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PPP Loan Investigations: What's on the Horizon for Banks?

American Bankers Association

  • August 2021

Steve Carey, Brian Cromwell, and Todd Sprinkle wrote an article for the American Bankers Association explaining how banks can prepare for government investigations and private lawsuits tied to pandemic-related programs. 

"Banks will likely be targeted in the coming months for their roles with the Paycheck Protection Program and other lending during the pandemic," they wrote. "This will take the form of government and whistleblower investigations, including False Claims Act claims related to loans that went to companies (and fraudsters) that should not have received these loans. It may also include class actions from frustrated companies that did not receive timely loans, as well as actions from creative plaintiffs’ attorneys who are using federal and state laws to create new hooks for litigation."

"Banks can take steps right now to prepare for these types of governmental and private inquiries, including auditing not only the PPP applications they received but also the process they used to administer them," they continued. "Banks should also consider certain proactive communications with prosecutors and regulators if potential issues are identified."

You can read the full article here: PPP Loan Investigations: What’s on The Horizon for Banks?

The American Bankers Association was founded in 1875 and represents banking institutions of all asset sizes and charter types.