Starting in 2021, startup fintech companies like Blueacorn were allowed to participate in the program.įintech companies took up a leading role in the program, which eventually issued $800 billion in forgivable loans to companies with fewer than 500 workers.
While lenders were responsible for underwriting and processing loans, for which they earned commissions of 1-5% depending on the size, they also relied on agents like those listed in the report to handle much of the work, including reviewing an applicant's qualifications. But the report asserts fintech companies that processed applications perpetuated the fraud and sought to blame the Small Business Administration while earning hundreds of millions in fees for themselves. That tens of billions of aid dollars meant to help businesses retain workers during the pandemic were issued to ineligible companies is not new - the committee previous l y identified about $84 billion in potentially fraudulent loans. James Clyburn, D-S.C., released the incriminating report Thursday that alleges the companies intentionally approved high-dollar loans ahead of those meant to assist small mom-and-pop businesses and directed workers to ignore signs when applications were blatantly fraudulent.
The Select Subcommittee on the Coronavirus Crisis, chaired by Rep. A congressional panel is recommending several tech and lending companies be investigated for fraud for the way they processed billions of dollars in Paycheck Protection Program loans, including a Phoenix-based startup co-founded by a former television newscaster.
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