S mall businesses affected by the coronavirus are suing Wells Fargo & Co., Bank of America Corp., JPMorgan Chase & Co. and US Bancorp. The lawsuit , filed in Los Angeles, accuses the lenders of prioritizing large loan applications for the rescue funds and shutting out small companies applying for the aid.

The complaint stated that the four banks processed the largest loan applications first because they generated the highest fees, rather than processing them, as the government promised, on a first-come-first-served basis. Banks earned origination fees of 5% on PPP loans up to $350,000; 3% on loans between $350,000 and $2 million; and 1% on loans between $2 million and $10 million, according to an article in  Bloomberg.com. 

As a result, thousands of small businesses that were entitled to loans under the Paycheck Protection Program were left without funds.

JPMorgan said in an FAQ statement that its small business clients received more than twice as many loans as the rest of its clients combined.

As of press time, representatives for the other lenders named in the suit didn't respond or declined ATM Marketplace's request for comment.

The complaints were based on two reports released by the SBA about the loans. One report gave data from April 3 when the program launched through April 13, when about three-quarters of the program's funding had already been claimed. The other report showed data as of April 16, after the funding was exhausted and the SBA stopped taking applications. The complaint indicated that in those last three days before the money ran out, loan applications for $150,000 and less were processed at twice the rate of larger loans in comparison to the initial report. This behavior suggested that the largest loan applications had been front-loaded, according to the complaint.

The SBA has not released information on how many loans and amounts were processed by which lender each day. 

For more information on how the coronavirus has affected the ATM industry, click here.

Copyright © 2020 Networld Media. All rights reserved., source Industry News