Small Business Administration

Earlier this year, this blog reported on the wave of “Agent Fee” class actions against lenders who made PPP loans under the CARES Act. At one point, there were over sixty such lawsuits, spread across the federal courts, alleging that banks were required to pay CPAs and others who assisted borrowers with loan applications.  Since then, however, virtually every ruling has been in favor of the banks, and now there is real reason to question whether these suits will continue.

Continue Reading RETREAT! “Agent Fee” Class Actions Moving Against Plaintiffs

In a landmark decision Monday, the United States District Court for the Northern District of Florida dismissed a putative class action involving “agent fees” for Paycheck Protection Program (“PPP”) loans under the federal Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. This lawsuit, Sport & Wheat CPA, PA v. Servisfirst Bank et al., No. 3:20-cv-05425-TKW-HTC (N.D. Fla.) claimed to represent a class of accounting firms and other consultants that allegedly worked as agents on behalf of applicants for PPP loans – typically small business clients. Plaintiff contended the CARES Act and implementing regulations required lenders to pay them “agent fees” for preparing loan applications.

Continue Reading Florida Judge Dismisses First-Filed PPP Agent Fee Class Action, Holds the CARES Act Contains No Requirement Agents be Paid

On Wednesday, the Judicial Panel on Multidistrict Litigation rejected consolidation of 62 class actions involving Paycheck Protection Program (“PPP”) loans under the federal Coronavirus Aid, Relief, and Economic Security (“CARES”) Act in a multidistrict litigation (“MDL”).  These actions claim to represent a class of accounting firms (and other consultants) that allegedly worked as agents on behalf of applicants for PPP loans – typically small business clients. Plaintiffs contend the CARES Act and implementing regulations require lenders to pay them “agent fees” for preparing loan applications.

Continue Reading Lenders Gain Big Win Resisting MDL Consolidation in PPP Agent Fees Class Action Litigation

At least two class actions filed in the wake of the COVID-19 pandemic by disgruntled accounting firms allege some of the nation’s largest banks never paid “agent fees” to entities assisting small businesses apply for Paycheck Protection Program (“PPP”) loans under the federal Coronavirus Aid, Relief, and Economic Security (“CARES”) Act – and never intended to.

These lawsuits allege plaintiffs represent a class of financial services and accounting firms that prepared PPP applications on behalf of eligible small business clients. Plaintiffs contend the CARES Act and implementing regulations require lenders to pay them “agent fees” for preparing loan applications. Fees are calculated by tiers according to the amount of the loan – a one percent fee for loans of $350,000 or less, a .50 percent fee for loans of more than $350,000 and up to $2 million, and a .25 percent fee on loans over $2 million.


Continue Reading Second Wave of CARES Act Litigation Filed Against Banks; Accounting Firms Seek “Agent Fees” for Preparing PPP Loan Applications.