Several of the Small Business Administration’s biggest Paycheck Protection Program processors and application screeners approved tens of billions of dollars in fraudulent loans, often ignoring or disregarding warnings from customers and employees,Rep. James Clyburn, D-S.C., head of the select subcommittee, said in a press release that many fintechs refused to take adequate steps to detect and prevent fraud while disbursing billions in relief loans.
Clyburn said he has asked watchdog agencies such as the SBA Office of Inspector General and the Department of Justice, to follow up on the findings. As we've noted, federal agencies have already saidHouse PPP report takes aim at specific fintechs, including Kabbage Inc., Bluevine Inc., Blueacorn PPP LLC and Womply Inc.
The report claims Kabbage approved loans with likely indicators of fraud, partly because the program imposed minimal risk on lenders who approved questionable applications. In one exchange, a Kabbage risk manager supervising fraud specialists told his team “a fundamental difference” between the level of diligence applied in the PPP, as opposed to normal lending by Kabbage, was that “the risk here is not ours – it is SBA’s risk.
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