Financial institutions are not required to share the agent fee they receive from Paycheck Protection Program loans with accounting firms and others who help borrowers apply for the assistance, a federal judge ruled this week.
Judge T. Kent Wetherell II of the U.S. District Court for the Northern District of Florida said that unless there is a specific agreement between a company and a lender, federal law does not require the lender to share the fee it receives with the firms.
The ruling was made in the case, Sport & Wheat, CPA v. ServisFirst Bank, Inc., in which a small accounting firm that helped clients fill out the applications for PPP loans, Sport & Wheat, sued ServisFirst Bank, contending that it was entitled to part of the fee the bank received.
In dismissing the suit, Wetherell noted that this case is one of more than 50 similar suits that have been filed across the country.
“I know there are credit unions out there that have to decide whether or not to pay agent fees,” Henry Meier, vice president and general counsel for the New York Credit Union Association, wrote in his blog, “New York’s State of Mind.” “This represents the first round in what may become contentious and drawn out litigation.”
“The outcome would have been different had the accounting firm signed an agreement directly with the bank, but it did not do so,” added Meier, who stressed that his comments do not necessarily reflect the views of his association.