Letter dated March 15, 2022 by Prestamos CDFI, LLC — Marshall v. Prestamos CDFI, LLC (Dkt. 31, E.D. Pa. No. 5:21-cv-04337)

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U.S. District Court for the Eastern District of Pennsylvania · No. 5:21-cv-04337-JMG · Doc. 31 · 2022-03-15 · Docket on CourtListener

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Marcel Pratt 
Tel: 215.864.8506 
Fax: 215.864.8999 
prattm@ballardspahr.com 
 
 
 
 
 
March 15, 2022 
 
Via CM/ECF 
The Hon. John M. Gallagher 
United States District Court for 
the Eastern District of Pennsylvania 
Edward N. Cahn Courthouse & Federal 
Building 
504 W. Hamilton Street 
Allentown, PA 18101 
Re: 
Marshall, et al. v. Prestamos CDFI, LLC, No. 5:21-cv-04337-JMG (E.D. Pa.) 
Dear Judge Gallagher: 
We write on behalf of Prestamos CDFI LLC (“Prestamos”) in response to Plaintiffs’ March 
14, 2022 letter (“Plaintiffs’ Second Letter,” Doc. 30). While Prestamos filed a 
comprehensive letter (Doc. 27) on February 25 in response to Plaintiffs’ February 14 letter 
(“Plaintiffs’ First Letter,” Doc. 22), Plaintiffs’ Second Letter now attempts to inject third-
party discovery into this party dispute and lodges an inflammatory allegation that Prestamos 
cannot allow to go unchecked. 
As an initial matter, Prestamos reiterates its position from its February 25 letter: Discovery 
in a putative nationwide class action involving requests for, according to Plaintiffs’ own 
words, “perhaps millions of pages of documents” should be stayed pending resolution of 
Prestamos’s Motion to Dismiss the Amended Complaint (Doc. 24). Requiring Prestamos to 
submit to such sprawling discovery would be grossly unfair, particularly when this lawsuit 
could be dismissed for lack of subject matter jurisdiction or dismissed in whole or in part for 
failure to state a claim. Notably, Plaintiffs’ First and Second Letters fail to cite a single case 
that supports proceeding with discovery under these circumstances or that counters the case 
law cited by Prestamos.  
Plaintiffs’ Second Letter asserts that non-party Chicanos Por La Causa, Inc. (“CPLC”), the 
parent of Prestamos, is engaging in “stonewalling.” In reality, Plaintiffs served expansive 
and intrusive document and deposition subpoenas on CPLC two days after filing Plaintiffs’ 
First Letter regarding Prestamos’s discovery objections. The information requested in the 
Case 5:21-cv-04337-JMG     Document 31     Filed 03/15/22     Page 1 of 2

The Hon. John M. Gallagher 
March 15, 2022 
Page 2 
 
 
 
 
 
subpoenas to CPLC duplicated many of the requests that Plaintiffs had already served on 
Prestamos, and were obviously an attempted end-run around party discovery. In any event, 
Plaintiffs’ ploy is improper: Plaintiffs should conduct party discovery and resolve objections 
through that process before engaging in non-party discovery. 
Lastly, Plaintiffs’ Second Letter feigns urgency in their requests for a telephone conference 
by falsely alleging that this case involves “potential theft” (emphasis in original) of so-called 
“unfunded PPP proceeds.” Either Plaintiffs lack a fundamental understanding of how PPP 
works or they have elected to use misleading language in order to provoke the Court. It is 
indisputable that Prestamos never received individual borrowers’ “PPP proceeds” from the 
U.S. Small Business Administration (“SBA”). In order to issue a PPP loan, Prestamos lent 
its own money that it borrowed, with interest, from the Federal Reserve Bank through the 
PPP Liquidity Facility (“PPPLF”). See Def’s. Mem. Supp. Mot. Dismiss, at 8, 13, Doc. No. 
24-1. SBA guaranteed the issued PPP loans, but only remitted payment to Prestamos upon a 
successful application from a borrower that was entitled to forgiveness of an already funded 
loan. See Interim Final Rule, 86. Fed. Reg. 8283, 8288 (Feb. 5, 2021) (describing process). 
In other words, any “funded” loan without an approved forgiveness application and any 
“unfunded loan” is ineligible for a SBA payment to Prestamos. Thus, holding onto 
undisbursed PPPLF funds, which are the credit extended to Prestamos, does not benefit 
Prestamos because it would be obligated to pay interest for holding onto those credited funds 
on top of repaying the principal to the Federal Reserve. Plaintiffs’ accusation of “potential 
theft” contradicts not only how PPP works, but also commonsense and basic economics. 
Prestamos prays that this explanation puts to rest this baseless and inflammatory allegation.1 
Accordingly, the Court should stay discovery as to the potentially thousands of putative class 
members at least until determining which, if any, claims may proceed past the pleadings 
stage.  
Respectfully submitted, 
 
/s/ Marcel Pratt 
 
Marcel Pratt 
MP 
                                                 
1  
Plaintiffs’ misconceived attempt to step into the shoes of the SBA and monitor 
Prestamos’s use of its credit is further evidence that this case is merely a guise to 
enforce the CARES Act, which affords no private right of action. 
Case 5:21-cv-04337-JMG     Document 31     Filed 03/15/22     Page 2 of 2

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