JPMorgan Chase (JPM -2.6%) is investigating the role some of its employees may have played in enabling the misuse of COVID-19 relief funds, Bloomberg stories, citing a memo to workers from the financial institution’s leaders.
The financial institution stated it has discovered “situations of consumers misusing Paycheck Safety Program [“PPP”] Loans, unemployment advantages and different authorities applications” and a few of its “workers have fallen brief, too,” in line with the memo.
The actions do not meet its rules “and should even be unlawful,” the financial institution stated.
JPMorgan stated it is working to establish misuse of such funds and is “cooperating with regulation enforcement the place acceptable.”
The most important lender within the Small Enterprise Administration’s $669B PPP, JPMorgan issued ~280K loans totaling greater than $29B.
This system elicited criticism early on within the PPP course of with potential lenders accusing banks of favoring current shoppers over potential ones and bigger corporations vs. smaller ones. Expertise outages and evolving lending guidelines additionally difficult this system.
The U.S. Division of Justice is pursuing quite a few circumstances of alleged fraud and a congressional subcommittee found earlier this month that greater than $1B in federal virus reduction went to small companies that acquired a number of loans, Bloomberg stories.
Beforehand: DOJ subpoenas big banks in PPP fraud probe – Reuters (Could 16)