A congressional report says financial technology companies fueled rampant PPP fraud

A congressional report found financial technology companies, or fintechs, largely fueled PPP loan fraud. Bluevine, a fintech noted in the report, told NPR it adapted to threats of fraud better than other companies mentioned.accuses several little-known financial technology companies, or fintechs, of reaping"billions in fees from taxpayers while becoming easy targets for those who sought to defraud the PPP," or Paycheck Protection Program.

"While they were doing that, did they also open up the system to potential fraud and abuse?" he asks."If you look at the data, the answer seems to be yes.". That amounts to $64 billion in potentially wasted taxpayer money. This week's congressional report appears to confirm those allegations of widespread fraud.

Blueacorn's loan reviewers were told"the faster the better" by managers who recommended spending no more than 30 seconds on each application. Internal documents encouraged Blueacorn workers to only flag applications with"extremely obvious fraud" because the Small Business Administration, or SBA,"would handle any fraud we didn't stop.", the SBA was hardly an effective backstop for fraud.

"The risk here is not ours — it is SBA's risk," a manager at Kabbage told his fraud specialists, according to the report. Investigators say this comment refers tothat it wouldn't pursue penalties against lenders whose borrowers had attested that their loan documents were accurate. "We didn't spend a lot of time on the front end to try to understand what [Blueacorn was] doing to prevent or eliminate any fraud," Prestamos' CEO told the subcommittee.

NPR reached out to five companies named prominently in the report. Two of them — Blueacorn and Womply, which investigators found were involved in about a third of all PPP loans funded in 2021 — did not respond. The other three — Bluevine, Celtic Bank and Kabbage — told NPR they cooperated with the committee's investigation and are proud of the work they did during an unprecedented situation.

Kabbage's spokesperson, Alison Miller, said her company adhered to PPP's rules in good faith and remains committed to borrowers.

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