The New York-based bank has failed to comply with a provision of the CARES Act requiring lenders to pay a fee of up to 1% to financial agents who work with applicants on loan paperwork, according to the complaint, which was filed Thursday as a class action in Manhattan federal court.
JPMorgan “did not set up a structure or ask any questions to determine whether borrowers utilized an agent in completing applications,” the accountants alleged. “It appears that this scheme was to claim ignorance of the existence of the agent as an excuse not to pay the agent its share of the compensation.”
The government compensated the bank with fees of 1%, 3% or 5% for each of the 239,000 PPP loans it approved, allowing JPMorgan to collect an estimated $870 million in origination fees on more than $29 billion in borrowed funds, according to the complaint.
The CARES Act, approved by
JPMorgan didn’t immediately respond to a request for comment after regular business hours.
The case is Quinn v. JPMorgan Chase Bank N.A., 20-cv-4100 , U.S. District Court, Southern District of New York (Manhattan).
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