Regions Bank to pay nearly $5 million in DOJ settlement over COVID loan program
The action deals with a PPP loan from 2021.
Ethan Parker 
Regions Bank has reached a $4.9 million settlement with the Department of Justice following allegations involving a COVID-19 relief loan program. As reported by 205focus.com, the matter centers on a specific Paycheck Protection Program (PPP) loan issued in 2021.
The DOJ Allegations
According to the Department of Justice, the bank allegedly granted forgiveness for a PPP loan that did not meet the necessary requirements for such relief. The PPP, established by Congress in March 2020, was designed to provide federally guaranteed assistance to small businesses struggling during the pandemic. Administered by the U.S. Small Business Administration (SBA), these loans were eligible for forgiveness if funds were strictly utilized for payroll and other pre-approved operational expenses.
Under these federal rules, the SBA compensated lenders for the principal balance and interest once a loan was forgiven, in addition to providing origination fees. DOJ officials claim that in August 2021, Regions Bank approved forgiveness for an individual's loan that was ineligible under the program’s strict guidelines.
Accountability and Response
Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division emphasized the government's commitment to oversight, noting that the DOJ is focused on ensuring lenders strictly adhere to program rules when approving forgiveness applications.
In response to the settlement, Regions Bank noted that they facilitated approximately 75,000 PPP loans throughout the pandemic. Regarding the specific case at hand, the bank issued a statement saying, "While we disagree with claims made in this matter, we have settled with the goal of closing this chapter and moving on. 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 resolution involved several agencies, including the U.S. Attorney’s Office for the Western District of Missouri. You can find the original report from the source here.
