Judge Denies Injunction Against Bank Of America In Lawsuit Over Coronavirus Small Business Stimulus Program
BALTIMORE (WJZ) -- A federal judge has denied a temporary restraining order and preliminary injunction against Bank of America in a class-action lawsuit accusing the bank of prioritizing its existing customers when doling out billions of federal dollars as part of a coronavirus stimulus package.
A court heard arguments in the case last week. Several small businesses based in Baltimore sued Bank of America, claiming the bank's plan to give existing customers priority when assigning funds through the Paycheck Protection Program was unfair.
The program includes nearly $350 billion in funding in the form of government-backed loans for small businesses to cover payroll and other expenses amid the pandemic.
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Bank of America, meanwhile, had argued it was prioritizing existing customers so it could get the money into the hands of business owners faster.
In a 23-page opinion filed Monday, U.S. District Judge Stephanie Gallagher said Congress is better positioned to make changes to the law than the court:
"The Court will not wade into the merits of this debate. Certainly, Plaintiffs' experiences demonstrate a significant flaw, from their perspective and that of many other small businesses, in the implementation of the massive and complex PPP program. However, given the competing policy interests, the need to balance the desire to assist the widest swath of small businesses with the need to incentivize lender participation, and the overall fluidity of this epidemic, Congress is better positioned to remedy any defects in the CARES Act, and to pass the supplemental legislation it believes best aimed at ameliorating the effects of the COVID-19 crisis."
Gallagher also wrote that Bank of America's argument for prioritizing existing customers was "compelling."
Lawmakers on both sides of the aisle, including Sens. Ben Cardin (D-Maryland) and Marco Rubio (R-Florida) have criticized Bank of America for its handling of the program.
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