Email from Rapid Financial Services counsel to Select Subcommittee staff, June 23, 2021

Summary

An email from Rapid Financial Services counsel to Select Subcommittee staff, June 23, 2021, answering questions about EIDL applications. The answers state that IP address indicators under the "fraud alerts" icon reflect high risk behavior, international higher risk location or proxy usage and are not by themselves an indicator of fraud. They also state that when a loan officer or Team Lead declines a loan for a fraud reason, that information propagates to related applications, including those related by IP address. The answers refer to a March 3, 2020 system demonstration given by Rapid Finance and Rocket Loans. The signature block names Thomas E. Zeno.

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“Email from Rapid Financial Services counsel to Select Subcommittee staff, June 23, 2021.” Original at coronavirus.house.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/email-from-rapid-financial-services-counsel-to-select-subcommittee-sta-eb5d67b5e1/, SHA-256 8cdc3b7c0c6249b9caaa278a9ca273f0ac236dfac85f6a11a96bf7a75ab552a9.

Full text

Total to date (6/11/21): 2,731,326;
Total through 4/30/20: 164,803.

2. How many total EIDL applications that were recommended for manual review by a loan officer or
reviewer were ultimately approved?

Total to date (6/11/21): 2,171,517 out of 4,723.833 applications (see response (ii) above);
Total through 4/30/20: 28,677 out of 41,733 applications (see response (ii) above).

3. How many EIDL applications were flagged with a fraud alert as originating from an IP address
associated with potential fraud (See Rapid‐CSC000308)? How many such applications were flagged
through April 30, 2020?

While some IP address indicators appear under the “fraud alerts” icon, the indicators indicate simply high risk
behavior, international higher risk location or proxy usage. They are an alert to the loan officer and Team Lead
to review these factors carefully but are not by themselves an indicator of fraud. These alerts are determined
in real time by the system when an application is accessed by a user, so the indicators may appear prior to or
after approval. Because the data changes over time when users interact with the application in the system,
we do not have historical data to confirm percent of deals with IP address indicators prior to approval.

Second, we received records reflecting Rapid Decision’s apparently regular system “Enhancements” that span
the course of the EIDL program. See Rapid‐CSC0000201‐307. We have a specific question, however, related to
whether Rapid made continuous improvements or updates to its system to improve the detection of EIDL
applications from IP addresses associated with potential fraud. Please respond to the below:

4. Did Rapid use any process to continuously update the IP addresses that would be flagged as associated
with fraud? If so, please describe that process. Specifically explain whether indications that numerous
applications originated from a specific IP address or other indications that EIDL applications from a
specific IP address were fraudulent would result in the Rapid system flagging future applications from
such an IP address with a fraud alert.

If a loan officer or Team Lead declines a loan for a fraud reason, that information will propagate to other
related applications, including when applications are related by IP address. This is visible in the loan officer
view of the system in the related applications table for all applications sharing that IP address as soon as the
first application is marked as fraudulent by a loan officer. This feature continually updates if additional
applications are marked as fraudulent by a loan officer or Team Lead. This functionality was described and
shown to the subcommittee during the March 3, 2020 system demonstration given by Rapid Finance and
Rocket Loans.
We were not requested to build functionality to identify all applications sharing an IP address as being
potentially fraudulent. There are various scenarios where multiple eligible (and ineligible) applications can be
submitted from the same IP address. However, the related applications functionality described earlier in this
answer indicates when the IP address of an application shares the same IP address with any other application
and lists all such applications as related by IP address. Therefore, if the SBA loan officer or Team Lead
determines an application is fraudulent, the system will identify all applications potentially related to that loan
based on a shared IP address.

Thomas E. Zeno
1201 Pennsylvania Ave NW | Suite 900 | Washington, DC 20004

2
bio | vCard |

For COVID‐19 information and resources, please visit our Coronavirus Task Force page.

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