Articles · Lenders and fintech
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How Much Did Bank of America Make From Pandemic Relief?
Bank of America made more Paycheck Protection Program loans than any other lender: 491,034 of them, for $34.4 billion. Priced loan by loan under the SBA's fee rules, that book carries about $1.49 billion in processing fees. In May 2020 the bank said the "net proceeds" would go to small businesses and the communities and nonprofits it serves. It has not published the fees, the costs or the amount given.
I. One modeled number and two blanks
"Made" can mean three things here. Public records answer one of them.
| Question | Figure | Basis |
|---|---|---|
| What did the SBA owe Bank of America in PPP processing fees? | $1.48 billion to $1.49 billion | Modeled: the SBA's loan-level file, priced loan by loan under the published fee rules |
| What did the bank say it received? | No total published | "a final assessment of total fees received once all loans have been processed" (May 2021) |
| What was left after costs, and how much was given away? | Not public | The 2020 pledge covers "net proceeds" |
The SBA's public loan file lists Bank of America, N.A. as the originating lender on 491,034 PPP loans with $34.41 billion in approved amounts (SBA loan-level data). Priced one loan at a time, those loans carry $1,491.1 million in lender processing fees. That is the figure on the bank's lender page and in the ranking of PPP lenders by estimated fees, where it sits second, behind JPMorgan Chase's $1.79 billion; that figure includes $90.4 million on loans the SBA file lists under JPMorgan's name that match the book of First Republic Bank, which JPMorgan took over in 2023. The low end of the range, $1,478.8 million, comes from pricing the same loans on their originally approved amounts (section IV).
The figure is fees owed, accrued before the bank's costs.
II. Who paid the bank, and for what
The money came from the SBA. The borrower paid nothing. For every PPP loan it made, the lender was entitled to a processing fee set as a percentage of the loan. In 2020 that was 5 percent up to $350,000, 3 percent above that and under $2 million, and 1 percent at $2 million or more (85 FR 20811). The SBA guaranteed the whole loan and forgave most of them (465,877 of Bank of America's 491,034), so the government paid the fee and, in the end, the principal. For 2021 loans of $50,000 or less, the fee became the lesser of 50 percent of the loan or $2,500 (86 FR 3692; 86 FR 3712).
Say a hair salon borrowed $20,833, which was Bank of America's median PPP loan. Approved in May 2020, the loan paid the bank 5 percent: $1,041.65. The same loan approved in February 2021 paid $2,500.
The bank's 2021 book shows what that rule was worth. It made 108,304 loans of $50,000 or less that year, for $2.05 billion. Under the 2021 rule they carry $260.6 million in fees; at the 2020 rate of 5 percent they would have carried $102.4 million. On the model, the small-loan rule added $158.3 million to Bank of America's fees.
Agents who helped borrowers apply were to be paid by the lender out of its own fee. No agent pass-through at Bank of America appears in any record we found, and a federal court held that the bank owed agents nothing without a written agreement (section V). On the record, the whole fee stayed with the lender.
The bank's accounting spread the money out. Its quarterly report for September 2020 explains: "As compensation for originating the loans, the Corporation received lender processing fees from the SBA, which are capitalized, along with the loan origination costs, and will be amortized over the loans' contractual lives and recognized as interest income" (Bank of America, Form 10-Q for the quarter ended September 30, 2020). So the fees do not appear on a line of their own. They sit inside net interest income, netted against origination costs, and arrive faster as loans are forgiven. The 2021 annual report says as much: Consumer Banking's net interest income rose $231 million "primarily due to the benefit of higher deposit balances and the acceleration of net capitalized loan fees due to PPP loan forgiveness" (Bank of America, Form 10-K for 2021). PPP balances fell from $22.7 billion at the end of 2020 to $4.7 billion a year later, which the same report attributes to "repayment of the loans by the SBA under the terms of the program."
III. The book: 491,034 loans, mostly small
By round
| Round | Loans | Approved amount | Modeled fees |
|---|---|---|---|
| 2020 (first draw) | 343,482 | $25.48B | $946.5M |
| 2021 first draw | 13,479 | $0.58B | $40.9M |
| 2021 second draw | 134,073 | $8.36B | $496.5M–$503.7M |
| Total | 491,034 | $34.41B | $1,483.9M–$1,491.1M |
By loan size
| Loan size | Loans | Share of loans | Approved amount | Modeled fees |
|---|---|---|---|---|
| $50,000 or less | 361,453 | 73.6% | $6.43B | $480.0M |
| $50,001 to $350,000 | 114,257 | 23.3% | $13.08B | $654.1M |
| $350,001 to under $2M | 13,926 | 2.8% | $10.04B | $301.2M |
| $2M or more | 1,398 | 0.3% | $4.85B | $48.5M–$55.8M |
Source: SBA loan-level data, 2024-09-30 release, loans with Bank of America, N.A. as originating lender, priced under the rules above. The ranges in the last rows are the second-draw sensitivity in section IV.
Three loans in four were for $50,000 or less. They account for 18.7 percent of the dollars and 32.2 percent of the fees. The 15,324 loans above $350,000 are 3.1 percent of the count, 43.3 percent of the dollars and 23.9 percent of the fees. Bank of America made 4.3 percent of all PPP loans in the file and, on the model, was owed 3.9 percent of the $38.2 billion in lender fees.
The first two weeks look different. The bank opened its PPP portal on April 3, 2020, to customers with an existing borrowing relationship. The next day it widened the gate to checking customers who had no "business credit or borrowing relationship with another bank" (memorandum opinion, Profiles v. Bank of America, pp. 2–3). The SBA file dates 9,056 Bank of America loans, for $3.63 billion, between April 3 and April 16, when the first appropriation ran out. Their average was $400,683, about twice the $197,415 average across all lenders in the same window. The 2,296 of them above $350,000 carried $3.04 billion, 84 percent of the bank's April 3–16 dollars. In those two weeks the largest PPP lender by count made 0.6 percent of the loans the SBA approved.
The bank's May 4, 2020 press release reported 265,500 approvals, "More than 256,000" of them since the SBA reopened the program on April 27. It called Bank of America "the number one SBA lender in the second round of funding" (Bank of America press release, May 4, 2020). The SBA file dates 264,782 Bank of America loans to May 2020 alone.
The file records approval dates, not application dates, so it cannot show the order in which applications arrived. The bank's chief executive told the Senate Banking Committee in May 2021: "We did not prioritize among client applicants when processing or submitting completed applications to the Small Business Administration (SBA) based on the amount of the customer's loan request or any broader client relationship" (Brian Moynihan, written testimony, May 26, 2021, p. 4). The House Select Subcommittee, working from the bank's own data, found that it "processed loans for both groups of applicants in roughly 22 days," the groups being businesses with more than 100 employees and single-employee businesses (Select Subcommittee staff report, "Underserved and Unprotected," October 2020, p. 15).
IV. The model and what moves it
The model prices each loan in the SBA file on its current approved amount, under the fee schedule for its round. Three things move it.
- Priced on the amounts originally approved rather than the current ones, the book comes to $1,478.8 million, $12.4 million lower. That is the low end of the range.
- Bank of America made 181 second-draw loans of exactly $2 million. The second-draw rule has no 1 percent tier, so each pays 3 percent, $60,000 (86 FR 3712, at 3722). Had the SBA paid them at the first-draw rate of 1 percent, the total would be $7.2 million lower, at $1,483.9 million.
- The model assumes the SBA paid a fee on every loan in the file. The 10,215 Bank of America loans now listed as charged off carry $31.6 million of the modeled fees. No record we found shows the SBA withholding or recovering a fee from Bank of America.
The file's loan count matches the bank's. The bank reported "approximately 343,000 PPP loans" at September 30, 2020 (Form 10-Q, third quarter 2020); the file has 343,482 first-round loans. The bank reported $35.4 billion "cumulatively originated" by the end of 2021 (Form 10-K for 2021); the file carries $34.41 billion. The file does not explain the $1 billion gap, and the model prices only what the file carries.
What the fees cost to earn is not public. The bank said it dedicated "more than 3,000 employees by the first week of the program" to PPP applications (Moynihan testimony, May 26, 2021, p. 4). Its 2021 proxy statement lists among the year's results "retraining and redeploying over 24,000 teammates to assist with PPP loan origination" (Bank of America, 2021 proxy statement). On the October 2020 earnings call, chief financial officer Paul Donofrio said the bank's elevated COVID expense came from processing unemployment claims and the "continued cost of supporting PPP loans," and added: "Both of these activities have revenue benefits which helped offset some of the costs" (Bank of America Q3 2020 earnings call, October 14, 2020). The 2021 annual report says the bank's participation in pandemic programs "has also resulted and will continue to result in losses, including from the Paycheck Protection Program (PPP) and the processing of unemployment benefits for California and certain other states" (Form 10-K for 2021). It does not give the size of the losses.
In the series ranking of fee collectors in the pandemic loan programs, on fees after documented payments to agents, Bank of America is third, behind Womply and JPMorgan Chase. The eleven largest:
| Collector | How it was paid | PPP loans | Approved amount | Fees ($M) | Fee per loan |
|---|---|---|---|---|---|
| Womply | Fees billed to lenders (its own piece) | n/a | n/a | 1,847–2,641 billed | n/a |
| JPMorgan Chase | Lender fee (modeled) | 438,565 | $41.55B | 1,700.2 | $3,877 |
| Bank of America | Lender fee (modeled) | 491,034 | $34.41B | 1,491.1 | $3,037 |
| Blueacorn | Agent fees from lenders (reported) | n/a | n/a | 1,080–1,086 | n/a |
| Cross River | Lender fee (modeled) | 478,866 | $12.89B | 1,034.6 | $2,161 |
| Wells Fargo | Lender fee (company filings) | 280,717 | $13.78B | about 690 | $2,458 |
| PNC | Lender fee (modeled) | 119,352 | $17.32B | 606.8 | $5,085 |
| Truist | Lender fee (modeled) | 117,956 | $16.21B | 588.5 | $4,989 |
| U.S. Bank | Lender fee (modeled) | 174,822 | $10.81B | 506.9 | $2,900 |
| TD Bank | Lender fee (modeled) | 133,140 | $12.27B | 497.9 | $3,740 |
| Itria Ventures | Lender fee (modeled) | 172,831 | $4.87B | 473.4 | $2,739 |
Lender fees are modeled from the SBA file, except Wells Fargo's, which is the sum of its two filed fee figures (about $420 million for 2020 and about $270 million for 2021); all are gross of each lender's costs; Blueacorn's figure is from company financials quoted in a House report. JPMorgan's row leaves out 14,327 loans, $90.4 million in modeled fees, that the SBA file lists under JPMorgan's name at a San Francisco location; they match the book of First Republic Bank, which JPMorgan took over in 2023. Womply's figure is what it billed its lenders for 2021, not what it collected; the Womply piece works through that side of the same fee pool. Customers Bank, ranked on its own published figure of "close to $350 million," is 17th, and Capital Plus, ranked on its parent's audited accounts ($305.7 million), 23rd.
Bank of America made the most loans and earned less per loan than JPMorgan, PNC, Truist or TD, because three in four of its loans were small. Its fees came to 4.3 percent of the dollars it lent.
V. The courts and the overseers
Profiles, Inc., a Baltimore public relations firm, sued on April 3, 2020, the day the portal opened, on behalf of a proposed class of businesses "prevented from even applying for a PPP loan by BOA solely because they do not have a pre-existing debt relationship with BOA" (class action complaint, para. 42). One plaintiff, a 25-year deposit customer, said a branch manager told it to "go someplace else" (memorandum opinion, pp. 2–3). Judge Stephanie Gallagher denied a temporary restraining order on April 13, holding that "Plaintiffs fail to demonstrate that the CARES Act provides a private right of action" (p. 7). She denied an injunction pending appeal on April 17 (memorandum opinion), and the Fourth Circuit's denial of the same request was entered on the docket on May 1 (No. 20-1438). The docket closed on July 9, 2020 (Docket sheet, Profiles, Inc. v. Bank of America Corp., No. 1:20-cv-00894-SAG (D. Md.); case documents).
Two small businesses, Informatech Consulting and Studio 1220, sued in San Francisco. They alleged that their applications were not processed until the first round's money was gone because the bank put bigger businesses first, in violation of the "first come, first served" principle. No court reached the merits. On January 25, 2021, Judge Vince Chhabria sent the claims against Bank of America, N.A. to arbitration under the clause in the plaintiffs' deposit agreements (Order, Informatech Consulting v. Bank of America Corp., No. 3:20-cv-02892-VC (N.D. Cal.), Doc. 72). He dismissed Bank of America Corporation and Intralinks, "the technology company that provided the software for Bank of America NA to process incoming PPP loan applications," with leave to amend. The claim against Intralinks was dismissed with prejudice on May 25, 2021 (Doc. 90). A third suit, filed in Los Angeles by the Law Office of Sabrina Damast and others (No. 2:20-cv-03591 (C.D. Cal.)), was voluntarily dismissed on June 25, 2020. The Judicial Panel on Multidistrict Litigation refused to combine the Bank of America cases, finding that "individualized factual issues concerning the circumstances of each loan application will significantly diminish the potential efficiencies from centralization" (Order Denying Transfer, In re: Bank of America Paycheck Protection Program Litigation, MDL No. 2952 (J.P.M.L. Aug. 5, 2020)). JPMorgan's borrower-priority cases went to arbitration too, as The Banks Served Their Own Customers First, and Courts Shrugged describes.
Agents who had helped borrowers apply sued lenders across the country for a share of the fees. Bank of America was among the defendants and opposed centralizing those cases; the Panel refused (order denying transfer, MDL No. 2950). In one Bank of America case, Judge Jon Tigar held that "the CARES Act and the SBA Rule do not require lenders to pay agent fees for assistance with PPP loan applications, except as required under a written compensation agreement," joining "every court that has decided this issue" (Order Granting Motion to Dismiss, Lopez v. Bank of America, N.A., No. 4:20-cv-04172-JST (N.D. Cal. Dec. 4, 2020), Doc. 43, p. 15). The case was dismissed with prejudice by stipulation on January 21, 2021. The Agents Got Nothing follows the rest of those cases.
On June 15, 2020, the House Select Subcommittee on the Coronavirus Crisis wrote to Brian Moynihan for the bank's PPP records. Its fifth written question was "What is your bank's revenue and profit from operating PPP to date?" (Select Subcommittee letter to Brian Moynihan, June 15, 2020). The bank answered through counsel in letters of June 29 and September 4, 2020, which the staff report cites; we found no public copy. The October 2020 staff report found that seven of the eight institutions it examined had limited PPP lending to existing customers, citing Bank of America's letter among others. It found that Bank of America "pointed to Regulation B as a reason for not collecting demographic information from PPP applicants" (staff report, pp. 6 and 10). It also found that Bank of America, unlike JPMorgan and PNC, processed applications "without substantial timing discrepancies across the business lines" (p. 14). The report gives no figure for any bank's PPP revenue. The Subcommittee's findings carry no penalty.
The pandemic program that brought Bank of America penalties was unemployment benefits. The bank issued the prepaid debit cards through which California and other states paid jobless benefits. On July 14, 2022, it agreed to pay a $125 million civil money penalty to the Office of the Comptroller of the Currency over its administration of those cards and its complaint handling (OCC order). It also agreed to pay a $100 million penalty to the Consumer Financial Protection Bureau, whose order describes card accounts frozen or blocked after the bank rejected cardholders' error claims (CFPB consent order). The Filter That Froze California tells that part. We found no regulatory action over the bank's PPP lending.
VI. What the bank said about the money
On May 4, 2020, before the SBA had paid it anything, the bank put the pledge in a press release: "While no fees related to the PPP have been received from the SBA, the company announced that net proceeds related to PPP fees will be dedicated to support small businesses and the communities and nonprofits we serve" (Bank of America press release, May 4, 2020).
"Net proceeds" means the fees less whatever the bank counted as the cost of earning them. The bank chose both numbers and has published neither.
A year later Moynihan gave Congress the same promise and a timetable: "We expect to receive fees from our participation in the PPP consistent with the rules and formulas set forth in applicable laws, and will have a final assessment of total fees received once all loans have been processed. In 2020, we announced that any net proceeds related to PPP fees will be dedicated to support small businesses and the communities and nonprofits we serve" (Moynihan testimony, May 26, 2021, p. 5).
The final assessment has not appeared in any filing we searched. The bank's annual reports for 2020 and 2021 and its quarterly reports from 2020 through mid-2021 describe the loans, the balances, the forgiveness and the accounting, and give no fee total and no account of the pledge. Its 2021 proxy statement counts the loans (about 343,000), the teammates (24,000) and the percentages that went to small and low-income borrowers, and gives no fee figure. The proxy does report other PPP-related support: more than $250 million in capital to community development lenders and minority depository institutions "to facilitate lending through the PPP," and $10 million in grants (2021 proxy statement). The May 4, 2020 release listed that commitment separately from the fee pledge, and no filing we found ties the two.
Wells Fargo promised its gross fees and reported the total. Its 2021 proxy statement says it "voluntarily committed to donate all of the gross processing fees from funding Paycheck Protection Program loans made in 2020," an "approximately $420 million commitment" (Wells Fargo & Company, 2021 proxy statement). In January 2022 it reported: "Fulfilled our ~$420 million commitment" (Wells Fargo, 4Q21 financial results presentation). The model puts Wells Fargo's 2020 fees at $420.7 million. It puts Bank of America's at $946.5 million.
In September 2022 Moynihan filed a new written statement with the House Financial Services Committee. Its PPP section repeats the loan count and the $35 billion, and adds that the bank had helped "nearly 464,000 clients receive loan forgiveness." The paragraph about fees is gone (Written statement of Brian Moynihan before the House Committee on Financial Services, September 21, 2022, pp. 15–16).
Method and sources
Modeled figures. Every Bank of America loan in the SBA's PPP loan-level release of September 30, 2024, with Bank of America, N.A. as originating lender (491,034 loans; loans with an undisbursed amount equal to or above the approved amount excluded), priced on its current approved amount under 85 FR 20811 (2020 loans: 5/3/1 percent), 86 FR 3692 (2021 first-draw loans: the lesser of 50 percent or $2,500 up to $50,000, then 5/3/1 percent) and 86 FR 3712 (second-draw loans: the lesser of 50 percent or $2,500 up to $50,000, then 5 and 3 percent). Rounds follow the SBA file: second-draw loans by processing method, 2021 first-draw loans by approval date. The first-round window is loans dated April 3 through April 16, 2020. Figures are accrued fees, gross of the bank's costs.
Reported figures. Loan counts, balances, the accounting treatment, the pledge and the testimony are the bank's own words in the documents cited. Wells Fargo's figures are Wells Fargo's.
What would settle the rest. The bank's answer to the Subcommittee's fifth question, or the "final assessment of total fees received" its chief executive described in May 2021.
Sources: SBA PPP loan-level data, 2024-09-30 release; 85 FR 20811, 86 FR 3692 and 86 FR 3712; Bank of America press release, May 4, 2020; Bank of America 2Q20 financial results presentation (July 16, 2020); Bank of America Form 10-Q for the quarter ended September 30, 2020; Bank of America Form 10-K for 2020 and for 2021; Bank of America 2021 proxy statement; Bank of America Q3 2020 earnings call, October 14, 2020; Brian Moynihan, written testimony to the Senate Banking Committee, May 26, 2021; Written statement of Brian Moynihan before the House Committee on Financial Services, September 21, 2022; Select Subcommittee on the Coronavirus Crisis, letter to Brian Moynihan, June 15, 2020, and staff report "Underserved and Unprotected" (October 2020); Profiles, Inc. v. Bank of America Corp., No. 1:20-cv-00894-SAG (D. Md.) (memorandum opinion, April 13, 2020; memorandum opinion, April 17, 2020; docket sheet); Informatech Consulting v. Bank of America Corp. / Studio 1220 v. Intralinks, No. 3:20-cv-02892-VC (N.D. Cal.), Docs. 72 and 90; Order Denying Transfer, MDL No. 2952 (J.P.M.L. Aug. 5, 2020); Order Denying Transfer, MDL No. 2950 (J.P.M.L. Aug. 5, 2020); Lopez v. Bank of America, N.A., No. 4:20-cv-04172-JST (N.D. Cal.), Doc. 43; OCC order AA-ENF-2022-22; CFPB consent order 2022-CFPB-0004; Wells Fargo & Company 2021 proxy statement and 4Q21 financial results presentation.