United States Department of Justice secures USD 4.9 million settlement from Regions Bank over ineligible PPP loan forgiveness

The United States Department of Justice announced that Regions Bank has agreed to pay USD 4,919,631 to resolve allegations that it received federal funds it should not have received after approving forgiveness of a Paycheck Protection Program loan that was not eligible for forgiveness. The case centers on a PPP loan that Regions allegedly approved for forgiveness on or about August 3, 2021, even though the loan did not meet the program’s forgiveness requirements. Under the PPP, which was created by the CARES Act and administered by the Small Business Administration, lenders could approve forgiveness only where borrowers used loan proceeds for payroll and other eligible expenses. Once a loan was forgiven, the SBA paid the lender the forgiven principal balance and accrued interest, and also paid origination fees tied to the loan amount. The United States alleged that Regions was unjustly enriched by the SBA payment tied to the ineligible forgiveness. The settlement resolves allegations only and includes no determination of liability.