The Alabama-based bank with combined assets of $157.4 billion has agreed to settle lawsuits stemming from business loan forgiveness that occurred during the pandemic.
US Department of Justice he says that on August 3, 2021, Regions Bank approved the forgiveness of the client’s loan for the Paycheck Protection Program (PPP).
Congress created the PPP in March 2020 to provide guaranteed loans to small businesses facing financial uncertainty due to the COVID-19 pandemic.
Eligible borrowers could later apply for loan forgiveness as long as they used the money for employee wages and other eligible expenses. The US Small Business Administration (SBA) then pays the borrower all of the forgiven costs and interests.
Madera Bank is being accused of unjust enrichment for receiving payments from the SBA after it allegedly forgave a PPP loan that should not have been forgiven.
Said Assistant Attorney General Brett A. Shumate of the Department of Justice’s Civil Division,
“The department is committed to ensuring that PPP borrowers are prosecuted for failing to comply with the program’s requirements, including accepting waivers for PPP loans that were not eligible under the program’s rules.”
Regions Bank agreed to pay US $4,919,631 to settle the charges. Termination agreement he says that the bank’s decision is not the same as its approval of the loan.
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