New PPP Loans Lawsuit Filed Against Chase and Its Clients Ruth’s Chris and Phunware
A new class action lawsuit has been filed against Chase and two of its largest clients, Ruth’s Chris and Phunware, accusing them of profiting from the $349B COVID-19 relief program by cheating small businesses.
An Illinois popcorn seller, Sha-Poppin Gourmet Popcorn, filed the lawsuit on April 24 in Chicago. The lawsuit names all three companies, and comes one day after Ruth’s Chris said it would return the $20 million received through the Paycheck Protection Program. “Ruth’s Chris’s walk-back cannot undo the lost opportunities, lost time value of money, and unnecessary stress incurred by these small businesses and their owners,” the lawsuit says.
Phunware, a mobile application development platform, received $3 million the lawsuit says. It also notes that Phunware appointed former JPMorgan Chase executive Blythe Masters to the head of its board after Congress passed the Paycheck Protection Program, and received preferential treatment with the loan approved within days.
“As the federal government was ramping up to allow small businesses to apply for PPP loans, Chase decided to ensure that its favored clients would be provided special assistance to make sure their loan applications were submitted quickly, accurately, and without a hitch,” the lawsuit says. Allegedly, Chase hosted a nationwide conference call to inform workers to give special treatment to some of the biggest clients, such as allowing them to submit applications earlier than the official launch. That left other qualified loan applicants to try and “submit an application through a non-functional web portal—or look elsewhere.”
The plaintiff says it was seeking $25,000 in emergency loans from Chase, but ended up getting a $6,000 loan from a smaller bank after struggling with the Chase appreciation, CNN says.
This is the second lawsuit filed against Chase. Major banks like Chase, Bank of America, Wells Fargo and U.S. Bank are accused of unfairly allocating these government-backed loans to certain small businesses. That lawsuit filed Sunday says that the banks prioritized larger loan applicants in order to generate $6 billion in origination fees.