August 25, 2020 Articles

Agents Lose First Major Ruling over Fees from PPP Lenders

United States District Court for the Northern District of Florida rules that lenders are not required to pay agent’s fees under the CARES Act absent an agreement to do so.

By David J. Marmins and Morgan E. M. Harrison

The question of whether accountants, lawyers, and other consultants are entitled to “agent fees” for helping small businesses obtain loans under the Paycheck Protection Program (PPP), a creature of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), has become a major source of litigation for lenders across the country. In the first decision on this issue, handed down last week, a federal district court judge out of the Eleventh Circuit dismissed a complaint filed by a CPA firm against several lenders. The court ruled that the plain language of the CARES Act and its implementing regulations do not require that lenders pay a fee to borrowers’ agents. Accordingly, the court held that, absent an agreement between the parties regarding fees, the CPA firm could not state a claim for relief against the lenders.

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