ANNAPOLIS, Md., April 3, 2020 /PRNewswire/ -- The lawsuit alleges at a time of severe national need, Defendants Bank of America Corporation ("Bank of America") and Bank of America, N.A. ("BNA") (collectively, "Defendants" or "BOA") instead privileged discriminatory policies of corporate greed over the needs of America's small businesses.
According to the lawsuit, authorized by Congress and the President under the Coronavirus Aid, Relief, and Economic Security Act, H.R. 748 ("CARES Act") and its loan programs to administer billions of dollars in federal funding to small businesses in a fair, equitable and uniform manner, Defendants allegedly implemented a loan process that unlawfully prioritized their existing borrowing clients and barred their depository clients and other small businesses from even applying for funds from the governmental loan programs. Nothing in the CARES Act authorizes or permits Defendants to pick and choose who would gain access to or benefit from the federally backed lending program. And, the priority of access to these limited funds is material – the demand is overwhelming as America responds to the economic tsunami of COVID-19 upon small businesses. There is no justification for allegedly requiring depository clients and other small businesses to go to the end of the line.
Named Plaintiff Profiles, Inc. ("Named Plaintiff" or "Profiles") brings this action, on behalf of itself and all others similarly situated, against BOA for violations of the CARES Act", violations of the Small Business Administration's ("SBA") 7(A) loan program, 15 U.S.C. 636(a), a declaratory judgment pursuant to 28 U.S.C. 2201, and a preliminary and permanent injunction pursuant to 28 U.S.C. 2202.
The Paycheck Protection Program ("PPP"), which is part of the $2 trillion stimulus package created by the CARES Act in response to the COVID-19 pandemic that was signed in to law on March 27, 2020, empowers lenders to make available as much as $349 billion in government-guaranteed loans to cover eight weeks of payroll and other expenses.
The lawsuit alleges that BOA – creating an unnecessary restriction on PPP loans – is refusing to accept PPP loan applications unless the small business is an active borrower with BOA. BOA is thus unlawfully prioritizing existing customers who are active borrowers as of February 2020.
Indeed, BOA has allegedly denied access to the PPP program to small businesses that do not have a "lending" relationship with BOA. Profiles, which has a depository relationship with BOA, was prohibited by BOA from even applying for a PPP loan with BOA, despite meeting the statutory requirements for a PPP loan.
The purpose and motivation behind BOA's alleged discriminatory practice is transparent – it is prioritizing its balance sheet by supporting preexisting loans issued by BOA through the PPP program at the expense of small business customers who do not have a lending relationship with BOA.
Senators Marco Rubio (R.-Fla.) and Ben Cardin (D.-Md.) have already chastised BOA for imposing criteria not found in the law and selectively choosing who can apply.
BOA's alleged discriminatory practices are abhorrent and in violation of federal law. In this time of national need, BOA's discriminatory practices can only be described as corporate greed.
For details about the lawsuit, contact Alan Rifkin, Rifkin Weiner Livingston LLC, at email@example.com or (410) 960-1779.
SOURCE Rifkin Weiner Livingston LLC
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