Major US banks are being accused of prioritizing higher-value loan applications, rather than processing requests on a first-come, first-serve basis
The lawsuits accuse the banks of prioritizing higher-value loan applications, rather than processing the requests on a first-come, first-serve basis — which the PPP intended — leaving thousands of businesses without loan access. PPP funding was within two weeks of being made available, but in the three days before it dried up, banks allegedly processed loan applications for $150,000 at less than twice the rate of larger loans.
The lawsuits claim that the largest loans were front-loaded so that banks could earn higher commissions from the government, which is banks to process loans: Fees range from 5% for a loan under $350,000 to 1% for a loan over $2 million. Though the preferential treatment that banks are allegedly giving to larger loan requests may not be outright illegal, they must be mindful of how their procedures are being perceived. BofA was separately
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