Paycheck Protection Program Litigation: Four Takeaways from the First Case

Paycheck Protection Program Litigation: Four Takeaways from the First Case

April 14, 2020, Covington Alert

The CARES Act established a $349 billion Paycheck Protection Program (“PPP”) that authorizes participating lenders to make federally-guaranteed loans to small businesses as part of Congress’s COVID-19 relief effort. Just days after lenders began accepting PPP applications, lawsuits were already being filed challenging how lenders administer the PPP. In Profiles, Inc. v. Bank of America—the first case of its kind—several small businesses in Maryland filed a putative class action alleging that Bank of America improperly imposed additional criteria not permitted by the CARES Act on PPP loan applicants. On April 13, a federal judge denied the plaintiffs’ request for a temporary restraining order that would have regulated how Bank of America receives and processes applications. This alert discusses some of the takeaways from the court’s decision.