Regions Bank has agreed to pay $4,919,631 to the United States to resolve federal allegations that it received funds it was not entitled to after approving forgiveness of a Paycheck Protection Program (PPP) loan that did not meet eligibility requirements.
According to the U.S. Department of Justice, the bank approved full forgiveness of a PPP loan on August 3, 2021, even though the loan was not eligible for forgiveness under federal program rules. Once the loan was forgiven, the Small Business Administration reimbursed the lender for the forgiven principal, interest, and associated fees. Federal officials stated that this reimbursement resulted in unjust enrichment to the bank.
The PPP was created in March 2020 under the CARES Act to help small businesses maintain payroll during the COVID‑19 pandemic. Private lenders were authorized to issue loans and approve forgiveness requests only when borrowers met strict federal criteria.
Assistant Attorney General Brett A. Shumate emphasized that lenders must follow program requirements and that the department remains committed to enforcing compliance across all PPP‑related activity. The settlement resolves the civil allegations without any admission of liability by Regions Bank.
Sources
- U.S. Department of Justice