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JPMorgan Chase Bank, N.A.

Lender or loan platform

PPP
Type
Company or group
Role
Lender or loan platform
Programs
PPP
Updated

The profile

The PPP's biggest lender by dollars: $41.6 billion in 438,565 loans of its own. In May 2020 it said it did "not intend to earn a profit from PPP." Its filings never gave the fees, the costs or the profit.

  • Type: National bank; PPP lender
  • Parent: JPMorgan Chase & Co.

In the archive

JPMorgan Chase lent more PPP money than any other lender. The SBA's loan file lists it as originating lender on 452,892 loans for $44.1 billion. Of those, 14,327, for $2.56 billion, sit under a single San Francisco lender location; 10,474 of their borrowers are in California.1 JPMorgan bought most of the assets of First Republic Bank from the FDIC on May 1, 2023, and the loan file does not say whose loans these were.2 Without them, JPMorgan's book is 438,565 loans for $41.6 billion. Priced loan by loan under the SBA's fee schedule, those loans carry about $1.70 billion in processing fees, the most of any lender.13 The arithmetic, and the bank's silence on it, is in How Much Did JPMorgan Chase Make From Pandemic Relief?

PPP lending

The first round opened on April 3, 2020 and ran out of money on April 16. In those two weeks the SBA approved 25,993 JPMorgan loans for $12.0 billion, an average of about $462,000, against about $197,000 for all lenders in the same window.1 On April 22 the New York Times reported that nearly all of the 8,500 commercial and private banking clients who applied got a loan, while "only 18,000 of more than 300,000 small-business banking customers who applied through Chase's retail bank" did, according to the bank.4

A House Select Subcommittee staff report, built on the bank's own data through July 31, 2020, found that JPMorgan's Wholesale Banking clients "received PPP funding in only 3.1 days on average, whereas Business Banking clients waited 14.9 days."5 The Subcommittee's findings carry no penalty.

The SBA paid the lender 5 percent on 2020 loans up to $350,000, 3 percent up to $2 million and 1 percent above.3 JPMorgan deferred the fees "and accreted [them] into interest income over the contractual life of the loans."6 By December 31, 2021, "approximately $34 billion of PPP loans have been repaid through payments of forgiveness amounts to the Firm from the SBA."7

What the bank said

On May 1, 2020 JPMorgan announced it expected to fund about $29 billion to more than 239,000 businesses, and added: "Finally, the firm does not intend to earn a profit from PPP."8 On the July 14, 2020 earnings call chief financial officer Jennifer Piepszak said: "So you'll have some revenue and then you'll have expenses, and the profit will be near zero."9 Jamie Dimon's letter to shareholders for 2020 credits "the efforts of more than 1,000 people who manually reviewed applications and contacted clients after hours and on weekends." It does not mention the fees.10 No filing we read reports them.

Sued over the line and the fees

Borrowers filed at least seven federal suits alleging that JPMorgan did not process PPP applications on a "first-come, first-served" basis. One, from Sha-Poppin Gourmet Popcorn, alleged the bank acted "out of a combination of elite favoritism and, to be sure, at least some additional profit"; those are allegations.11 On August 5, 2020 the Judicial Panel on Multidistrict Litigation refused to combine the cases.12 They were sent to arbitration or dismissed: Hyde-Edwards Salon & Spa to arbitration in November 2020, Sha-Poppin to arbitration under the deposit account agreement in August 2021.1314 No court decided whether the bank followed the rule. The Banks Served Their Own Customers First, and Courts Shrugged follows those cases.

Accountants who had helped borrowers apply sued for a share of the fee. A New York court dismissed their claims in Johnson v. JPMorgan Chase Bank, N.A. (S.D.N.Y. No. 20-cv-4100).1516 In California, JPMorgan was one of seven lender defendants in American Video Duplicating v. Citigroup, where the court wrote that it "appears every court that has decided this issue has held that the CARES Act does not require lenders to pay agent fees absent an agreement to do so."17 The Agents Got Nothing has the rest.

The Blue Flame wire

JPMorgan was California's bank. On March 26, 2020 it sent the state's $456,888,600 deposit to Blue Flame Medical, a mask broker three days old, at Chain Bridge Bank. A JPMorgan executive told Chain Bridge the "amount seems to be quite high for the supplies that they're purportedly paying for," and at 2:05 p.m. JPMorgan formally asked for the money back.18 In the litigation that followed, the district court and the Fourth Circuit held JPMorgan liable to indemnify Chain Bridge for its "loss and expenses resulting from the cancellation of the payment order."18 Chain Bridge had claimed $5,935,978.52 in fees and expenses; it withdrew that motion in February 2022 "pursuant to a negotiated settlement" with JPMorgan whose amount the filing does not state.1920

Sources

Notes

  1. SBA PPP FOIA loan-level data, release of Sept. 30, 2024, loans with JPMorgan Chase Bank, National Association as originating lender (San Francisco lender location 474333 counted separately); fees priced under 85 FR 20811, 86 FR 3692 and 86 FR 3712. See the lender page. Original: SBA PPP FOIA loan-level data (original: data.sba.gov · stored capture) ↩
  2. JPMorgan Chase, "JPMorgan Chase acquires substantial majority of assets and assumes certain liabilities of First Republic Bank" (Form 8-K, Exhibit 99, May 1, 2023). Original: https://www.sec.gov/Archives/edgar/data/19617/000001961723000304/jpmc2023exhibit99.htm ↩
  3. SBA interim final rule, Paycheck Protection Program, 85 FR 20811 (Apr. 15, 2020). ↩
  4. Emily Flitter and Stacy Cowley, "Banks Gave Richest Clients 'Concierge Treatment' for Pandemic Aid," New York Times (Apr. 22, 2020). ↩
  5. House Select Subcommittee on the Coronavirus Crisis, staff report, "Underserved and Unprotected" (Oct. 2020), pp. 13–15. ↩
  6. JPMorgan Chase Form 10-Q for the quarter ended June 30, 2020. Original: https://www.sec.gov/Archives/edgar/data/19617/000001961720000372/corpq22020.htm ↩
  7. JPMorgan Chase Form 10-K for 2021. Original: https://www.sec.gov/Archives/edgar/data/19617/000001961722000272/jpm-20211231.htm ↩
  8. JPMorgan Chase press release, "Chase approved to fund about $29 billion to 239,000 businesses through PPP" (May 1, 2020). Original: https://www.jpmorganchase.com/newsroom/press-releases/2020/chase-approved-to-fund-29-billion-to-239000-businesses-through-ppp ↩
  9. JPMorgan Chase 2Q20 earnings call transcript (July 14, 2020). Original: https://www.jpmorganchase.com/content/dam/jpmc/jpmorgan-chase-and-co/investor-relations/documents/quarterly-earnings/2020/2nd-quarter/2q20-earnings-transcript.pdf ↩
  10. Jamie Dimon, letter to shareholders, JPMorgan Chase Annual Report 2020. Original: https://reports.jpmorganchase.com/investor-relations/2020/ar-ceo-letters.htm ↩
  11. Class action complaint, Sha-Poppin Gourmet Popcorn LLC v. JPMorgan Chase Bank, N.A. (N.D. Ill. Apr. 24, 2020), para. 10. Original: https://storage.courtlistener.com/recap/gov.uscourts.ilnd.375541/gov.uscourts.ilnd.375541.1.0_2.pdf ↩
  12. Order denying transfer, In re: JPMorgan Chase Paycheck Protection Program Litigation, MDL No. 2944 (J.P.M.L. Aug. 5, 2020). Original: https://storage.courtlistener.com/recap/gov.uscourts.jpml.1159759/gov.uscourts.jpml.1159759.105.0.pdf ↩
  13. Order granting motion to compel arbitration, Hyde-Edwards Salon & Spa v. JPMorgan Chase & Co., No. 3:20-cv-00762 (S.D. Cal. Nov. 23, 2020), Doc. 22. Original: https://storage.courtlistener.com/recap/gov.uscourts.casd.674354/gov.uscourts.casd.674354.22.0.pdf ↩
  14. Memorandum opinion and order, Sha-Poppin Gourmet Popcorn LLC and Ajira AI LLC v. JPMorgan Chase Bank, N.A. (N.D. Ill. Aug. 10, 2021). Original: https://storage.courtlistener.com/recap/gov.uscourts.ilnd.378273/gov.uscourts.ilnd.378273.25.0.pdf ↩
  15. Opinion and order, Johnson v. JPMorgan Chase Bank, N.A., No. 1:20-cv-04100 (S.D.N.Y.), Dkt. 69. Original: https://storage.courtlistener.com/recap/gov.uscourts.nysd.537781/gov.uscourts.nysd.537781.69.0.pdf ↩
  16. 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 (citing Johnson). Original: https://storage.courtlistener.com/recap/gov.uscourts.cand.361409/gov.uscourts.cand.361409.43.0.pdf ↩
  17. Order granting defendants' motions to dismiss, American Video Duplicating Inc. v. Citigroup Inc., No. 2:20-cv-03815-ODW (C.D. Cal. Nov. 16, 2020), Doc. 131. Original: https://storage.courtlistener.com/recap/gov.uscourts.cacd.780998/gov.uscourts.cacd.780998.131.0.pdf ↩
  18. Opinion, Blue Flame Medical LLC v. Chain Bridge Bank, N.A., Nos. 21-2218, 21-2219 (4th Cir. Mar. 20, 2023) (unpublished). Original: https://www.ca4.uscourts.gov/opinions/212218.U.pdf ↩
  19. Chain Bridge Bank, N.A.'s motion to establish the amount of indemnified fees and expenses (E.D. Va. Oct. 28, 2021), Doc. 194. Original: https://ecf.vaed.uscourts.gov/doc1/189111608778 ↩
  20. Chain Bridge Bank, N.A.'s notice withdrawing its fee motion (E.D. Va. Feb. 8, 2022), Doc. 221. Original: https://ecf.vaed.uscourts.gov/doc1/189111808578 ↩
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