotation by Hannah Estefanía Pérez / DailyBitcoin