The Select Subcommittee on the Coronavirus Crisis has sent letters to four financial technology (FinTech) firms and their partner banks seeking documents and information related to their handling of Paycheck Protection Program (PPP) loans. The requests follow reports that FinTech companies and bank partners have been linked to a disproportionate number of fraudulent PPP loans.
The letters were sent to companies that have been linked to high numbers of fraudulent loan prosecutions and whose due diligence and fraud detection practices have been publicly called into question. They are –
• Kabbage, Inc.,
• Cross River Bank,
• Celtic Bank.
Recent reports have found that FinTechs and their bank partners handled 75 percent of the approved PPP loans that have been connected to fraud by DOJ, despite facilitating just 15 percent of PPP loans overall. This potential failure of due diligence came even as these same FinTechs were paid hundreds of millions of dollars in taxpayer funds to process these government-backed loans.
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