Fears Nachawati Files Class-Action Suit Over Unfair JPMorgan Chase Pandemic Loan Practices
While small businesses all over the country have been forced to lay off staff, and in some cases, close down altogether, JPMorgan Chase gave large commercial banking clients preferential treatment as it administered emergency loans through the Small Business Administration’s Paycheck Protection Program (PPP).
Fears Nachawati has filed a class-action lawsuit on behalf of Illinois technology company Ajira AI LLC. According to the lawsuit, Chase and other banks that participated in the PPP acted as gatekeepers for those applying for nearly $349 billion in pandemic-related financial aid for businesses. On April 7, Ajira AI applied for a $30,000 PPP loan through Chase. On April 17, the company was informed that the funds had been exhausted. The company later provided additional information when funding was replenished, but had its application denied because bank representatives wrongly rejected it for lacking documentation.
“Small companies like Ajira AI deserved a fair chance for emergency funding to avoid layoffs and save their businesses,” said Fears Nachawati trial lawyer Matthew McCarley. “Instead, they were victims of a two-tiered system that processed loans for favored customers first.”
While only about 1 in 15 small businesses that sought loans was successful, published reports show that nearly all of Chase’s private and commercial banking clients who applied for a PPP loan received one. Small businesses were left to deal with glitches in the Chase website while larger businesses received personal attention. Chase awarded the most in loan funds – $14 billion – of those banks participating in the PPP program.
The lawsuit seeks damages for negligence, fraudulent concealment, wrongful interference and unfair and deceptive business practices. With similar lawsuits being filed on behalf of other small businesses, Mr. McCarley said these lawsuits should be consolidated so that they can move through the courts more efficiently for everyone involved.