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Financial Services Law Insights and Observations

Another court dismisses PPP agent fees suit

Courts Covid-19 SBA CARES Act

Courts

On January 6, the U.S. District Court for the Central District of California issued an order dismissing a putative class action against two national banks alleging that the banks owe fees to agents that helped businesses file applications for the Paycheck Protection Program (PPP). The named plaintiff, a consulting company that aided borrowers in applying for federally guaranteed loans through the PPP, argued that its agents were entitled to fees from the banks that provided PPP loans. The court disagreed, finding that the CARES Act and its implementing regulations do not require lenders to pay agent fees absent an express agreement between an agent and the lender. The court further found that “nothing behind language in the CARES Act suggests that Congress intended to create an implied private right of action.”

The court’s decision follows rulings issued by other federal courts, which have also dismissed similar agent fee actions (covered by InfoBytes here, herehere, and here).

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