Fintechs Made “Massive Profits” on PPP Loans and Sometimes Engaged in Fraud, House Committee Report Finds
ProPublicaNov 27, 2022
House Subcommittee: Fintechs Committed PPP Fraud
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Image copyright: House Select Subcommittee on the Coronavirus Crisis [via NBC News]
The Facts
The US House Select Committee on the Coronavirus Crisis released a report Thursday alleging financial tech firms, known as "fintechs," schemed to profit off the taxpayer-funded Paycheck Protection Program (PPP) during the pandemic.
One such fintech, Arizona-based Blueacorn, which is co-owned by Nathan Reis and his wife Stephanie Hockridge-Reis, has been accused of raking in $120M in processing fees while handing out billions in PPP loans but spent less than 1% of the fees on fraud protection.
The Spin
Pro-establishment narrative
Through diligent reporting by several journalistic outlets and effective government oversight, these horrendous PPP frauds are being exposed. These investigations could go a long way toward the DOJ holding fintechs accountable and could even lead to recouping some of the ill-gotten funds.
Establishment-critical narrative
The Small Business Administration (SBA) should get just as much flack as the fintechs. The SBA helped create the inflation crisis in the US by failing to build safeguards to prevent such fraud, leading to the needless distribution of billions of dollars. This is what happens when the federal government rushes to "put money out on the street."
