![]() Proline, Elite, and other non-qualifying small businesses joined as a putative class and filed for an injunction with the hope their PPP applications would be a considered.īefore taking up the allegations, the Federal Court for the District of Maryland first turned to the threshold issue of whether Congress intended an implied private right of action allowing loan applicants to sue lenders. Elite had a similar longstanding relationship with BofA and, likewise, did not qualify because it had no borrowing relationship with the bank. Proline had been a customer with BofA for 25 years, but did not qualify for a PPP loan under BofA’s requirements because the business had no prior borrowing relationship with BofA. Plaintiffs Elite Security Group (“Elite”) and Proline Products, Inc., (“Proline”) tried to submit applications when PPP launched but were turned away because they had not previously borrowed from BofA. But the bank would only accept applications from customers with a preexisting borrowing relationship with BofA. BofA began accepting online applications for PPP loans when the relief program launched on April 3, 2020. ![]() ![]() When Bank of America (BofA) sought to add some requirements of its own, a putative class of plaintiffs sought a preliminary injunction to enjoin BofA from adding restrictions on loan applications. Though the program has certain minimum requirements, it does not foreclose lenders from imposing additional requirements on borrowers. ![]() Under the program, loans are serviced by participating banks and insured depository intuitions. The program is one of Congress’ economic stimulus efforts built-in the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The Paycheck Protection Program (“PPP”) authorized billions in forgivable loans to small businesses to pay their employees during the COVID-19 pandemic. Small businesses turned-away for PPP loans face an added hurdle of showing standing to sue lenders, while PPP lenders okayed to add requirements to PPP loans, according to a recent decision from the District of Maryland. ![]()
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