Regions Bank to pay nearly $5 million in DOJ settlement over COVID loan program
The action deals with a PPP loan from 2021.
Chloe Mitchell 
Regions Bank has reached a $4.9 million settlement with the Department of Justice following allegations related to a COVID-19 relief program. As reported by 205focus.com, the case centers on the handling of a specific Paycheck Protection Program (PPP) loan.
The PPP Loan Dispute
The DOJ alleged that in August 2021, Regions Bank approved the forgiveness of a PPP loan for a customer, despite the fact that the loan did not meet the required eligibility standards for such forgiveness. Congress originally launched the PPP in March 2020 as a lifeline for small businesses struggling through pandemic-related shutdowns. Under the program, the U.S. Small Business Administration (SBA) provided federally guaranteed loans, which lenders could approve for eligible borrowers to cover payroll and other critical operational costs.
When a loan qualified for forgiveness, the SBA would pay the lender the forgiven principal balance plus interest, in addition to origination fees. However, federal authorities are now placing a focus on ensuring lenders adhere strictly to those program rules.
Accountability and Response
Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division stated that the DOJ remains focused on holding lenders accountable when they fail to comply with program requirements, specifically citing the improper approval of forgiveness for ineligible loans.
Regions Bank, which processed approximately 75,000 PPP loans during the program's existence, issued a statement regarding the settlement. "While we disagree with claims made in this matter, we have settled with the goal of closing this chapter and moving on," the bank noted. "We are proud of our record supporting small businesses and have resolved this one individual matter regarding one specific loan from that 75,000 total."
The investigation and subsequent settlement involved multiple agencies, including the U.S. Attorney’s Office for the Western District of Missouri.
